North Dakota law
Tax Laws in North Dakota.
North Dakota imposes a graduated individual income tax with a top rate of 2.5% (2025) — among the lowest state income taxes in the U.S. North Dakota enacted a 2023 tax reform (HB 1158) creating a flat 2.5% rate for high-income earners (phasing to eventual flat rate by 2028). Sales tax is 5% state + local (combined rates commonly 7-8.5%). Corporate income tax is 1.41% to 4.31% graduated. Oil and gas production taxes (oil extraction tax + oil and gas gross production tax) produce a major revenue source. No state estate tax. Property taxes are moderate by national comparison.
Last verified: 2026-04-17
State law
Key North Dakota Statutes
Graduated rates from 0% (on income under $44,725 single) to 2.5% (top marginal rate). Among the lowest state income taxes nationally. North Dakota partially conforms to the federal IRC.
5% state sales tax. Local option sales taxes produce combined rates commonly 7-8.5%.
Graduated: 1.41% on first $25K; 3.55% on $25K-$50K; 4.31% on $50K+. Apportionment by three-factor or single-sales-factor depending on election.
5% extraction tax on the gross value of oil produced in North Dakota. One of the state's major revenue sources given the Bakken Shale development.
5% gross production tax on oil and natural gas. Together with the oil extraction tax, produces a combined effective rate of approximately 10% on Bakken oil production.
Locally assessed. North Dakota has established a State Homestead Credit and Disabled Veterans Credit for property tax relief.
North Dakota has no estate tax and no inheritance tax.
State law
Official Sources
Not Legal Advice
This page summarizes publicly available statutes and rules for informational purposes only. It does not constitute legal advice, and no attorney-client relationship is created by viewing this content. Laws change — always verify with the primary source or consult a licensed attorney in North Dakota.
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