North Dakota State Tax Rate Guide 2025-2026 – North Dakota offers one of the most competitive tax environments in the United States, with low individual income tax rates, a moderate sales tax, and ongoing property tax relief. Whether you’re a resident filing your 2025 return in 2026, a business owner, or considering a move to the state, this comprehensive guide covers the latest North Dakota state tax rates for tax years 2025 and 2026. All information is sourced directly from the North Dakota Office of State Tax Commissioner and the Tax Foundation for accuracy and currency as of April 2026.
Overview of North Dakota’s Tax System in 2025-2026
North Dakota maintains a simple, low-burden tax structure designed to support residents and economic growth. The state has no estate or inheritance tax, and its individual income tax remains among the lowest in the nation. Recent legislative reforms have expanded property tax relief, including credits that eliminate taxes for many households and a 3% cap on local budget increases. For 2025-2026, the core tax rates remain stable, with brackets typically adjusted for inflation and local sales taxes subject to minor jurisdictional updates.
This guide focuses on the major taxes affecting individuals and businesses: individual income tax, sales and use tax, corporate income tax, and property tax.
North Dakota Individual Income Tax Rates 2025-2026
North Dakota uses a graduated individual income tax with three brackets (including a 0% bracket). Rates are applied to North Dakota taxable income after federal adjustments and deductions.
2025 Tax Year Rates (Filed in 2026)
Single Filers / Head of Household
- $0 – $48,475: 0.00%
- $48,475 – $244,825: 1.95% of amount over $48,475
- Over $244,825: 2.50% of amount over $244,825 + $3,828.83
Married Filing Jointly / Qualifying Surviving Spouse
- $0 – $80,975: 0.00%
- $80,975 – $298,075: 1.95% of amount over $80,975
- Over $298,075: 2.50% of amount over $298,075 + $4,233.45
Married Filing Separately follows half the joint brackets.
North Dakota also offers a standard deduction (aligned with federal amounts in recent years, approximately $15,000 single / $30,000 joint for 2025, subject to confirmation on your return).
2026 Tax Year Outlook
The marginal rates remain 0%, 1.95%, and 2.50%. Brackets are inflation-adjusted annually. Withholding tables for 2026 show updated figures (e.g., single 0% up to approximately $57,625), confirming the same low-rate structure continues.
North Dakota’s top rate of 2.5% is among the lowest in the country, making it attractive for high earners.
North Dakota Sales and Use Tax Rates 2025-2026
The state sales tax rate is a flat 5% on most retail sales of tangible personal property and certain services. This rate has remained unchanged for 2025 and 2026.
Local city and county taxes can add 0%–3.5%, resulting in a combined rate ranging from 5% to 8.5% depending on location. Examples of recent local changes include increases in cities like Bismarck, Fargo, and counties like Walsh. Always verify the exact rate for your city or county using the ND Tax Commissioner’s local tax lookup tool.
Key notes:
- Gross receipts tax applies at 7% on alcoholic beverages and 3% on new farm machinery/mobile homes.
- Exemptions include many business purchases with resale certificates, certain nonprofit and government sales, and qualifying out-of-state purchases.
- Use tax applies to items bought out-of-state and brought into North Dakota.
North Dakota Corporate Income Tax Rates 2025-2026
North Dakota imposes a graduated corporate income tax on C-corporations doing business or deriving income in the state. Rates and brackets are unchanged for 2025-2026.
| Taxable Income | Tax Rate |
|---|---|
| $0 – $25,000 | 1.41% |
| $25,000 – $50,000 | $352.50 + 3.55% over $25,000 |
| Over $50,000 | $1,240 + 4.31% over $50,000 |
Corporations electing the water’s-edge apportionment method pay an additional 3.5% surtax. Pass-through entities (S-corps, partnerships, LLCs) generally avoid entity-level tax and pass income to owners’ individual returns.
North Dakota Property Tax Rates and Relief 2025-2026
There is no single statewide property tax rate—rates are set locally by counties, cities, and school districts. The statewide average effective property tax rate on owner-occupied housing is approximately 0.94% (one of the lower rates nationally).
Major 2025-2026 Relief Measures:
- A $1,600 property tax credit on primary residences (part of the 2025 relief package) has eliminated taxes for roughly 30% of eligible households (about 50,000 homes).
- A 3% annual cap on local government budget increases (with banking of unused capacity) began fully impacting 2026 tax statements.
- These reforms provide significant savings for homeowners and stabilize rates.
Property taxes remain deductible on your federal return (subject to federal limits).
Other Key Taxes in North Dakota
- Gas Tax: 23 cents per gallon (among the lowest nationally).
- Cigarette Tax: $0.44 per pack.
- No estate or inheritance tax.
- Unemployment Insurance and Other Payroll Taxes: Competitive rates; North Dakota follows federal rules with state-specific withholding.
How North Dakota Taxes Compare Nationally (2025-2026)?
According to the Tax Foundation’s 2026 rankings:
- North Dakota ranks 11th overall in tax competitiveness.
- Individual income tax burden is low (rank 40 in collections per capita).
- Combined state-local sales tax is moderate (7.08% average).
- Property tax burden is below average.
North Dakota consistently ranks as a top state for business climate and low overall tax burden (8.8% of income).
Filing and Payment Tips for North Dakota State Taxes
- Individual Returns: Use Form ND-1. File electronically via ND TAP (preferred) by April 15, 2026, for 2025 taxes.
- Business Returns: Corporations file Form 40; sales tax remitters use ND TAP.
- Withholding: Employers use the latest 2025 or 2026 withholding tables.
- Free Resources: Visit tax.nd.gov for forms, calculators, guidelines, and local rate lookups.
- Penalties: Late filing incurs interest and penalties—file on time or request an extension.
Consult a tax professional for complex situations like multi-state income or business apportionment.
Final Thoughts: Why North Dakota’s Tax Rates Matter in 2025-2026?
North Dakota continues to deliver low taxes, targeted relief, and a business-friendly environment. With stable rates, inflation-adjusted brackets, and new property tax protections, the state remains an excellent choice for families, retirees, and companies looking to minimize their tax load while enjoying strong economic opportunities.
For the most up-to-date rates, always check the official North Dakota Office of State Tax Commissioner website at tax.nd.gov or consult a qualified tax advisor. Tax laws can evolve, and your individual situation may vary.
This guide is for informational purposes only and is not tax advice.