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North Dakota | #9 Overall
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.
| Category | Rank | Rank Change | Score |
|---|---|---|---|
| Overall | 9 | 0 | 5.67 |
| Corporate Taxes | 7 | -3 | 5.75 |
| Individual Income Taxes | 17 | 2 | 5.69 |
| Sales Taxes | 15 | 0 | 5.17 |
| Property Taxes | 4 | -2 | 6.34 |
| Unemployment Insurance Taxes | 12 | -6 | 5.58 |
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