North Dakota has a structured system of taxation that applies to corporations, S corporations, partnerships, LLCs, and LLPs operating in the state. Corporations must file income tax returns and are taxed based on net income, while S corporations and partnerships primarily file informational returns that pass income and deductions through to shareholders or partners. The system also covers franchise taxes, estimated tax payment requirements, extensions, and penalties for late filing or non-payment.
This blog explains the tax obligations for different types of entities in North Dakota, the applicable tax rates, forms to be used, deadlines, and the penalties and interest that can arise from non-compliance.
C Corporation & Franchise Tax
The following entities that are formed in North Dakota or conduct business in the state are generally required to file a North Dakota corporate income tax return:
- Corporations, including business trusts, associations, and joint-stock companies
- Cooperative corporations distributing net income through patronage dividends
- Insurance companies carrying out business activities not subject to a gross premiums tax
- Tax-exempt organizations with unrelated business taxable income
- Organizations anticipating IRS tax-exemption notification but not yet having received it
Corporate Income Tax Rates
North Dakota applies the following rates:
- 0 – 25,000 USD: 1.41%
- 25,000 – 50,000 USD: $352.50 plus 3.55% of the amount over $25,000
- Over 50,000 USD: $1,240 plus 4.31% of the amount over $50,000
These progressive rates ensure that corporations pay more as their income levels rise.
C corporations formed in or doing business in North Dakota must file a corporate income tax return. The tax rate is a flat 4.31% of net taxable income.
Filing requirements
- Due date: 15th day of the fourth month following the close of the tax year
- Form used: Form 40, North Dakota Corporation Income Tax Return
Extensions
North Dakota automatically accepts a federal extension for filing state taxes, which extends the deadline by one month. Corporations must attach a copy of Form 7004 (federal extension) to the state return.
If no federal extension is secured, corporations can request more time by filing Form 101, Application for Extension of Time to File, before the due date.
Estimated Tax Payment
Corporations must make estimated tax payments if:
- The corporation’s estimated state income tax liability exceeds $5,000, and
- The prior year’s state income tax liability also exceeded $5,000.
In such cases, payments must be made in four equal installments on prescribed dates. Corporations must use the Form 40-ES voucher for paper filing, though electronic payments do not require the voucher.
Estimated payments are due on the 15th day of the fourth, sixth, ninth, and first month of the following tax year.
Penalty and Interest
- Late filing: 5% of the net tax liability or $5 (whichever is greater) for the first month, plus 5% for each additional month, capped at 25%.
- Extension interest: 12% per year during the extension period, through the extended due date or until paid. After that, interest is 1% per month.
- Late payment: 5% of the unpaid tax due or $5, whichever is greater.
These rules encourage corporations to meet deadlines and settle obligations promptly.
S Corporation Tax
S corporations in North Dakota must file an informational return to report income, deductions, and other details. While there is no entity-level income tax, the information is passed through to shareholders, who then report it on their personal returns.
Filing details
- Due date: 15th day of the fourth month after the corporation’s tax year ends
- Form used: Form 60, S Corporation Income Tax Return
This requirement applies to corporations that:
- Are required to file Form 1120-S at the federal level, and
- Conduct business or earn gross income from sources within North Dakota.
Unlike C corporations, North Dakota does not require S corporations to make estimated payments. However, if tax is due, payments can be made online through ND TAP or via Form 60-ES for paper filing.
Penalty and Interest
- Failure to pay tax: 5% of unpaid tax or $5, whichever is greater
- Failure to file return: 5% of unpaid tax or $5 for the first month, plus 5% for each additional month, capped at 25%
- Interest: 1% per month (or part of a month) on unpaid tax, beginning after the due date or extended due date
Extension of Time to File
S corporations may extend their filing deadline in two ways:
- Automatic acceptance if a federal extension is obtained
- If no federal extension is filed, submit Form 101 to request a state extension
Importantly, extensions to file do not extend the deadline for payment of tax, which must still be made by the original due date.
Partnership LLP & LLC Tax
Partnerships, LLCs, and LLPs in North Dakota are generally required to file informational returns rather than pay tax at the entity level. Like S corporations, income and deductions pass through to individual partners, who then report them on their personal tax returns.
Filing requirements
- Due date: 15th day of the fourth month after the tax year ends
- Form used: Form 58, Partnership Income Tax Return
This applies to entities that:
- File Form 1065 at the federal level, and
- Conduct business or earn gross income in North Dakota.
A limited liability company classified as a partnership for federal purposes must also file Form 58 if it meets these conditions.
Extensions
- Automatic extension applies if a federal extension is obtained
- If not, file Form 101 for a North Dakota extension
As with other entities, extensions apply only to the filing deadline and not to payment obligations.
Penalty and Interest
The same rules for S corporations apply to partnerships, LLCs, and LLPs:
- 5% penalty for failure to pay or file
- Maximum penalty of 25%
- Interest at 1% per month on unpaid taxes
Conclusion
North Dakota’s tax structure covers a wide range of entities, ensuring compliance across corporations, S corporations, partnerships, LLCs, and LLPs. C corporations face direct taxation with clear progressive rates and must pay estimated taxes if liabilities exceed thresholds. S corporations and partnerships focus on informational filings, shifting the tax burden to individual shareholders or partners.
Across all entities, penalties and interest underscore the importance of timely compliance, while extensions provide additional time to file — but not to pay. By aligning its rules with federal requirements in many areas, North Dakota simplifies administration for taxpayers, though deadlines and penalties remain strict.
For businesses and individuals operating in the state, understanding these rules is critical to avoiding unnecessary penalties and staying compliant with North Dakota tax laws.
