North Dakota

Tax Rate Range: * Low - 2.1%; High - 5.54%
Income Brackets: Lowest - $30,650; Highest - $336,551
Number of Brackets: 5
Personal Exemptions: ** Single - $3,200; Married - $6,400; Dependents - $3,200
Standard Deduction: Federal amount
Medical/Dental Deduction: Full
Federal Income Tax Deduction: *None
Retirement Income Taxes: A total of $5,000 can be excluded from military, civil service, some state/local government, and qualified pensions, minus amount of Social Security received. Out-of-state government pensions are fully taxed. Call 701-328-3275 for more information.
Retired Military pay: If Form ND-2 is used, an exclusion is allowed if a retiree is at least 50 years of age. The exclusion is equal to the lesser of (1) the total amount of taxable military retirement benefits reduced by any Social Security benefits received, or (2) $5,000 reduced by any Social Security retirement benefits received. SBP benefits are taxed according to federal tax rules.

State Tax Software

Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.
* Rates reported are for standard form filers. Long form filer's rates range from 2.67% for income under $3,000 to 12% over $50,000. Long form filers can deduct federal income taxes. An additional $300 personal exemption is allowed for joint returns or unmarried head of households.
** State allows personal exemption or standard deductions as provided in the Internal Revenue Code.

Sales Taxes

State Sales Tax: 5% (food and prescription drugs exempt); 6% on lodging, 7% on alcoholic beverages. Cities or counties which have adopted home rule charters may levy additional sales and use taxes up to 2.5%.
Gasoline Tax: 23 cents/gallon
Diesel Fuel Tax: 21 cents/gallon
Gasohol Tax: 23 cents/gallon
Cigarette Tax: 44 cents/pack of 20

All real property in the state is subject to tax by the state, counties, townships, and municipalities. Residential property is taxed as 9% of assessed value. For homeowners 65 and older who earn $14,000 or less and have assets of no more than $50,000 (excluding the first $80,000 of their home's unencumbered value), the taxable value of their property is reduced by up to $2,000 through a homestead tax credit. Similar rules apply to renters. Maximum refund is $240. Personal property is not taxed. Call 701-328-3127 for details.

North Dakota does not have an inheritance tax. It was repealed in 1927 and replaced with an estate tax. There is an estate tax based on a decedent's total gross estate and limited to the credit for state death taxes allowed on the Federal 706 estate tax return.
For further information, visit the North Dakota State Tax Department site or call 800-638-2901.