A sales tax is imposed upon gross receipts of retailers from all retail sales, unless the sale is exempt from the provisions of the sales tax. Some major items exempted from the sales tax which are of interest to motor carriers include: sales, furnishing or service of freight transportation by a common carrier if title passes to the purchaser; motor vehicles which are subject to the state’s motor vehicle excise tax; leasing or renting of tangible personal property on which a state sales or use tax has been paid or is payable.
The use tax is imposed on the same categories of items as the sales tax. If a sales or use tax has already been paid in another jurisdiction on an item, North Dakota gives credit to the extent of payment provided that jurisdiction has a reciprocal credit policy.
In lieu of a sales tax, an excise tax is imposed on the purchase price of motor vehicles bought either in North Dakota or outside it and required to be registered for use on the highways of the state. The Motor Vehicle Registrar will not issue a license or title registration until evidence of payment of this tax is presented.
Some vehicles are exempt from the North Dakota Motor Vehicle Excise tax. Transfers of vehicles from lessors to lessees who have been in continuous possession of the transferred vehicle for at least one year are also exempt from the excise tax. This exemption applies, provided the North Dakota sales, use or excise tax was paid at the time the vehicle was originally titled/licensed.
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