North Dakota Enacts Economic Nexus Legislation, Pending Quill Decision

Effective Date: October 1, 2018

Threshold: Gross sales in excess of $100,000 *NOTE: North Dakota removed its 200 transactions threshold effective for tax years beginning after December 31, 2018.

Measurement Date: In the previous or current calendar year

Includable Transactions: Taxable sales; Marketplace sales excluded from the threshold for individual sellers

When You Need to Register Once You Exceed the Threshold: The following calendar year or 60 days after the threshold is met, whichever is earlier

North Dakota has enacted economic nexus legislation applicable to remote sellers. Sellers that do not have a physical presence in North Dakota will be required to collect and remit North Dakota sales or use tax if the seller meets either of the following criteria in the previous or current calendar year:

  • The seller’s gross sales from the sale of tangible personal property and other taxable items delivered in North Dakota exceed $100,000, or
  • The seller sold tangible personal property and other taxable items for delivery in North Dakota in 200 or more separate transactions.

The seller shall follow all applicable procedures and requirements of law as if the seller has a physical presence in North Dakota. Note that the legislation will become effective on the date the U.S. Supreme Court issues an opinion overturning Quill v. North Dakota, or otherwise confirming a state may constitutionally impose its sales or use tax upon an out-of-state seller in circumstances similar to those specified in the North Dakota legislation. (S.B. 2298, Laws 2017)

UPDATE: The state has released a bulletin regarding the effective date of this legislation. Affected sellers must comply with the legislation – the effective date appears to be 6/21/18 but the state will provide additional guidance.

UPDATE: The state has indicated they believe they can start enforcing their law as of 6/21/18 but they have not yet announced when they will require collection.

UPDATE: North Dakota has announced that sales tax collection will be required for remote sellers that exceed $100,000 in taxable sales or 200 transactions shipped to the state. If you exceed one of these thresholds, and you are not registered and collecting North Dakota sales tax, you will need to be registered and begin collecting on October 1, 2018 or 60 days after you meet the threshold, whichever is earlier. Read North Dakota’s full notice here.

UPDATE: On March 14, 2019, the North Dakota Governor signed S.B. 2191, which eliminated the 200 transaction sales tax economic nexus threshold, leaving only the $100,000 threshold, effective for tax years beginning after December 31, 2018.

To find more information for remote sellers following the Wayfair decision, visit our Remote Seller Resources page.

Posted on June 22, 2018