North Dakota House Bill HB1546

North Dakota 2025-2026 Regular Session

• Introduced: 1/20/25
• Refer: 1/20/25
• Report DNP: 2/5/25

Caption

Use tax on contractors; and to provide an effective date.

Impact

If enacted, HB1546 will modify existing North Dakota tax law, particularly enhancing the provisions regarding contractor taxes. The most significant alteration is the introduction of a streamlined process aimed at exempting contractors' purchases from state sales and use tax, specifically when these acquisitions are intended for public property improvements. This legislation signifies an effort to support infrastructure development within the state by making it more economically viable for contractors to engage in public projects.

Summary

House Bill 1546 proposes a sales and use tax exemption for contractors, subcontractors, and builders purchasing materials for projects on behalf of the state of North Dakota. This bill aims to reduce the financial burden on contractors who are engaged in state projects by eliminating the sales tax applicable to tangible personal property used in such contracts. The proposed exemption is contingent upon the contractor obtaining a purchasing agent authorization letter from the state and an exemption certificate issued by the tax commissioner prior to acquiring the property.

Contention

Key points of contention surrounding HB1546 include concerns regarding the implications for local governments, as the exemption does not apply to taxes levied under home rule authority by municipalities. Critics may express worry that the bill will result in reduced revenue streams for local entities that depend on these taxes, thereby complicating budget management for cities and counties. Furthermore, discussions may arise regarding the feasibility of monitoring compliance with the new rules and determining which purchases qualify for the exemption.