Did you say ‘North Pole’? No, no, no “North Dakota”, just slighty south of the pole even though during mid-winter you might not think so. (In reality North Dakota is almost midway between the North Pole and the Equator.) It just happens that the average daily ‘high temperature’ during January is 21 degrees across the state with an average ‘low temperature’ of 2 degrees. North Dakota was admitted to the Union on November 2, 1989 making it the 39th state in the United States.
Bismarck, North Dakota is the capital of the state which is ranked 47th within the US by population with 739,500 residents occupying 70,700 square miles of territory; however, Fargo is the state’s largest city with approximately 1/7th the total state population.
During the late 1800’s, Fargo was named for the founder of the Wells Fargo company. The city was a stopping off point for steamboats travelling the Red River where river traffic could connect with the Northern Pacific Railway. By the way, Amtrak still runs a passenger line through North Dakota called the ‘Empire Builder’, the same name as run by the Great Northern Railway in the 1800s; you can jump on the train and travel east to Chicago, or west to either Seattle or Portland.
Despite the frigid winters, North Dakota has always been, and continues to be an ‘agriculture state’; in its early history ‘fur trading’ was a major source of expansion into the state, but today almost 90% of the total territory represents farmland. Less than 10% of the state’s population is involved in agriculture but the state is ranked 18th in total agricultural production within the US.
As you might expect, due to the cold winters, crops must be hearty; therefore, the largest production are cereal grains such as barley and durum (hard red winter) wheat, and oats as well as buckwheat. While some corn is grown, it is mainly limited to the southeast part of the state.
Another primary economic resource is ‘oil’, and no I am not yet talking about the stuff you pump out of the ground; I am talking about ‘oil’ that comes from ‘seeds’ like canola, flax, sunflowers, safflower seeds and mustard seed. Soybeans are another seed plan that plays an important part of the agricultural resources of North Dakota. But ‘seed-oil’ is not the only oil that can today be associated with North Dakota, modern oil extraction has brought more than one boom to the state and is presently a major contributor to the state’s economy. Oil and shale gas deposits are generating crude as a result of the modern practice known as ‘fracking’.
In past years lignite coal was mined and used to generate electrical power, but today higher grade coal reserves from other locations have become the ‘coal of choice’ (although coal use is on the decline due to environmental regulation). But even the demise of coal from North Dakota’s economy and new form of energy abounds, ‘wind’. As with many areas in the Great Plains of the US, North Dakota is seeing wind turbines pop up like ‘sunflowers’ in the plains, generating thousands of kilowatts of clean energy in lieu of ‘that dirty old coal.’
North Dakota Factoids:
- This month (November 2, 2015) marks the 126th anniversary of North Dakota’s statehood.
- Rugby, North Dakota is the geographic center of North America.
- Unsuccessfully tried to drop “North” from its name in 1947. Two similar attempts in 1989 also failed.
- Grows more sunflowers and produces more honey than any other state.
- Famous folks who hail from North Dakota include musician Lawrence Welk, novelist Louis L’amour, singer Peggy Lee, and actress Angie Dickinson.
- While tornadoes are common, North Dakota is the only U.S. state to have never had an earthquake.
- Has more registered vehicles and cows than people.
- Theodore Roosevelt National Park in North Dakota is the only national park to be named after a person.
- Has the lowest unemployment rate in the U.S. (2.5%)
- The highest (121 degrees) and lowest (minus 60 degrees) temperatures on record for North Dakota occurred the same year, 1936, on July 6 and February 15 respectively.
About Sales Tax and this Series:
Thanks to Avalara, the 'tax people', this article is one in a 50 part series covering sales tax issues associated with each and every state tax jurisdiction in the United States. We have been publishing a "Sales Tax Tuesday" article every week this year.
Sales tax provides critical revenue for states as well as many counties and cities. Other than property and income tax, sales tax is the largest source of tax revenue in the majority of the 46 states that collect it. From a government perspective, making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is an exercise for income. It’s easy to be lured into a false sense of compliance when it comes to sales tax, this series is intended to insure that you are aware of the key sales tax facts for YOUR state.
Note: For sales tax definitions and essentials check out the opening article to this series.
Sales Tax Facts:
- The state sales tax rate is 5%, but can be as high as 8% with local taxes. North Dakota assesses city and county tax, but does not assess local tax for special jurisdictional areas such as school districts or transportation authorities.
- North Dakota imposes a sales tax on the retail sale or lease of tangible personal property. Communications services, admission fees, and accommodations (30 days or less) are also subject to sales tax.
- A higher (7%) sales tax rate is charged on alcoholic beverages and a lower (3%) rate is charged on the retail sales of new farm equipment, irrigation equipment and mobile homes.
- The state does NOT offer any sales tax holidays.
- North Dakota is a destination sourcing state. This means that sales tax is based on the location of the buyer, not the seller.
- North Dakota is a Streamlined Sales Tax (SST) member state.
- The state allows local jurisdictions to impose a maximum cap on sales and use tax paid on a single transaction. For example, in Hillsboro the maximum tax cap is $50 per sale, while in Ward County, it is $12.50 per sale. Prior to 2005, retailers in cities and counties with caps would apply the cap exemption at checkout. But a law change now requires customers to request a refund from the Tax Commissioner on local tax paid in excess of the caps.
- North Dakota’s Governor recently approved a new sales and use tax exemption for materials used to construct a fertilizer or chemical processing facility.
Did You Know?
Keeping it casual. North Dakota laws says that occasional or “casual sales” by an individual are not subject to sales tax. But the informal nature of the rule caused trouble for one collector whose 400 sales in a six-year period caught the eye of the North Dakota Tax Commission. The seller claimed to be a “pack rat” not a business, and was just selling off stuff he collected over the years for extra money. The state didn’t necessarily agree and the ruling (still pending) could hinge on intent: did the seller acquire the items with the intent to sell or re-trade. If that’s the case, they’re taxable sales.
Manual sales and use tax management is prone to error and consumes staff time in pass-through rather than revenue-generating activities. Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting. Automation via AvaTax allows businesses to be fully sales tax compliant without sacrificing productivity.