What taxes apply to a new small business?

Taxes Applicable to a New Small Business in North Dakota

When starting a small business in North Dakota, understanding your tax obligations is critical for smooth operations and compliance. Below are the key taxes you should consider:

• State Income Tax: North Dakota imposes a state income tax on business income. Depending on your business structure (e.g., sole proprietorship, LLC, corporation), income may be reported on your personal or business tax returns.
• Sales and Use Tax: If your business sells tangible goods or certain services, you must collect and remit North Dakota sales tax. The statewide sales tax rate is 5%, with possible local additions. Register for a sales tax permit before beginning sales.
• Employer Taxes: If you hire employees, you need to withhold federal and state income taxes from wages and pay employer contributions such as:
• State unemployment insurance tax
• Federal and state payroll taxes
• Property Tax: Businesses owning real or personal property in North Dakota are subject to property taxes assessed by local jurisdictions. Maintain accurate records for property tax reporting.
• Excise Taxes: Certain industries, such as fuel, tobacco, or alcohol sales, may be subject to additional state excise taxes. Verify if your business activities trigger these requirements.

As of 2026, it is important to register your business with the North Dakota Office of State Tax Commissioner to receive proper tax identification numbers and ensure timely filings. Consider integrating bookkeeping and tax automation tools to manage tax reporting and payments efficiently.