Pembina County, ND

Pembina County, ND: Development

 

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Tax Incentives

The state of North Dakota offers a number of tax exemptions and tax incentives that can benefit new and existing businesses in Pembina County.

Property Tax Exemptions   Any new or expanding business project may be granted a property tax exemption for up to five years. To qualify, a project must be a new or expanded revenue-producing enterprise. All buildings, structures or improvements used in, or necessary to, the operation of the project qualify. The structure might be the project’s buildings or the project’s quarters within a larger building. Land does not qualify for an exemption. The project operator applies to the city governing body if the project is located within city boundaries or the county commission if the project is located outside city boundaries.

Income Tax Exemptions   A primary sector or tourism business may qualify for an income tax exemption for up to five years. “Primary sector” refers to a business that adds value to a product, process, or service that produces new wealth in North Dakota. “Tourism” refers to a tourism-related business that is a destination attraction. Eligibility is limited to a new business or to an existing business that expands its operations in North Dakota.

Property Tax Reduction   A property tax reduction applies to a centrally assessed wind turbine electric generation unit with a nameplate generation capacity of 100 kilowatts or more. A centrally assessed wind turbine electric generation unit is a unit that produces electric power for public use.

Sales Tax Exemptions   

  • Agricultural Commodity Processing Plant Construction Materials - Construction materials used to construct an agricultural commodity processing facility are exempt from sales and use taxes.
  • Computer and Telecommunications Equipment - For primary sector businesses other than manufacturers and recyclers, a sales and use tax exemption is allowed for purchases of computer and telecommunications equipment. To qualify for exemption, the equipment must be an integral part of a new primary sector business or create an economic expansion of an existing business, and the primary sector business must be certified by the Department of Commerce Division of Economic Development and Finance. The exemption does not extend to the purchase of replacement equipment.
  • Electrical Generating Facilities--Coal-Powered - A sales and use tax exemption may be granted for purchasing building materials, production equipment and other tangible personal property used in the construction or expansion of coal-powered electrical generating facilities. To qualify, the facility must convert beneficiated coal or coal from its natural form into electrical power and have at least one single electrical generation unit with a capacity of 50,000 kilowatts or more.
  • Electrical Generating Facilities--Wind-Powered - A sales and use tax exemption is allowed for purchasing building materials, production equipment, and other tangible personal property used in the construction or expansion of wind-powered electrical generating facilities between July 2001 and January 2015. To be eligible, a facility must have at least one single electrical energy generation unit with a nameplate capacity of 100 kilowatts or more.
  • Electrical Generating Facilities--Other - A sales and use tax exemption may be granted for purchasing building materials, production equipment and other tangible personal property used in the construction or expansion of an electrical generating facility other than a coal- or wind-powered facility. To qualify, the facility must produce electricity for resale or for consumption in a business activity and have at least one single electrical generation unit with a capacity of 100 kilowatts or more.
  • Gas Processing Facilities - A sales and use tax exemption may be granted for purchasing building materials, equipment, and other tangible personal property used in the expansion or construction of a gas processing facility. Also, tangible personal property used to construct or expand a system to compress, process, or gather gas recovered from an oil or gas well in North Dakota may qualify for an exemption. In addition, purchases of machinery, equipment, and related facilities for environmental upgrades that exceed $100,000 and that reduce emissions, increase efficiency, or enhance reliability of equipment may also qualify for an exemption.
  • Manufacturing, Agricultural, or Recycling Equipment - A new or expanding plant may exempt machinery or equipment from sales and use taxes if it is used primarily for manufacturing or agricultural processing, or used solely for recycling. The expansion must increase production volume, employment, or the types of products that can be manufactured or processed.
  • Oil Refineries - A sales and use tax exemption may be granted for building materials, equipment, and other tangible personal property used to expand or construct an oil refinery in North Dakota. To qualify, the facility must have a nameplate capacity of processing at least 5,000 barrels of oil per day. In addition, purchases for environmental upgrades that exceed $100,000 and that reduce emissions, increase efficiency, or enhance reliability of equipment may also qualify for an exemption.
  • Telecommunications Infrastructure - A sales and use tax exemption may be granted from July 2009 through June 2011 for purchasing tangible personal property used to construct or expand telecommunications service infrastructure within the state. To qualify, the property must be incorporated into a telecommunications service infrastructure owned by a telecommunications company.
  • Biodiesel Equipment - The sale of equipment not installed by the seller to a facility licensed under [N.D.C.C. § 57-43.2-05] to enable the facility to sell diesel fuel containing at least 2% biodiesel fuel by volume is exempt from sales tax.
  • Carbon Dioxide for Enhanced Oil and Gas Recovery - The sale of carbon dioxide to be used for enhanced recovery of oil or natural gas is exempt from sales and use tax.
  • Hydrogen Generation Facility - Sales of hydrogen used to power an internal combustion engine or fuel cell are exempt from sales tax. Equipment used directly and exclusively in the production and storage of this hydrogen by a hydrogen generation facility is also exempt from sales tax.

Income Tax Incentives

  • Agricultural Commodity Processing Facility Investment Tax Credit - An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for investing in an agricultural commodity processing facility in North Dakota certified by the Department of Commerce Division of Economic Development and Finance. An agricultural commodity processing facility includes a livestock feeding, handling, milking, or holding operation that uses as part of its operation a by-product produced at a bio-fuels production facility.
  • Angel Fund Investment Credit - An individual, estate, trust, or corporation is allowed an income tax credit for investing in an angel fund in North Dakota certified by the Department of Commerce Division of Economic Development and Finance.
  • Tax Credits for Producing or Blending Biodiesel and for Crushing Soybeans or Canola - A corporation is allowed an income tax credit for adapting or adding equipment to retrofit a facility or to construct a new facility in North Dakota that either (1) produces or blends biodiesel fuel or (2) crushes soybeans or canola. The credit is equal to 10% of the direct costs incurred, and is allowed in each of five tax years, starting with the tax year in which the production, blending, or crushing begins. An unused credit may be carried forward up to five tax years. A corporation is allowed no more than $250,000 of credits for all tax years.
  • Biomass, Geothermal, Solar, or Wind Energy Credit - A corporation is allowed an income tax credit for installing a biomass, geothermal, solar, or wind energy device in a building or on property owned or leased in North Dakota. The credit is equal to 3% of the cost of acquisition and installation and is allowed in each of the first five tax years, starting with the year in which installation is completed. A credit allowed to a corporation included in a consolidated North Dakota income tax return may be used to reduce the aggregate tax liability of all corporations included in the return. If a corporation holds an interest in a partnership (or a limited liability company treated like a partnership) that installs a device, the credit is passed through to the corporation in proportion to its interest in the entity.An individual, estate, or trust is allowed an income tax credit for installing a geothermal energy device in a building or on property owned or leased in North Dakota. To qualify, the device must be installed after December 31, 2008. The credit is equal to 3% of the cost of acquisition and installation and is allowed in each of the first five tax years starting with the year in which installation is completed. If an individual, estate, or trust holds an interest in a pass through entity, such as a partnership or S corporation, that installs a geothermal energy device, the credit is passed through to the individual, estate, or trust in proportion to its interest in the entity.
  • Certified Nonprofit Development Corporation Investment Credit - A corporation is allowed an income tax credit for buying membership in, paying dues to, or contributing to a certified nonprofit development corporation. The credit is equal to 25% of the qualifying payments, up to a maximum credit of $2,000. An unused credit may be carried forward up to seven tax years.
  • Internship Employment Credit - An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for employing an individual under an internship program located in North Dakota. The credit is equal to 10% of the compensation paid to the intern. This credit is allowed for up to five interns employed at the same time. An employer is allowed no more than $3,000 of credits for all tax years.
  • Microbusiness Investment and Employment Credit - An income tax credit is allowed to an individual, estate, trust, partnership, corporation, or limited liability company certified as a microbusiness by the Department of Commerce Division of Economic Development and Finance. A microbusiness is a business with up to five employees located in a community with a population under 2,000 that is actively involved in economic development.
  • Research Expense Credit - An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for conducting research in North Dakota. The credit is equal to a percentage of the excess of qualified research expenses in North Dakota over the base amount in North Dakota.
  • Seed Capital Investment Credit - An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for investing in a business certified by the Department of Commerce Division of Economic Development and Finance.
  • Wage and Salary Credit - A corporation doing business in North Dakota for the first time is allowed an income tax credit equal to 1% of wages and salaries paid during the tax year for each of the first three tax years of operation and ½% of wages and salaries paid during the tax year for the fourth and fifth tax years.
  • Workforce Recruitment Credit - An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for employing extraordinary recruitment methods to recruit and hire employees for hard-to-fill positions in North Dakota. The credit is equal to 5% of the compensation paid during the first 12 consecutive months to an employee hired to fill a hard-to-fill employment position, and is allowed in the first tax year following the tax year in which the employee completes the 12 consecutive month employment period. An unused credit may be carried forward up to four tax years. In the case of a pass through entity, such as a partnership or S corporation, the credit is passed through to its owners in proportion to their ownership interests.

Job Training Assistance   A program is available that assists a new or expanding primary sector business with training new employees. The cost of the training under the program is paid for in whole or in part with the income tax withheld from the new employees. For more information about this program, contact Job Service North Dakota.

Work Opportunity Tax Credit   WOTC is a federally funded program designed to encourage employers in the private sector to hire qualified job seekers (from nine target groups) who face barriers to gainful employment. The Small Business and Work Opportunity Tax Act of 2007 extended this program through August 31, 2011.

Renaissance Zone  Businesses and individuals may qualify for one or more tax incentives for purchasing, leasing, or making improvements to real property located in a North Dakota renaissance zone. A renaissance zone is a designated area within a city that is approved by the Department of Commerce Division of Community Services. The tax incentives consist of a variety of state income and financial institution tax exemptions and credits, and local property tax exemptions.