How to Get North Dakota Sales Tax Permit | A Comprehensive Guide

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North Dakota Sales Tax Permit

Have you ever wondered what a sales tax permit is in North Dakota? If you don’t, then we will guide you through it. In North Dakota, a sales tax permit, also known as a seller’s permit, is a legal document that allows businesses, specifically North Dakota LLC, to collect and remit sales tax to the North Dakota government. This permit ensures businesses operate legally and have the necessary permissions to conduct sales within a particular state. North Dakota has its own rules and regulations surrounding sales tax permits. Business owners must familiarize themselves with the requirements and processes to comply with the law.

In this comprehensive guide, Webinarcare Editorial Team will walk you through everything you need to know about obtaining and maintaining North Dakota Sales Tax Permit. From understanding the basics of sales tax to the intricacies of the application process, we have got you covered. You must be guided by all the factors gathered in this article.

How to Get Sales Tax Permit in North Dakota

What is a Sales Tax Permit?

A sales tax permit is North Dakota-issued license that allows businesses to collect and remit sales tax on the goods and services they sell. This permit ensures North Dakota businesses operate legally and have the necessary permissions to conduct sales within a particular state. In North Dakota, a sales tax permit is required for businesses that sell taxable goods or services and are required to collect sales tax from their customers.

Who Needs a Sales Tax Permit?

Not all businesses need a sales tax permit. Typically, businesses that sell tangible personal property or taxable services to customers within North Dakota require a sales tax permit. This includes brick-and-mortar stores, online retailers, and service providers. North Dakota may also require sales tax permits for businesses that sell certain types of products or services, such as alcohol or tobacco. If you plan to start a bakery business in North Dakota, you typically need a sales tax permit to collect and remit sales tax on the items you sell.

If your business operates in multiple states or forms a foreign LLC in North Dakota, you may need to obtain a sales tax permit for each state with a sales tax nexus. A sales tax nexus is a connection or presence a business has within a state that requires them to collect and remit sales tax. Factors that can create a nexus include the following:

  • Physical location
  • Employees
  • Inventory within a state

Obtaining a sales tax permit in North Dakota is not just about complying with regulations, but about seizing the opportunity to grow and thrive in the market. To start an LLC must be a gateway to establish a legitimate business presence and to build trust with customers. Embrace this essential step, for it paves the path towards success and prosperity.

– WEBINARCARE EDITORIAL TEAM

How to Get a Sales Tax Permit in North Dakota

The process for obtaining a sales tax permit varies from state to state. Generally, North Dakota businesses must apply through the North Dakota Office of State Tax Commissioner. The following steps provide an overview of the application process:

Step 1: Determine If You Need a Sales Tax Permit 

Before applying, determine if your North Dakota business needs a sales tax permit based on the goods or services you sell and where you operate.

Most North Dakota businesses that sell tangible goods or services must have a sales tax permit. This includes:

  • Retailers – businesses that sell goods directly to consumers, such as clothing stores, grocery stores, and electronics stores.
  • Service Providers – businesses that provide services, such as hair salons, auto repair shops, and landscaping companies.
  • Wholesalers – businesses that sell goods to other businesses, such as distributors and manufacturers.
  • Online Sellers – businesses that sell goods or services online, including North Dakota E-commerce and online marketplaces.

Step 2: Register Your North Dakota Business

Register your business in North Dakota if you still need to. This may involve obtaining an Employer Identification Number (EIN) in North Dakota from the Internal Revenue Service and registering your business name with the North Dakota Secretary of State. 

Your North Dakota business name should be unique, memorable, and reflective of your products or services. There is a complete guide on North Dakota Business Name Search for a proper North Dakota business name. You can also check the availability of your desired business name by searching the North Dakota Secretary of State Business Records Search‘s website.

In obtaining an EIN, it can be done through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Complete the registration for a legal North Dakota business if you plan to sell tangible goods. 

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom – ($0 + State Fee for LLC formation)

Step 3: Gather The Necessary Information

The next step is to collect the required information for the North Dakota sales tax permit application. To obtain a sales tax permit in North Dakota, you will need to gather the following necessary information:

  1. Business Details: Provide the legal name, mailing address, and contact information of your business, including your North Dakota DBA (Doing Business As) names.
  2. Entity Type: Indicate whether your business is a sole proprietorship, partnership, corporation, LLC, or legal entity.
  3. EIN/SSN: Have your Employer Identification Number (EIN) or Social Security Number (SSN) ready. This identification is required to associate the sales tax permit with your business.
  4. Purpose of Permit: Explain the nature of your business activities, such as retail sales, wholesale, manufacturing, or service, to determine the appropriate sales tax category.
  5. Product/Service Description: Provide a brief description of the goods or services your business offers, including any unique details that may impact the sales tax requirements.
  6. Nexus Information: Identify if your business has a physical presence or nexus in North Dakota, such as a brick-and-mortar location, employees, or inventory storage.
  7. Estimated Sales: Estimate your expected monthly or annual sales volume in North Dakota to determine the appropriate tax registration and reporting requirements.
  8. Previous Registration: If you are already registered for sales tax in another state, provide details to determine if any reciprocal agreements or exemptions apply.
  9. Supporting Documents: Some states may require additional documentation, such as a copy of your business license, federal tax returns, or a certificate of authority.
  10. Fee Payment: Be prepared to pay the required fee for obtaining a sales tax permit in North Dakota.

It’s important to note the exact requirements and processes in North Dakota. It is recommended to visit the official website of the North Dakota Office of State Tax Commissioner or consult with a tax professional for accurate and up-to-date information.

Step 4: Complete The Application

Fill out the sales tax permit application form for North Dakota, either online or by paper. Be prepared to answer questions about your business operations, products, and services. You can register your North Dakota sales tax permit in Taxpayer Access Point.

Step 5: Pay Any Required Fees

In North Dakota, the state permit may charge a fee for obtaining a sales tax permit. Be prepared to pay this fee when submitting your application. Usually, it costs $0 (Free). 

Step 6: Submit The Application

Submit your completed application, along with the required fee of $0 (Free), to the North Dakota Office of State Tax Commissioner.

Step 7: Receive Your Permit

Once your application is approved, you will receive your sales tax permit. This may be a physical document or an electronic certificate you can print. 

How to Maintain a Sales Tax Permit

After obtaining a sales tax permit, North Dakota businesses must maintain compliance with North Dakota sales tax laws. This typically involves the following steps:

  • Collect Sales Tax: Collect sales tax from customers on taxable goods and services. Be sure to charge the correct sales tax rate based on your and your customer’s locations. The sales tax rate in North Dakota is 5.00%. 
  • Keep Accurate Records: Maintained detailed records of all sales transactions, including the amount of sales tax collected. This information will be required when filing your sales tax returns. Hire a certified public accountant (CPA) to keep track of records. 
  • File Sales Tax Returns: File sales tax returns with North Dakota, typically monthly, quarterly, or annually, depending on your sales volume and North Dakota requirements. Be sure to remit the sales tax collected during the reporting period.
  • Renew your Permit: North Dakota requires businesses to renew their sales tax permits periodically. Know your state’s renewal requirements and complete the necessary steps to maintain your permit.

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Penalties for Non-Compliance

Failure to obtain or maintain a sales tax permit can seriously affect a business. Penalties for non-compliance can include fines, penalties, interest charges, and even the revocation of your business license. Additionally, North Dakota businesses that fail to collect and remit the North Dakota sales tax may be held personally liable for the unpaid taxes.

Do I Need a Sales Tax Permit If I Only Sell Online?

You likely need a sales tax permit if you sell taxable goods or services online and have a sales tax nexus in North Dakota. To have a Home-Based Business in North Dakota, you must still file and maintain a sales tax permit. 

How Long Does Obtaining a Sales Tax Permit Take?

The processing time for sales tax permit applications takes time. In North Dakota, they may issue permits within a few days, while others may take several weeks. Be sure to apply well in advance of when you plan to start selling taxable goods or services.

Can I Have Multiple Sales Tax Permits?

Businesses that operate in multiple states or sell different types of products may need multiple sales tax permits. Be sure to research the specific requirements for each state and product type. Having a foreign LLC is not quite easy since you still need to hire a Registered Agent, file for the Articles of Organization of the state you wish to operate your business, and also, you need to have multiple sales tax permits. 

How Much Does a Sales Tax Permit Cost?

The costs and requirements for obtaining a sales tax permit vary depending on the state. To find accurate information about the cost of a sales tax permit in North Dakota, you can visit the North Dakota Office of State Tax Commissioner’s website or consult with a tax professional or accountant familiar with your state’s regulations. They can provide the most up-to-date information on the costs and requirements for obtaining a sales tax permit in North Dakota.

FAQs

What is a sales tax permit?
A sales tax permit is a document that allows a business to charge and collect state sales tax.
Do I need to obtain a sales tax permit in North Dakota?
Yes, if you are making sales in North Dakota, you are required to collect sales tax and have a sales tax permit.
How do I apply for a sales tax permit in North Dakota?
You can apply for a sales tax permit online through the North Dakota Taxpayer Access Point (TAP).
Is there a fee to apply for a sales tax permit in North Dakota?
No, there is no fee to apply for a sales tax permit in North Dakota.
How long does it take to receive a sales tax permit in North Dakota?
North Dakota typically issues sales tax permits within 10 days of receiving the application.
How do I renew my sales tax permit in North Dakota?
You can renew your sales tax permit online through the North Dakota Taxpayer Access Point (TAP).
Will I receive a reminder when it’s time to renew my sales tax permit in North Dakota?
Yes, North Dakota will send you a renewal notice before your permit expires.
Do I need to display my sales tax permit in my business?
Yes, you are required to display your sales tax permit at your place of business.
Can I get a temporary sales tax permit in North Dakota?
Yes, North Dakota issues temporary sales tax permits for off-site events.
How long does a temporary sales tax permit last in North Dakota?
Temporary sales tax permits in North Dakota are valid for up to 60 days.
Can I use my sales tax permit in North Dakota for other states?
No, each state has its own sales tax permit requirements and permits are not transferable between states.
Do I need a sales tax permit for online sales to customers in North Dakota?
Yes, if you are making sales to customers in North Dakota, you are required to collect sales tax and have a sales tax permit.
How do I know what rate of sales tax to charge in North Dakota?
The North Dakota Office of State Tax Commissioner provides a list of sales tax rates by city and county.
Do I need to charge sales tax on shipping and handling in North Dakota?
Yes, shipping and handling charges are subject to sales tax in North Dakota.
Are there any exemptions to charging sales tax in North Dakota?
There are a few exemptions to charging sales tax for certain types of sales, such as sales of farm machinery and seeds.
What happens if I don’t obtain a sales tax permit in North Dakota?
Failure to obtain a sales tax permit in North Dakota may result in penalties or fines.
Can I file my sales tax returns online in North Dakota?
Yes, North Dakota allows businesses to file sales tax returns online through the Taxpayer Access Point (TAP).
How often do I need to file sales tax returns in North Dakota?
Sales tax returns in North Dakota are due on a monthly, quarterly, or annual basis, depending on your business’s sales volume.
Is there a penalty for filing sales tax returns late in North Dakota?
Yes, North Dakota may assess penalties for late filing, late payment, and other violations.
Can I change the frequency of my sales tax filings in North Dakota?
Yes, North Dakota allows businesses to change their sales tax filing frequency by submitting a request to the Office of State Tax Commissioner.
What is a use tax in North Dakota?
Use tax is a tax on goods or services that were purchased tax-free and are used in North Dakota.
Do I need to pay use tax in North Dakota if I bought something in a different state?
Yes, if you bought something tax-free in a different state and used it in North Dakota, you owe use tax on the purchase.
How do I report use tax in North Dakota?
You can report use tax on your North Dakota sales tax return.
Can I use sales tax I paid in another state as a credit on my North Dakota return?
Yes, North Dakota offers a credit for sales or use tax paid to another state on purchases that are also taxed in North Dakota.
Are there any sales tax breaks for small businesses in North Dakota?
In North Dakota, small businesses with gross annual sales of $100,000 or less may be eligible for a reduced sales tax rate.
Is North Dakota’s sales tax rate higher or lower than other states?
North Dakota’s sales tax rate is slightly higher than the national average, but lower than other states in the region.
What if I sell to customers who are exempt from sales tax in North Dakota?
You must ask for and keep documentation of the exemption certificate for each sale to an exempt customer.
Can I be audited for sales tax compliance in North Dakota?
Yes, North Dakota may conduct sales tax audits to ensure compliance with state sales tax rules and regulations.
Are there penalties for failing a North Dakota sales tax audit?
Penalties for failure to comply with sales tax rules in North Dakota may include fines, interest, and even criminal charges.
How do I obtain a sales tax permit in North Dakota?
You can obtain a sales tax permit in North Dakota by registering with the North Dakota Office of State Tax Commissioner.
What is the purpose of a sales tax permit?
A sales tax permit allows you to collect and remit sales tax on taxable sales in North Dakota.
Who needs a sales tax permit in North Dakota?
If you conduct business in North Dakota and make sales that are subject to sales tax, you need a sales tax permit.
How do I know if my business is subject to sales tax in North Dakota?
Businesses engaged in retail sales or providing taxable services in North Dakota are generally subject to sales tax.
Can I apply for a sales tax permit online?
Yes, you can apply for a sales tax permit online through the North Dakota Office of State Tax Commissioner website.
What information do I need to provide when applying for a sales tax permit in North Dakota?
You will need to provide personal information, business information, and other details about your sales operations in North Dakota.
Is there a fee to obtain a sales tax permit in North Dakota?
No, there is no fee to obtain a sales tax permit in North Dakota.
Do I need to renew my sales tax permit in North Dakota?
No, sales tax permits in North Dakota do not need to be renewed.
Can I apply for a sales tax permit in North Dakota if my business is located in another state?
Yes, if your business is making taxable sales in North Dakota, you need to register for a sales tax permit.
Is there a penalty for not having a sales tax permit in North Dakota?
Yes, penalties can be imposed on businesses that operate without a valid sales tax permit in North Dakota.
How do I report sales tax collected in North Dakota?
You can report and pay sales tax collected in North Dakota online using the state’s eServices system.
Are there any exemptions to sales tax in North Dakota?
Certain items are exempt from sales tax in North Dakota, such as groceries and prescription drugs.
Do I need a state tax identification number to apply for a sales tax permit in North Dakota?
No, you do not need a state tax identification number to apply for a sales tax permit in North Dakota.
What is a use tax?
A use tax is a tax on tangible personal property purchased out of state for use in North Dakota.
Do I need to register for a use tax permit in North Dakota?
If you are making purchases for your business out of state and not paying sales tax, you need to register for a use tax permit in North Dakota.
Can I apply for a sales and use tax permit at the same time in North Dakota?
Yes, you can apply for both sales and use tax permits at the same time in North Dakota.
What is the sales tax rate in North Dakota?
The current state sales tax rate in North Dakota is 5%.
Are local sales tax rates added to the state sales tax rate in North Dakota?
Yes, local sales tax rates can be added to the state sales tax rate in North Dakota.
Can I file my sales tax returns and make payment online in North Dakota?
Yes, you can file your sales tax returns and make payment online using the North Dakota Office of State Tax Commissioner website.
Is there a penalty for filing a sales tax return late in North Dakota?
Yes, penalties and interest can be imposed on businesses that file a sales tax return late in North Dakota.
What is the North Dakota Streamlined Sales Tax Agreement?
The North Dakota Streamlined Sales Tax Agreement is an initiative aimed at simplifying sales tax administration for businesses conducting transactions in multiple states.
What are the benefits of participating in the North Dakota Streamlined Sales Tax Agreement?
The benefits of participating in the North Dakota Streamlined Sales Tax Agreement include reduced paperwork and free software to simplify tax calculations.
Can I join the North Dakota Streamlined Sales Tax Agreement?
Yes, businesses can join the North Dakota Streamlined Sales Tax Agreement by contacting the North Dakota Office of State Tax Commissioner.
What are the resale certificate requirements in North Dakota?
You can use a resale certificate in North Dakota to purchase goods without paying sales tax if they will be resold.
How do I apply for a resale certificate in North Dakota?
You can apply for a resale certificate in North Dakota through the North Dakota Office of State Tax Commissioner website.
Is there a expiration date for resale certificates in North Dakota?
No, resale certificates in North Dakota do not have an expiration date.
Can I request a refund on sales tax paid in error in North Dakota?
Yes, you can request a refund on sales tax paid in error in North Dakota through the North Dakota Office of State Tax Commissioner website.

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Conclusion

Obtaining and maintaining a sales tax permit is crucial to running a compliant and successful business. By understanding the requirements and processes in North Dakota, you can ensure that your business collects and remits sales tax correctly and avoids any penalties for non-compliance. Consulting with a tax professional or North Dakota attorney is recommended to ensure that your North Dakota business meets all necessary sales tax requirements.

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