North Dakota Sales Tax Permit: Apply in ND TAP 30 Days Before Opening, Not Transferable When You Buy a Business
North Dakota Sales Tax Permit: Apply in ND TAP 30 Days Before Opening, Not Transferable When You Buy a Business
If you sell taxable tangible personal property, recreational admissions or lodging in North Dakota, you need a sales and use tax permit before you make your first taxable sale. People often search for a north dakota sales tax license or a north dakota seller's permit. The state calls this registration a sales and use tax permit, not a license, but both search terms lead to the same document. The Office of State Tax Commissioner issues the permit, and you apply for it through ND TAP. This guide covers who needs one, when to apply, how the permit works, and what changes when you buy an existing business.
Disclaimer: This article is informational content, not legal or tax advice. Tax rules and agency procedures change, so confirm current requirements with the Office of State Tax Commissioner. If your situation is complicated, such as buying a business with an unclear tax history or selling in several states, talk with a qualified attorney or CPA before you act.
Who Needs a North Dakota Sales and Use Tax Permit
You need a sales and use tax permit if you sell any of the following:
- Taxable tangible personal property, meaning physical goods
- Recreational admissions
- Lodging
North Dakota's state sales tax is 5%. Cities and counties can add their own sales taxes on top of it, so confirm the total rate that applies at each location where you sell.
The permit is a tax registration, not a general business license. North Dakota issues no general statewide business license, and no major city issues one either. Licensing in North Dakota works by activity. If your work needs a separate license, such as contractor work, you apply with the agency that oversees that activity.
Before You Apply: Settle These Decisions
Answer these questions before you open the ND TAP application:
- What is your opening date? Your application should go in about 30 days before it.
- How many places of business will you operate? Each one needs its own permit.
- Will you sell taxable goods, admissions or lodging, or a mix of them?
- Are you starting from scratch or buying an existing business? A purchase changes the process, as covered below.
- Will you have employees? Withholding is a separate ND TAP account from the sales tax permit.
- Will you organize events with vendors? If so, you have a reporting duty after the event.
When to Apply: About 30 Days Before You Open
Apply in ND TAP about 30 days before your opening date. That lead time lets the permit arrive before your first taxable sale and gives you time to set up tax collection at your register or point of sale. Waiting until the week you open leaves little room for problems, and you should not make taxable sales until the permit is in hand.
How to Apply in ND TAP
ND TAP is the Tax Commissioner's online system. The sales and use tax permit application is available at tap.tax.nd.gov. Work through these steps:
- Confirm your category. Make sure what you sell falls under taxable goods, recreational admissions or lodging.
- Gather your business details. Have your legal business name, the address of each location, and the ownership information the application requests. The fields are set by the Commissioner's system, so read each screen carefully rather than relying on this list.
- Submit about 30 days before opening. Save a copy or confirmation of your submission.
- Display the permit. Once issued, the permit must be displayed at the location it covers.
- Confirm your filing and payment schedule. Before your first sale, ask the Tax Commissioner how and when you report and remit the tax you collect.
One Permit for Each Place of Business
The Tax Commissioner issues one permit per place of business. If you run two stores, each store needs its own permit, and each permit must be displayed at its own location. A permit is valid until revoked, which means it does not run on a fixed term. It can still be revoked, though, and reissuing a revoked permit has a cost, covered below.
Permits Are Not Transferable When You Buy a Business
A sales and use tax permit cannot be transferred. If you buy an existing business, the seller's permit does not carry over to you, and you must apply for your own new permit.
Do not assume the seller's permit covers your ownership. Apply for your own permit in ND TAP and plan to have it in hand before you make taxable sales under your ownership.
Build the permit into your purchase timeline. If the closing date is fixed, work backward from it. Plan around the same 30 day lead time so your application goes in before you take over operations and start collecting tax. A late application could leave you unable to make taxable sales on day one, which is a poor way to start a new ownership period.
Also ask your attorney or CPA whether any unpaid tax from the prior owner could affect you as the new owner, and whether your purchase agreement should address it. These are questions for a professional, because the answers depend on the terms of your deal.
Surety Bonds
The Tax Commissioner may require a surety bond under NDCC 57-39.2-12(3). A surety bond is a financial guarantee that some agencies require from businesses. Ask the Commissioner's office whether a bond applies to your situation before you apply, because a bond requirement can affect both your timeline and your budget.
What the Permit Costs
NDCC 57-39.2-14 sets no application fee for the permit. It does set reissue fees after a revocation:
| Situation | Fee |
|---|---|
| Initial sales and use tax permit application | No application fee set in NDCC 57-39.2-14 |
| Reissue after revocation | $50 |
| Reissue after revocation for four consecutive quarters with no tax due | $5 |
Confirm current fees on the Tax Commissioner's website at tax.nd.gov before you build your startup budget.
Event Organizers With 25 or More Vendors
If you organize an event with 25 or more vendors, you must report those vendors to the Tax Commissioner within 20 days of the event. Put this on your close-out checklist so it does not slip after a busy weekend.
Buyer Certificates and Checking a Buyer's Permit
When a buyer does not pay sales tax because the purchase is for resale, processing or contractor work, the buyer presents the matching certificate: resale, processing or contractor. North Dakota also accepts the Streamlined and Multistate Tax Commission multijurisdiction certificates.
To check whether a buyer holds a permit, use the permit lookup tool on the Tax Commissioner's site. Keep the certificates you receive with your sales records. For certificate detail, see this site's resale certificate guide.
Construction Work Needs a Separate License
If your business does construction work, the sales tax permit does not replace a contractor license. The Secretary of State requires a North Dakota contractor license when the cost, value or price of a job exceeds $4,000. Class D licenses cost $100 and cover jobs up to $100,000, while Class A licenses cost $450 and cover jobs over $500,000. Contractor licenses renew annually by March 1. Confirm current details at sos.nd.gov.
Questions to Ask the Tax Commissioner
Before you open, put these questions to the Tax Commissioner's office and write down the answers:
- How often do I file and pay, and what is my due date?
- Does a surety bond apply to my business?
- How long will my permit take to arrive after I submit my application?
- If I bought an existing business, how should I handle sales tax for the period before I took over?
Common Mistakes to Avoid
- Assuming the seller's permit carries over after a purchase.
- Applying in the final week before opening instead of about 30 days ahead.
- Using one permit to cover two places of business.
- Forgetting that withholding is a separate ND TAP account.
- Failing to display the permit at its location.
- Missing the 20 day window for reporting event vendors.
Official Resources
- Office of State Tax Commissioner: https://www.tax.nd.gov/
- ND TAP sales and use tax permit application: https://tap.tax.nd.gov/?Link=Application
- North Dakota Secretary of State: https://www.sos.nd.gov/
Apply early, confirm the details with the Tax Commissioner, and bring in a qualified attorney or CPA if your purchase or setup is complicated. This content is informational only and is not legal or tax advice.