North Dakota has a graduated state individual income tax, with rates ranging from 1.10 percent to 2.50 percent. North Dakota has a flat 4.31 percent corporate income tax rate, a 5.00 percent state sales tax rate, and an average combined state and local sales tax rate of 6.89 percent. North Dakota has a 0.92 percent effective property tax rate on owner-occupied housing value. North Dakota does not have an estate tax or inheritance tax. North Dakota’s gas tax is 23.03 cents per gallon, and its cigarette excise tax is $0.44 per pack of 20 cigarettes.
North Dakota raises tax revenue primarily through other taxes (52.2 percent of total state and local tax revenue), general sales taxes (20.9 percent), and property taxes (16.3 percent). North Dakota collects $9,834 in state and local tax collections per capita, carries $11,499 in state and local debt per capita, and has a 74 percent funded ratio of public pension plans. North Dakota’s tax system ranks 11th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and North Dakota is no exception. Use the tabs below to compare North Dakota taxes with other states and to see how North Dakota raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
9 min read
The vaping industry has grown rapidly in recent decades, becoming a well-established product category and a viable alternative to cigarettes for those trying to quit smoking. US states levy a variety of tax structures on vaping products.
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Different layers of taxation on production and distribution combine to make up about 40 percent of the retail price of beer.
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Newer products like spirits-based hard seltzers and ready-to-drink cocktails have fueled growth, while also blurring the lines of a categorical tax system. The result has been a spirited competition throughout the alcohol industry for market share, including calls to reform tax policy.
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Gross receipts taxes impose costs on consumers, workers, and shareholders alike. Shifting from these economically damaging taxes can thus be a part of states’ plans for improving their tax codes in an increasingly competitive tax landscape.
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Gas tax revenues have decoupled from road expenses and have been unable to support road funding in recent years. As such, states nationwide are exploring ways to supplement or replace gas tax revenues.
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At the end of 2025, the individual tax provisions in the Tax Cuts and Jobs Act (TCJA) expire all at once. Without congressional action, most taxpayers will see a notable tax increase relative to current policy in 2026.
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States have generally tried to encourage capital investment. Throwback and throwout rules are an unfortunate example of penalizing it.
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One relatively easy but meaningful step policymakers can take to make future tax seasons less burdensome is to modernize their state’s nonresident income tax filing, withholding, and reciprocity laws.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Savings and investment are critical activities, both for individuals’ and families’ financial security and for the health of the national economy as a whole. As such, policymakers should consider how they can help mitigate—rather than add to—tax codes’ biases against saving and investment.
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