North Dakota state tax: Overview
North Dakota has a state income tax, but the rate is low compared to other states.
Additionally, the state's alcohol and tobacco taxes are low, and the property tax rates are on par with those in other states.
[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.]
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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 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.
North Dakota sales tax
North Dakota's statewide sales tax is 5%. Localities can add up to 2.94%, but the average combined sales tax rate is 7.04%, according to the Tax Foundation.
- Groceries: Exempt
- Prescription drugs: Taxable
How much are property taxes in North Dakota?
In North Dakota, the average effective property tax rate is 0.97%, 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 |
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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