North Dakota 2025-2026 Regular Session

North Dakota House Bill HB1546 Compare Versions

Only one version of the bill is available at this time.

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1	1	25.1272.01000
2	2	Sixty-ninth
3	3	Legislative Assembly
4	4	of North Dakota
5	5	Introduced by
6	6	Representatives Berg, B. Anderson, Heinert, Meier, Pyle, Swiontek, Wagner, Weisz
7	7	Senator Sorvaag
8	8	A BILL for an Act to create and enact a new section to chapter 57-39.2 of the North Dakota
9	9	Century Code, relating to a sales and use tax exemption for purchases made by a contractor,
10	10	subcontractor, or builder on behalf of the state of North Dakota; to amend and reenact section
11	11	57-40.2-03.3 of the North Dakota Century Code, relating to use tax on contractors; and to
12	12	provide an effective date.
13	13	BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
14	14	SECTION 1. A new section to chapter 57-39.2 of the North Dakota Century Code is created
15	15	and enacted as follows:
16	16	Exemption for materials acquired by a contractor on behalf of the state.
17	17	1.A contractor licensed under chapter 43 - 07 which acquires tangible personal property
18	18	for use in the performance of a contract with the state of North Dakota, including a
19	19	department or agency of the state, is entitled to a sales and use tax exemption from
20	20	the state tax imposed under chapters 57 - 39.2 and 57 - 40.2 for the acquisition of those
21	21	items of tangible personal property. To qualify for the exemption under this section, the
22	22	contractor shall hold a valid sales tax permit under this chapter, obtain a purchasing
23	23	agent authorization letter from the state, and obtain a copy of the exemption certificate
24	24	issued to the state by the tax commissioner before purchasing the tangible personal
25	25	property.
26	26	2.If the contractor also is a retailer transacting retail sales of tangible personal property,
27	27	the exemption under this section applies to tangible personal property withdrawn from
28	28	inventory for use in a contract with the state if the contractor obtains from the state a
29	29	purchasing agent authorization letter and a copy of the exemption certificate issued to
30	30	the state by the commissioner before withdrawing the tangible personal property from
31	31	inventory.
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33	33	HOUSE BILL NO. 1546
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59	59	Legislative Assembly
60	60	3.The exemption under this section applies only to the extent the tangible personal
61	61	property becomes part of the improvement to real property in the performance of the
62	62	contract with the state and the state owns the real property and the property
63	63	improvements.
64	64	4.Notwithstanding any other provision of law, the exemption under this section does not
65	65	apply to a sales or use tax imposed under home rule authority by a city or county.
66	66	SECTION 2. AMENDMENT. Section 57-40.2-03.3 of the North Dakota Century Code is
67	67	amended and reenacted as follows:
68	68	57-40.2-03.3. Use tax on contractors. (Effective through June 30, 2025)
69	69	1.When a contractor or subcontractor uses tangible personal property in the
70	70	performance of that person's contract, or to fulfill contract or subcontract obligations,
71	71	whether the title to the property be in the contractor, subcontractor, contractee,
72	72	subcontractee, or any other person, or whether the titleholder of the property would be
73	73	subject to pay the sales or use tax, the contractor or subcontractor shall pay a use tax
74	74	at the rate prescribed by section 57-40.2-02.1 measured by the purchase price or fair
75	75	market value of such property, whichever is greater, unless the property has been
76	76	previously subjected to a sales tax or use tax by this state, and the tax due has been
77	77	paid. This section does not apply to a contractor or subcontractor that does not enter a
78	78	contract for the purchase of the tangible personal property.
79	79	2.The provisions of this chapter pertaining to the administration of the tax imposed by
80	80	section 57-40.2-02.1, not in conflict with the provisions of this section, govern the
81	81	administration of the tax levied by this section.
82	82	3.The tax imposed by this section does not apply to:
83	83	a.Production equipment or tangible personal property as authorized or approved
84	84	for exemption by the tax commissioner under section 57-39.2-04.2.
85	85	b.Machinery, equipment, or other tangible personal property used to construct an
86	86	agricultural commodity processing facility as authorized or approved for
87	87	exemption by the tax commissioner under section 57-39.2-04.3 or 57-39.2-04.4.
88	88	c.Tangible personal property used to construct or expand a system used to
89	89	compress, process, gather, or refine gas recovered from an oil or gas well in this
90	90	state or used to expand or build a gas-processing facility in this state as
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124	124	authorized or approved for exemption by the tax commissioner under section
125	125	57-39.2-04.5.
126	126	d.Tangible personal property used to construct or expand a qualifying oil refinery as
127	127	authorized or approved for exemption by the tax commissioner under section
128	128	57-39.2-04.6.
129	129	e.Tangible personal property used to construct or expand a qualifying facility as
130	130	authorized or approved for exemption by the tax commissioner under section
131	131	57-39.2-04.10.
132	132	f.Tangible personal property used to construct or expand a qualifying facility as
133	133	authorized or approved for exemption by the tax commissioner under section
134	134	57-39.2-04.11.
135	135	g.Materials used in compressing, gathering, collecting, storing, transporting, or
136	136	injecting carbon dioxide for use in enhanced recovery of oil or natural gas as
137	137	provided in section 57-39.2-04.14.
138	138	h.Tangible personal property used to construct a qualifying fertilizer or chemical
139	139	processing facility as authorized or approved for exemption by the tax
140	140	commissioner under section 57-39.2-04.15.
141	141	i.Tangible personal property used to construct a qualified straddle plant, a qualified
142	142	fractionator, or qualified associated infrastructure as authorized or approved for
143	143	exemption by the tax commissioner under section 57-39.2-04.16.
144	144	j.Tangible personal property as authorized or approved for exemption by the
145	145	tax commissioner as provided in section 57-39.2-04.21.
146	146	k.Tangible personal property as authorized or approved for exemption by the
147	147	tax commissioner as provided in section 57-39.2-04.20.
148	148	l.Raw materials, single-use product contact systems, and reagents used for
149	149	biologic manufacturing as authorized or approved for exemption by the
150	150	tax commissioner under section 57-39.2-04.19.
151	151	m.Tangible personal property used to construct, expand, or upgrade a facility that
152	152	refines renewable feedstock into sustainable aviation fuel as authorized or
153	153	approved by the tax commissioner under section 57-39.2-04.18.
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186	186	Use tax on contractors. (Effective after June 30, 2025, and through June 30, 2029)
187	187	1.When a contractor or subcontractor uses tangible personal property in the
188	188	performance of that person's contract, or to fulfill contract or subcontract obligations,
189	189	whether the title to the property be in the contractor, subcontractor, contractee,
190	190	subcontractee, or any other person, or whether the titleholder of the property would be
191	191	subject to pay the sales or use tax, the contractor or subcontractor shall pay a use tax
192	192	at the rate prescribed by section 57-40.2-02.1 measured by the purchase price or fair
193	193	market value of such property, whichever is greater, unless the property has been
194	194	previously subjected to a sales tax or use tax by this state, and the tax due has been
195	195	paid. This section does not apply to a contractor or subcontractor that does not enter a
196	196	contract for the purchase of the tangible personal property.
197	197	2.The provisions of this chapter pertaining to the administration of the tax imposed by
198	198	section 57-40.2-02.1, not in conflict with the provisions of this section, govern the
199	199	administration of the tax levied by this section.
200	200	3.The tax imposed by this section does not apply to:
201	201	a.Production equipment or tangible personal property as authorized or approved
202	202	for exemption by the tax commissioner under section 57-39.2-04.2;
203	203	b.Machinery, equipment, or other tangible personal property used to construct an
204	204	agricultural commodity processing facility as authorized or approved for
205	205	exemption by the tax commissioner under section 57-39.2-04.3 or 57-39.2-04.4;
206	206	c.Tangible personal property used to construct or expand a system used to
207	207	compress, process, gather, or refine gas recovered from an oil or gas well in this
208	208	state or used to expand or build a gas-processing facility in this state as
209	209	authorized or approved for exemption by the tax commissioner under section
210	210	57-39.2-04.5;
211	211	d.Tangible personal property used to construct or expand a qualifying oil refinery as
212	212	authorized or approved for exemption by the tax commissioner under section
213	213	57-39.2-04.6;
214	214	e.Tangible personal property used to construct or expand a qualifying facility as
215	215	authorized or approved for exemption by the tax commissioner under section
216	216	57-39.2-04.10;
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250	250	f.Tangible personal property used to construct or expand a qualifying facility as
251	251	authorized or approved for exemption by the tax commissioner under section
252	252	57-39.2-04.11;
253	253	g.Materials used in compressing, gathering, collecting, storing, transporting, or
254	254	injecting carbon dioxide for use in enhanced recovery of oil or natural gas as
255	255	provided in section 57-39.2-04.14;
256	256	h.Tangible personal property used to construct a qualifying fertilizer or chemical
257	257	processing facility as authorized or approved for exemption by the tax
258	258	commissioner under section 57-39.2-04.15; or
259	259	i.Tangible personal property used to construct a qualified straddle plant, a qualified
260	260	fractionator, or qualified associated infrastructure as authorized or approved for
261	261	exemption by the tax commissioner under section 57-39.2-04.16.
262	262	j.Tangible personal property as authorized or approved for exemption by the
263	263	tax commissioner as provided in section 57-39.2-04.21.
264	264	k.Tangible personal property as authorized or approved for exemption by the
265	265	tax commissioner as provided in section 57-39.2-04.20.
266	266	l.Raw materials, single-use product contact systems, and reagents used for
267	267	biologic manufacturing as authorized or approved for exemption by the
268	268	tax commissioner under section 57-39.2-04.19.
269	269	m.Tangible personal property purchased by the state of North Dakota, including a
270	270	department or agency of the state, or by a contractor under section 1 of this Act,
271	271	and which is subsequently installed by a contractor licensed under chapter 43 - 07.
272	272	The exemption under this subdivision applies only to the state tax imposed under
273	273	this chapter and to the extent the tangible personal property becomes part of the
274	274	improvement to real property in the performance of the contract with the state
275	275	and the state owns the real property and the property improvements.
276	276	Use tax on contractors. (Effective after June 30, 2029)
277	277	1.When a contractor or subcontractor uses tangible personal property in the
278	278	performance of that person's contract, or to fulfill contract or subcontract obligations,
279	279	whether the title to the property be in the contractor, subcontractor, contractee,
280	280	subcontractee, or any other person, or whether the titleholder of the property would be
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314	314	subject to pay the sales or use tax, the contractor or subcontractor shall pay a use tax
315	315	at the rate prescribed by section 57-40.2-02.1 measured by the purchase price or fair
316	316	market value of such property, whichever is greater, unless the property has been
317	317	previously subjected to a sales tax or use tax by this state, and the tax due has been
318	318	paid. This section does not apply to a contractor or subcontractor that does not enter a
319	319	contract for the purchase of the tangible personal property.
320	320	2.The provisions of this chapter pertaining to the administration of the tax imposed by
321	321	section 57-40.2-02.1, not in conflict with the provisions of this section, govern the
322	322	administration of the tax levied by this section.
323	323	3.The tax imposed by this section does not apply to:
324	324	a.Production equipment or tangible personal property as authorized or approved
325	325	for exemption by the tax commissioner under section 57-39.2-04.2;
326	326	b.Machinery, equipment, or other tangible personal property used to construct an
327	327	agricultural commodity processing facility as authorized or approved for
328	328	exemption by the tax commissioner under section 57-39.2-04.3 or 57-39.2-04.4;
329	329	c.Tangible personal property used to construct or expand a system used to
330	330	compress, process, gather, or refine gas recovered from an oil or gas well in this
331	331	state or used to expand or build a gas-processing facility in this state as
332	332	authorized or approved for exemption by the tax commissioner under section
333	333	57-39.2-04.5;
334	334	d.Tangible personal property used to construct or expand a qualifying oil refinery as
335	335	authorized or approved for exemption by the tax commissioner under section
336	336	57-39.2-04.6;
337	337	e.Tangible personal property used to construct or expand a qualifying facility as
338	338	authorized or approved for exemption by the tax commissioner under section
339	339	57-39.2-04.10;
340	340	f.Tangible personal property used to construct or expand a qualifying facility as
341	341	authorized or approved for exemption by the tax commissioner under section
342	342	57-39.2-04.11;
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374	374	g.Materials used in compressing, gathering, collecting, storing, transporting, or
375	375	injecting carbon dioxide for use in enhanced recovery of oil or natural gas as
376	376	provided in section 57-39.2-04.14;
377	377	h.Tangible personal property used to construct a qualifying fertilizer or chemical
378	378	processing facility as authorized or approved for exemption by the tax
379	379	commissioner under section 57-39.2-04.15; or
380	380	i.Tangible personal property used to construct a qualified straddle plant, a qualified
381	381	fractionator, or qualified associated infrastructure as authorized or approved for
382	382	exemption by the tax commissioner under section 57-39.2-04.16.
383	383	j.Tangible personal property as authorized or approved for exemption by the
384	384	tax commissioner as provided in section 57-39.2-04.21.
385	385	k.Tangible personal property as authorized or approved for exemption by the
386	386	tax commissioner as provided in section 57-39.2-04.20.
387	387	l.Tangible personal property purchased by the state of North Dakota, including a
388	388	department or agency of the state, or by a contractor under section 1 of this Act,
389	389	and which is subsequently installed by a contractor licensed under chapter 43 - 07.
390	390	The exemption under this subdivision applies only to the state tax imposed under
391	391	this chapter and to the extent the tangible personal property becomes part of the
392	392	improvement to real property in the performance of the contract with the state
393	393	and the state owns the real property and the property improvements.
394	394	SECTION 3. EFFECTIVE DATE. This Act is effective for taxable events occurring after
395	395	June 30, 2025.
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