North Dakota State Tax Guide

State tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact North Dakota residents.

Bottom Line

Middle-Class Families: Most Tax-Friendly (Go to the Kiplinger Tax Map for Middle-Class Families)

Retirees: Mixed Tax Picture (Go to the Kiplinger Tax Map for Retirees)

Even though North Dakota imposes an income tax, the rates are low, especially for mid-level earners and retirees. Plus, for 2022, a $350 nonrefundable credit is available for each resident ($700 for married couples).

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Sales taxes in the Peace Garden State are right around the national average, as are property taxes. There are no estate or inheritance taxes to worry about, either. When it's all added up, the typical tax burden for a North Dakota resident is average to light when compared to all the other states.

North Dakota Income Taxes

North Dakota Income Tax Range

Low: 1.1% (on up to $41,775 of taxable income for singles and up to $69,700 for married couples filing jointly)

High: 2.9% (on taxable income over $458,350)

North Dakota Taxation of Social Security Benefits

Social Security benefits are not taxed by the state. (Prior to 2021, Social Security benefits were not taxed for joint filers with a federal adjusted gross income of $100,000 or less and other taxpayers with a federal AGI of $50,000 or less.)

North Dakota Tax Breaks for Other Retirement Income

Military pensions and Railroad Retirement benefits are exempt.

North Dakota Sales Tax

5% state levy. Localities can add as much as 3.5%, and the average combined rate is 6.96%, according to the Tax Foundation.

  • Groceries: Exempt
  • Clothing: Taxable
  • Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 5% excise tax
  • Prescription Drugs: Exempt

North Dakota Real Property Taxes

In North Dakota, the median property tax rate is $939 per $100,000 of assessed home value.

North Dakota Property Tax Breaks for Retirees

A Homestead Tax Credit or Renter's Refund is available to senior citizens (age 65 and older) who own or rent their home. For married couples, only one spouse may apply for the credit. Your income, plus the income of your spouse and any dependents, may not exceed $42,000 for the calendar year preceding the assessment date. Your assets cannot exceed $500,000, including your home's market value and any assets gifted or divested within three years. The size of the credit depends on your income; the maximum homestead credit is $5,625 of taxable value for those with income of $22,000 or less. For renters, the refund cannot exceed $400. You can receive the refund if 20% of your annual rent exceeds 4% of your income.

North Dakota Motor Fuel Taxes

Gasoline: 23¢ per gallon.

Diesel: 23¢ per gallon.

North Dakota Sin Taxes

Cigarettes: $0.44 per pack

Cigars: 28% of the wholesale price

Chewing tobacco: $0.16 per ounce

Snuff: $0.60 per ounce

Beer: $0.16 per gallon

Wine: $0.50 per gallon

Liquor: $2.50 per gallon

All alcohol sales are also subject to a 7% sales tax.

North Dakota Estate and Inheritance Taxes

No estate or inheritance tax.

Rocky Mengle
Senior Tax Editor,

Rocky was a Senior Tax Editor for Kiplinger from October 2018 to January 2023. He has more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, he worked for Wolters Kluwer Tax & Accounting and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky has a law degree from the University of Connecticut and a B.A. in History from Salisbury University.