The Tax Foundation

Tax Data

North Dakota

The Facts on North Dakota’s Tax Climate

Here are some basic facts on North Dakota’s tax system and how it compares to other states:

Tax Freedom Day Arrives on April 12 in North Dakota
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2008, North Dakota taxpayers had to work until April 12 to pay their total tax bill, ranking it 39th highest in the nation. This is 11 days earlier than national Tax Freedom Day (April 23). The Tax Freedom Days of neighboring states are; Montana, April 8 (ranked 48th nationally) South Dakota, April 12 (ranked 41st nationally); and Minnesota, April 27 (ranked 8th nationally).

Tax Freedom Day has been projected using the most up-to-date economic and budget projections from official government agencies. However, Tax Foundation estimates of average state and local tax rates for 2008 will not be released until later this spring as we await more up-to-date data from various government agencies.
ull study of Tax Freedom Day, nationwide and in each state

North Dakota's State/Local Tax Burden Below National Average
Estimated at 9.2% of income, North Dakota's state/local tax burden percentage ranks 33rd highest in the nation, below the national average of 9.7%. Taxpayers in North Dakota pay $3,637 per capita in state and local taxes.
North Dakota's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008

North Dakota's 2008 Business Tax Climate Ranks 30th
North Dakota ranks 30th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Montana (6th), South Dakota (2nd) and Minnesota (42nd).
50-State Comparison of Business Tax Climates (data only)
2008 State Business Tax Climate Index, Fifth Edition (full study)

North Dakota's Individual Income Tax System
North Dakota's personal income tax system consists of five brackets and a top rate of 5.54% kicking in at an income level of $349,700. Among states levying personal income taxes, North Dakota's top rate of 5.54% is 31st highest nationally. North Dakota's 2005 individual income tax collections were $381 per person, which ranked 41st highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita

North Dakota's Corporate Income Tax System
North Dakota's corporate tax structure consists of five brackets with a top rate of 6.5% kicking in at $30,000. Among states that levy corporate income taxes, North Dakota's top rate ranks 30th nationally. In 2006, state-level corporate tax collections (excluding local taxes) were $188.90 per capita, which ranked 12th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2008
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006

North Dakota Levies Sales Tax Slightly below National Median
North Dakota levies a 5% general sales or use tax on consumers, which is slightly below the national median of 5.4 percent. State and local governments combined collected $1,244 per capita in general sales taxes in 2005, which ranks 23rd highest nationally. North Dakota's gasoline tax stands at 23 cents per gallon and ranks 28th highest nationally. North Dakota's cigarette tax stands at 44 cents per pack of twenty, ranking 40th highest nationally. The sales tax was adopted in 1935, the gasoline tax in 1919 and the cigarette tax in 1927.
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita, Fiscal Year 2005

North Dakota Property Taxes: Middle of the Pack
North Dakota is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. North Dakota's localities collected $583,144,000 in property taxes in fiscal year 2004, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, North Dakota collected $1,478,000 in property taxes during FY 2004, making its combined state/local property taxes $584,622,000. That brings its per capita collection to $919, ranking it 31st nationally.
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: North Dakota is a Beneficiary State
North Dakota taxpayers receive more federal funding per dollar of federal taxes paid than the average state. Per dollar of Federal tax collected in 2005, North Dakota citizens received approximately $1.68 in the way of federal spending. This ranks the state 6th highest nationally and represents a rise from 1995, when North Dakota received $1.47 per dollar of taxes in federal spending, ranking it 5th highest. Neighboring states and the amount of federal spending they received per dollar of federal taxes collected were: Montana ($1.47), South Dakota ($1.53), and Minnesota ($0.72).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

Tax Data from The Tax Foundation