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Doing business in

North Dakota

Navigate North Dakota’s business landscape with ease—whether you’re incorporating, expanding, or managing tax compliance. Commenda helps you stay ahead with automated solutions for incorporation, compliance, and tax filings.
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north-dakota

Business Overview

North Dakota combines traditional strengths in agriculture and energy with growing technology and manufacturing sectors. The state offers low business costs, streamlined regulations, and targeted incentives. Its stable economy and budget surpluses support consistent business policies.

Key Facts & Figures

Category Details
Capital Bismarck
Major Cities Fargo, Bismarck, Grand Forks, Minot, West Fargo
State Sales Tax Rate 5%
Local Sales Tax Rate Up to 3% additional local taxes
Corporate Income Tax 2.5% flat rate
Physical Nexus Threshold Physical presence through employees, property, or representatives
Economic Nexus Threshold $100,000 in annual sales

Did you know?

North Dakota is a leader in renewable energy, particularly wind power, and has a growing technology and agricultural innovation sector.

Setup & Compliance

North Dakota provides business-friendly formation processes with moderate regulatory requirements.

Setting Up a North Dakota Business:

  1. Select Your Business Structure: Consider tax implications and liability protection needs.
  2. Register Your Business: File formation documents with the North Dakota Secretary of State.
  3. Register for Tax Accounts: Register with the Office of State Tax Commissioner for sales tax and withholding.
  4. Obtain Required Licenses: Research and secure necessary state and local business licenses.
  5. Register as an Employer: Register with Job Service North Dakota if hiring employees.

Key Compliance Requirements:

  • Annual Reports: North Dakota entities must file annual reports with the Secretary of State.
  • Sales Tax Collection: Collect and remit 5% state sales tax plus applicable local taxes.
  • Corporate Income Tax: Corporations pay progressive tax rates from 1.41% to 4.31%.
  • Employment Taxes: Employers must register for unemployment insurance and workers’ compensation.
  • Professional Licensing: Various professions require specialized licenses through state boards.

Hiring & Payroll

North Dakota provides a balanced approach to employment regulations.

North Dakota Payroll Requirements:

  • Unemployment Insurance: Rates from 0.13% to 9.5% on first $39,600 of wages.
  • State Income Tax Withholding: Required with progressive rates.
  • Workers’ Compensation: Required for most employers.

North Dakota Employment Laws:

  • Minimum Wage: Follows federal minimum wage ($7.25/hour).
  • No state-mandated paid sick or family leave.
  • New hire reporting within 20 days.
  • Final paycheck due on next regular payday.
  • North Dakota is an at-will employment state with right-to-work laws.

State Incentives

North Dakota provides targeted economic incentives to promote business growth.

Key Business Incentives:

  • Renaissance Zone Program: Tax incentives for business development.
  • Workforce Training Grant: Support for employee skill development.
  • Research and Development Tax Credit: Supports innovative company development.

Small Business & Startup Support:

  • North Dakota Small Business Development Center: Comprehensive business resources.
  • Agricultural Product Utilization Commission: Support for agricultural businesses.
  • Rural Business Development Grants.

Regulatory Considerations

North Dakota provides a regulatory environment supporting agricultural and energy industries.

Key Business Regulations:

  • Data Privacy: Laws protecting consumer and business information.
  • Environmental Compliance: Regulations for energy and agricultural sectors.
  • Professional Licensing: Required for various service-based professions.

Additional Regulatory Areas:

  • Energy and Agricultural Industry Compliance.
  • Rural Business Development Regulations.

Explore Tax & Compliance Topics

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