North Dakota Tax Guide 2025
Explore North Dakota's 2025 state tax rates for income, sales, property, retirement, and more. Learn how North Dakota compares nationwide.
Navigating the complexities of state taxes can be daunting, but understanding North Dakota's tax landscape is essential for residents and newcomers alike.
In this guide, we'll explore key components of The Peace Garden State's tax system, from income and sales taxes to property taxes and retirement benefits.
North Dakota state tax: Overview
North Dakota does have a state income tax, but the rate is lower than in many other states, which can be a welcome break for residents. The state also keeps alcohol and tobacco taxes on the low side, which helps keep certain costs in check.
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Property tax rates are about average, so homeowners are unlikely to face major surprises there.
Combined with the relatively low income tax, these factors can make North Dakota’s overall tax burden feel a bit lighter than in many other parts of the country.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
North Dakota income tax
North Dakota has a graduated state individual income tax rate ranging from 1.95 percent to 2.50 percent.
North Dakota retirement taxes
North Dakota tax on retirement benefits: North Dakota doesn't tax Social Security retirement benefits.
The state doesn't tax Military pensions or Railroad Retirement benefits, either.
- Tax on Taxable Income: Low of 0% (on up to $47,150 for single filers and $78,775 for joint filers) and a high of 2.5% (on more than $238,200 for single filers and $289,975 for joint filers)
- Social Security: Not taxable
- Pensions: Taxable (Excluding military retirement pay)
- 401(k) and IRA Distributions: Taxable
North Dakota sales tax
North Dakota's statewide sales tax is 5%. Localities can add up to 2.05%, but the average combined sales tax rate is 7.05%, according to the Tax Foundation.
- Groceries: Exempt
- Prescription drugs: Taxable
- Clothing: Taxable
How much are property taxes in North Dakota?
In North Dakota, the average effective property tax rate is 0.94%, which is reasonable when compared to property taxes in many other states.
North Dakota Property Tax Breaks for Retirees
North Dakota Homestead Tax Credit or Renter's Refund: Some state residents can receive a property tax credit or a partial refund of rent they pay. The homestead tax credit could reduce a property's taxable value by up to $9,000. Renter's refunds are worth up to $400. Homeowners and renters must meet one of the following criteria to qualify.
- Be 65 or older
- Have a permanent or total disability
North Dakota gas tax
Gasoline | $0.23 per gallon |
Diesel | $0.23 per gallon |
Source: Sales Tax Handbook
North Dakota alcohol and tobacco taxes
Product | Tax Amount |
|---|---|
Cigarettes | $0.44 per pack |
Chew Tobacco and Snuff | $0.16-$0.60 per ounce |
Cigars and Tobacco | 28% of wholesale price |
Medical Marijuana | 5% |
Source: Sales Tax Handbook
Product | Tax Amount |
|---|---|
Wine | $0.50 per gallon |
Beer | $0.16 per gallon |
Liquor | $2.50 per gallon |
Source: Sales Tax Handbook
Note: Alcohol in North Dakota is also subject to a 7% sales tax.
North Dakota estate and inheritance taxes
North Dakota is one of the many states with no estate or inheritance taxes.
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