North Dakota's 5% state rate combined with modest local taxes (averaging 2.05%) gives a typical combined rate around 7%. Fargo, the largest city at 7.5%, is the primary retail hub. North Dakota exempts groceries and prescriptions, and has a clean, relatively straightforward tax system for a Plains state.
North Dakota sales tax overview
| Component | 2026 Rate |
|---|---|
| State sales tax | 5.00% |
| Avg local add-on | 2.05% |
| Avg combined | 7.05% |
| Maximum combined | 8.50% |
North Dakota sales tax by city
Combined state + local sales tax rates for major cities in North Dakota:
| City | Combined Rate |
|---|---|
| Fargo | 7.50% |
| Bismarck | 7.00% |
| Grand Forks | 7.25% |
What's exempt in North Dakota
Groceries
Exempt from North Dakota state sales tax. Local jurisdictions may still tax.
Clothing & footwear
Taxed at standard rate.
Prescription drugs
Exempt from sales tax (typical across most states).
How North Dakota sales tax is calculated
Sales tax in North Dakota is calculated by multiplying the pre-tax purchase price by the applicable combined rate. The formula is simple:
Sales Tax = Purchase Price × 7.05% (avg combined)
Total = Purchase Price + Sales Tax
The exact rate depends on where the purchase occurs — the state base rate (5.00%) plus any local city or county add-ons. North Dakota allows local jurisdictions to add their own taxes, so the rate varies by location.
Quick calculation examples at average rate 7.05%:
$100 item
$7.05 tax
$107.05 total
$250 item
$17.63 tax
$267.63 total
$500 item
$35.25 tax
$535.25 total
$1,000 item
$70.50 tax
$1070.50 total
Additional tax-free items in North Dakota
Beyond the standard exemptions, North Dakota also provides sales tax relief on these categories:
Exemptions may have conditions. Always verify with the North Dakota Department of Revenue for complete rules.
North Dakota sales tax in context: rates, history, and neighbors
North Dakota's 5% state sales tax (since 1985) plus city/county add-ons (1-3%) gives an average combined rate of 7.05%. Fargo 7.5%, Bismarck 7%, Grand Forks 7.25%, Minot 7.5%. ND exempts groceries and prescription drugs. ND has very generous farm equipment and agricultural exemptions reflecting the state's agriculture-dominated economy. ND is famously the state that brought the South Dakota v. Wayfair case predecessor (Quill v. North Dakota, 1992) — though the modern Wayfair case overturned the Quill physical presence rule. Compared to neighbors: South Dakota (~6.10%), Minnesota (~8.05%), Montana (0%) — ND sits in the middle. ND is a Streamlined Sales Tax (SST) Agreement member, simplifying compliance.
Online shopping & North Dakota sales tax
North Dakota enacted economic nexus effective October 2018 — sellers with $100,000+ or 200+ ND transactions must collect North Dakota sales tax. ND is a member of the Streamlined Sales Tax (SST) Agreement. Online purchases delivered to North Dakota addresses are subject to ND sales tax collected by the seller.
Use Tax reminder: If you purchase taxable goods online from a seller who does NOT collect North Dakota sales tax, you technically owe Use Tax — the same rate as sales tax, reportable on your North Dakota state tax return. Use Tax enforcement on consumers is rare but the obligation exists for significant purchases.
How much North Dakota sales tax on common purchases?
Using North Dakota's average combined rate of 7.05%:
| Purchase | Price | Sales Tax | Total |
|---|---|---|---|
| Grocery cart | $150 | Exempt | $150.00 |
| Clothing / shoes | $120 | $8.46 | $128.46 |
| Prescription drug | $80 | Exempt | $80.00 |
| Smartphone | $999 | $70.43 | $1069.43 |
| Laptop / tablet | $1,299 | $91.58 | $1390.58 |
| New car ($35,000) | $35,000 | $2467.50 | $37467.50 |
| Home appliance | $1,500 | $105.75 | $1605.75 |
| Restaurant meal | $60 | $4.23 | $64.23 |
Based on North Dakota's average combined rate of 7.05%. Exact tax depends on city/county. Use our calculator above for specific locations and amounts.
Collecting sales tax in North Dakota: business guide
If you sell goods or taxable services to North Dakota customers, here's what you need to know:
- Registration: Register for a North Dakota sales tax permit/license through the North Dakota Department of Revenue before making your first taxable sale. Most states process registrations online within a few days.
- Economic nexus (online sellers): If you have $100,000+ in North Dakota annual sales or 200+ transactions, you must collect North Dakota sales tax even without a physical presence in the state — per South Dakota v. Wayfair (2018). You must collect both state (5.00%) and applicable local rates.
- Destination vs origin sourcing: North Dakota uses destination-based sourcing for most sales — the tax rate where the buyer receives the goods applies. Always use the customer's delivery address to determine the rate.
- Filing frequency: Frequency depends on your North Dakota sales volume — monthly for high-volume sellers, quarterly or annually for low-volume sellers. Check with the North Dakota Department of Revenue for your specific filing schedule.
- Marketplace sales: If you sell through Amazon, Etsy, eBay, or similar platforms, the marketplace is required to collect and remit North Dakota sales tax on your behalf — you don't need to collect it separately on marketplace transactions.
- Resale certificates: Businesses purchasing goods for resale can provide a North Dakota resale certificate to suppliers to avoid paying sales tax on wholesale purchases. Keep copies of all resale certificates for audits.
Streamlined Sales Tax (SST): North Dakota is a full member of the Streamlined Sales Tax (SST) Agreement, which simplifies multi-state sales tax registration and compliance through a single registration portal (streamlinedsalestax.org).
North Dakota-specific business compliance details
North Dakota businesses register with the ND Office of State Tax Commissioner at tax.nd.gov for a Sales Tax Permit. Filing frequency: monthly for most, quarterly for smaller, annually for very small. Out-of-state sellers with $100,000+ in ND sales (or 200+ transactions) must collect ND tax (economic nexus, since October 2018). ND is a Streamlined Sales Tax (SST) Agreement member. Marketplace facilitators collect ND tax. ND uses destination-based sourcing. ND has comprehensive agricultural exemptions — farm equipment, irrigation, livestock, feed are all exempt. Penalties: 5% per month (capped at 25%) plus interest.
North Dakota sales tax frequently asked questions
What is the sales tax rate in Fargo, North Dakota?
Fargo's combined sales tax rate is 7.5% — the highest in North Dakota. This includes 5% state + 2.5% city of Fargo. Bismarck is 7% (5% state + 2% city); Grand Forks is 7.25% (5% state + 2.25% city). North Dakota's rates are relatively straightforward — most of the state falls between 5% (state-only rural areas) and 7.5% (Fargo).
Does North Dakota have a sales tax on farm equipment?
North Dakota fully exempts farm machinery, farm equipment, irrigation equipment, and farm supplies from sales tax. This is a significant exemption in an agricultural-dominated economy. Seeds, fertilizers, and livestock feed are also exempt. This agricultural exemption is among the most comprehensive in the US, reflecting North Dakota's identity as a leading agricultural producer.
Are online purchases from other states taxable in North Dakota?
Yes — if the out-of-state seller meets North Dakota's economic nexus threshold ($100,000 or 200 transactions), they must collect North Dakota sales tax on your purchase. Major retailers like Amazon, Walmart.com, and Target.com all collect ND tax automatically. If you purchase from a small retailer who doesn't collect ND tax, you technically owe ND Use Tax at the same rate as sales tax, reportable on your state tax return.