North Dakota‘s tax system ranks 9th overall on the 2025 State Tax Competitiveness Index. North Dakota performs above average across all tax categories, ranking in the top 10 states overall, as well as on the property tax and corporate tax components. While North Dakota’s corporate and individual income taxes have a graduated-rate structure, both rates are low, with North Dakota’s top marginal individual income tax rate tied with Arizona’s as the lowest in the country (2.5 percent).
One shortcoming in North Dakota’s tax code is its throwback rule, which increases tax liability for in-state businesses making sales of tangible personal property in states with which they lack nexus.
However, North Dakota conforms to federal expensing provisions under Section 168(k) and 179, conforms to the federal treatment of NOLs, and does not levy a capital stock tax, real estate transfer tax, or estate or inheritance tax.
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.
States that tax GILTI increase filing complexity, drive up the cost of tax compliance, and introduce unnecessary economic uncertainty and legal risk. 21 states and DC continue to tax GILTI despite these challenges.
Sports stadium subsidies are salient political gimmicks designed to appear as if politicians are providing tangible benefits to taxpayers. The empirical evidence shows repeatedly that stadium subsidies fail to generate new tax revenue and new jobs or attract new businesses.