Exemptions

Property Tax Exemption

Parameters
Any new or expanding business project may be granted a property tax exemption for up to five years. Two extensions are available:

  • Agricultural processors may be granted a partial or full exemption for up to five additional years.
  • A project located on property leased from a government entity qualifies for an exemption for up to five additional years upon annual application by the project operator.
    In addition to, or instead of, an exemption, local governments and any project operator may negotiate payments in lieu of property tax for a period of up to 20 years from the date project operations begin.

Qualifications
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.

A project is not eligible for an exemption if:

  • a tax exemption was received under tax increment financing, or
  • the governing body determines the exemption fosters unfair competition or endangers existing business.

Sales Tax Exemptions

Manufacturing 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.

The manufacturer must receive prior approval from the State Tax Commissioner to qualify for the exemption at the time of purchase. If prior approval is not received, the manufacturer must pay the tax and then apply to the State Tax Commissioner for a refund.

The exemption is not available to contractors. Manufacturers may apply for a refund of the appropriate portion of the tax actually paid by contractors on eligible machinery and equipment.

Income Tax Exemption

Qualifications

A new or expansion project in a primary sector business or tourism qualifies for an income tax exemption for up to five years. "Primary sector business" means an enterprise, which creates wealth by using knowledge or labor to add value to a product, process, or services. The exemption is limited to income earned form the qualifying project. The project operator must file a state income tax return even though an exemption is granted.

City Hall 103 10th Ave N PO Box 501 Carrington, ND 58421