For business owners operating in North Dakota, finding answers about your small business taxes can be tricky. The state of North Dakota doesn’t approach you with their tax information and changes; instead, they expect you to seek out the small business tax laws, and to keep yourself updated on the changes. As a business owner, this entire responsibility falls to you.

You may be considering setting up your business as what is called a “subchapter S” corporation. If that is the case, and you conduct any business at all in North Dakota, you will be required to file a North Dakota small business corporation income tax return. If all of your business took place in the state, you will file all your profit or loss here; if you did part of your business elsewhere, you will still file the return, but you are only required to attribute the portion of your business that you did in North Dakota to the state. You also are required to report this income to all your shareholders. The state does not have a specific form to use for doing this report.

If you’re going to collect any sales and use tax in North Dakota, you must apply for a permit from the state. These are not transferable, so if you change ownership or reorganize you have to apply for and obtain a new permit.

As far as how much sales tax you have to charge, North Dakota’s state sales tax is 5 percent, with food and prescription drugs exempt. There is a 6 percent tax on lodging, and 7 percent on alcoholic  beverages. Cities and counties that have home rule charters are allowed to impose additional sales and use taxes, which may be an extra 2.5 percent, so be sure to check with your locality.

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This entry was posted on Tuesday, December 5th, 2006 at 4:13 pm and is filed under Small Business Tax Laws, Tax Laws. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.