North Dakota Business Income Tax: 2.5% Top Individual Rate, Corporate 1.41% to 4.31% and 2.5% Nonresident Member Withholding

If you are looking up the North Dakota state income tax rate for your business, the answer depends on how the business is organized. North Dakota does have an income tax. Pass-through entities such as partnerships, multi-member LLCs and S corporations generally pay no entity-level income tax. Their income flows through to the owners, who pay the individual rates, which top out at 2.5%. A business taxed as a C corporation pays the corporate income tax, with graduated rates from 1.41% to 4.31%.

This guide covers the individual brackets, the corporate brackets, the filing deadlines for each structure, and the 2.5% withholding rule that applies when an owner lives outside North Dakota. It is informational content, not legal or tax advice.

North Dakota State Income Tax Rate for Individuals

Individuals pay North Dakota income tax on a graduated schedule that starts at 0%. For tax year 2025, the brackets are:

Filing status	0% bracket	1.95% bracket	2.5% bracket
Single	First $48,475	$48,475 to $244,825	Over $244,825
Married filing jointly	First $80,975	$80,975 to $298,075	Over $298,075

Individual income tax returns are due April 15. The top 2.5% rate is the one that matters most for owners of pass-through businesses, because it is the rate applied to their share of business income that is high enough to reach the top bracket. It is also the rate used for nonresident withholding, covered below.

How LLCs, Partnerships and S Corporations Are Taxed

North Dakota follows the federal tax classification of the entity. A partnership, a multi-member LLC taxed as a partnership, or an S corporation passes its income through to its owners. Each owner reports their share on their own North Dakota return at the individual rates above. Income is taxed at the owner level, not the entity level.

The entity-level filing forms are:

• Form 58: partnership and LLC returns, due April 15.
• Form 60: S corporation returns, due April 15.

Because the entity files an information return while the owners pay the tax, the owners need their share of North Dakota income documented before they can file their own returns. Keep a schedule of each owner's share from the first day of the year, not just at tax time.

North Dakota Corporate Income Tax Rate: 1.41% to 4.31%

A business taxed as a C corporation files Form 40, due April 15. The corporate tax is graduated:

North Dakota taxable income	Tax owed
First $25,000	1.41%
$25,000 to $50,000	$352.50 plus 3.55% of the amount over $25,000
Over $50,000	$1,240 plus 4.31% of the amount over $50,000

These rates have been unchanged since 2015. A corporation that makes a water's-edge election pays an additional 3.5% surtax, so check whether that election applies to your situation before you assume the base schedule is your full liability.

The corporate income tax is separate from the Secretary of State's Business Corporation Annual Report. That report carries a $25 fee and is due August 1 each year for domestic corporations. Foreign corporations holding a North Dakota certificate of authority file by May 15. Missing the report creates a compliance problem that is unrelated to your income tax return, so track both deadlines.

Nonresident Member Withholding at 2.5%

This is the rule that surprises many out-of-state owners. When a pass-through entity has a nonresident member, the entity withholds 2.5% of that member's share of North Dakota income. That is the same as the top individual rate. The withholding requirement comes from NDCC 57-38-31.1.

Withholding does not apply in every case. The main exceptions are:

• Members with less than $1,000 of North Dakota income.
• Members who join a composite return filed by the entity.
• Certain other cases described by the Office of State Tax Commissioner.

Composite returns are allowed. A composite return lets the entity report and pay tax on behalf of its nonresident owners, and it is the usual way to satisfy the rule for a group of out-of-state members. Pass-through entities with 10 or more owners must e-file their returns.

A practical test: for each nonresident owner, confirm their North Dakota income, check whether the $1,000 exception applies, and decide whether to include them in a composite return before the entity pays out or reports income. Because the withholding rate is the top individual rate, an error in this area can cost the entity or the owner real money, so confirm the exceptions and composite return rules with the Tax Commissioner for your facts.

Estimated Payments

A C corporation must make estimated payments when its expected North Dakota income tax liability exceeds $5,000 and its prior-year liability also exceeded $5,000. An individual, including a pass-through owner, may need to pay estimated North Dakota tax if federal estimated tax is required and the expected North Dakota net tax liability is more than $1,000. S corporations and partnerships are not required to make estimated payments themselves. Check the thresholds each year, because a strong income year can push an owner over them.

North Dakota Business Tax Credits

North Dakota offers several business credits that can reduce the tax owed. The credits covered by the Tax Commissioner include:

• Apprentice employment
• Workforce recruitment
• Employer child care
• Automation equipment
• Research expense
• Seed capital
• Angel investor

Each credit has its own eligibility rules, forms and documentation requirements. Do not assume a credit applies because your business fits a general description. Confirm eligibility and current requirements with the Office of State Tax Commissioner before you claim one.

Entity-Level and Pass-Through Elections

Some elections change how an entity is taxed at the entity level, and those elections do not fit neatly into the standard rules above. For any entity-level (pass-through) tax election, check with the Office of State Tax Commissioner before you file. The answer depends on the specific election and the facts of your entity, so do not rely on general guidance from other states.

Related Filings Outside the Income Tax Return

Income tax is only one part of your North Dakota obligations. Keep these filings separate on your calendar:

• LLC annual report: $50, due November 15 for business LLCs and PLLCs. Farming or ranching LLCs and authorized livestock farm LLCs are due April 15 instead. A late filing adds a $50 late fee after the statutory due date.
• Corporation annual report: $25, due August 1 for domestic corporations.
• Sales and use tax permit: any business making taxable sales must hold one from the Office of State Tax Commissioner. Apply through ND TAP at https://tap.tax.nd.gov/?Link=Application about 30 days before you open. The state sales tax rate is 5%, plus any city and county taxes.

Your Filing Checklist

1. Confirm your entity's federal tax classification, since North Dakota follows it.
2. Record the residency of each owner and each member's share of North Dakota income.
3. Check whether any nonresident owner qualifies for the $1,000 exception or should join a composite return.
4. Calendar April 15 for individual returns, Form 40, Form 58 and Form 60 as they apply to you.
5. Check the estimated payment thresholds that apply to you: more than $5,000 this year and last year for a C corporation, or more than $1,000 of expected North Dakota liability for an individual who owes federal estimated tax.
6. Review the credits that may apply to your operations, and confirm eligibility with the Tax Commissioner.
7. Calendar the Secretary of State annual report for your entity type.

Official Resources

• North Dakota Office of State Tax Commissioner: https://www.tax.nd.gov/
• North Dakota Secretary of State: https://www.sos.nd.gov/
• North Dakota Small Business Development Centers: https://und.edu/ndsbdc/index.html

Important Disclaimer

This article is informational only and is not legal, tax or accounting advice. Tax rules, rates and credits can change, and the figures here reflect tax year 2025 as published by the Office of State Tax Commissioner. Withholding, composite returns, pass-through elections and credits involve facts specific to your business. Consult a North Dakota CPA or a qualified tax attorney before you file, and confirm current figures with the Tax Commissioner at https://www.tax.nd.gov/.