North Dakota Tax Guide
Explore North Dakota's state tax rates for income, sales, property, retirement, and more. Learn how North Dakota compares nationwide.
Navigating the complexities of state taxes can be daunting, but understanding North Dakota's tax landscape is essential for residents and newcomers alike.
In this guide, we'll explore key components of The Peace Garden State's tax system, from income and sales taxes to property taxes and retirement benefits.
North Dakota state tax: Overview
North Dakota does have a state income tax, but the rate is lower than in many other states, which can be a welcome break for residents. The state also keeps alcohol and tobacco taxes on the low side, which helps keep certain costs in check.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Property tax rates are about average, so homeowners are unlikely to face major surprises there.
Combined with the relatively low income tax, these factors can make North Dakota’s overall tax burden feel a bit lighter than in many other parts of the country.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
North Dakota income tax
North Dakota has a graduated state individual income tax rate ranging from 1.95 percent to 2.50 percent.
North Dakota retirement taxes
North Dakota tax on retirement benefits: North Dakota doesn't tax Social Security retirement benefits.
The state doesn't tax Military pensions or Railroad Retirement benefits, either.
- Tax on Taxable Income: Low of 0% (on up to $47,150 for single filers and $78,775 for joint filers) and a high of 2.5% (on more than $238,200 for single filers and $289,975 for joint filers)
- Social Security: Not taxable
- Pensions: Taxable (Excluding military retirement pay)
- 401(k) and IRA Distributions: Taxable
North Dakota sales tax
North Dakota's statewide sales tax is 5%. Localities can add up to 2.05%, but the average combined sales tax rate is 7.05%, according to the Tax Foundation.
- Groceries: Exempt
- Prescription drugs: Taxable
- Clothing: Taxable
How much are property taxes in North Dakota?
In North Dakota, the average effective property tax rate is 0.94%, which is reasonable when compared to property taxes in many other states.
North Dakota Property Tax Breaks for Retirees
North Dakota Homestead Tax Credit or Renter's Refund: Some state residents can receive a property tax credit or a partial refund of rent they pay. The homestead tax credit could reduce a property's taxable value by up to $9,000. Renter's refunds are worth up to $400. Homeowners and renters must meet one of the following criteria to qualify.
- Be 65 or older
- Have a permanent or total disability
North Dakota gas tax
Gasoline | $0.23 per gallon |
Diesel | $0.23 per gallon |
Source: Sales Tax Handbook
North Dakota alcohol and tobacco taxes
Product | Tax Amount |
|---|---|
Cigarettes | $0.44 per pack |
Chew Tobacco and Snuff | $0.16-$0.60 per ounce |
Cigars and Tobacco | 28% of wholesale price |
Medical Marijuana | 5% |
Source: Sales Tax Handbook
Product | Tax Amount |
|---|---|
Wine | $0.50 per gallon |
Beer | $0.16 per gallon |
Liquor | $2.50 per gallon |
Source: Sales Tax Handbook
Note: Alcohol in North Dakota is also subject to a 7% sales tax.
North Dakota estate and inheritance taxes
North Dakota is one of the many states with no estate or inheritance taxes.
Related Content
-
S&P 500 Hits New High Before Big Tech Earnings, Fed: Stock Market TodayThe tech-heavy Nasdaq also shone in Tuesday's session, while UnitedHealth dragged on the blue-chip Dow Jones Industrial Average.
-
4% and Chill? Find Out If This Distribution Rule Fits Your RetirementTake this simple quiz to discover whether the 4% Rule will work for you in retirement.
-
Oregon Tax Kicker in 2026: What's Your Refund?State Tax The Oregon kicker for 2025 state income taxes is coming. Here's how to calculate your credit and the eligibility rules.
-
Oregon Tax Kicker in 2026: What's Your Refund?
State Tax The Oregon kicker for 2025 state income taxes is coming. Here's how to calculate your credit and the eligibility rules.
-
Will IRS Budget Cuts Disrupt Tax Season? What You Need to KnowTaxes The 2026 tax season could be an unprecedented one for the IRS. Here’s how you can be proactive to keep up with the status of your return.
-
3 Retirement Changes to Watch in 2026: Tax EditionRetirement Taxes Between the Social Security "senior bonus" phaseout and changes to Roth tax rules, your 2026 retirement plan may need an update. Here's what to know.
-
Tax Season 2026 Is Open: 8 Big Tax Changes to Know Before You FileTax Season Due to several major tax rule changes, your 2025 return might feel unfamiliar even if your income looks the same.
-
Do You Pay Property Taxes in Tennessee? What You Need to Know in 2026Property Taxes State lawmakers are moving to ban state property taxes, but can they stop the local rate spike? Here's how 2026 could lower your Tennessee property tax bill.
-
12 Tax Strategies Every Self-Employed Worker Needs in 2026Your Business Navigating the seas of self-employment can be rough. We've got answers to common questions so you can have smoother sailing.
-
New California Wealth Tax for 2026? Here's What's Happening NowState Taxes California has considered taxing wealth before, but the latest proposal seems to be different.
-
A Free Tax Filing Option Has Disappeared for 2026: Here's What That Means for YouTax Filing Tax season officially opens on January 26. But you'll have one less way to submit your tax return for free. Here's what you need to know.
