Category: North Dakota

North Dakota Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in North Dakota, and their state economic development professionals gave us some details (North Dakota incentives site click here).
For starters — CNBC ranked North Dakota #12 in their 2016 America’s Top States for Business survey (Georgia was #8 in the same survey). In that same survey, however, North Dakota is ranked #29 for Cost of Doing Business.  They rely heavily on the oil and gas industry, as you probably already know.  Also, just a nit, but their economic development web site is the worst I have seen so far.  One can barely make heads or tails out of it!
Financing and Other Incentives include:
  • Five-year corporate income tax exemption for new or expanding primary sector business
  • Investment tax credits for business investors
  • Sales and use tax exemptions on manufacturing/computer/telecommunication equipment
  • Utilities are not taxed in North Dakota
  • Up to five-year 100% property tax exemption
  • North Dakota Development Fund – gap financing loan and equity program
  • Research North Dakota – grant funds for conducting R&D in partnership with North Dakota universities
  • Workforce 2020 – grant program for training new technologies and processes
  • New Jobs Training Program – grant program reimbursing employee withholding taxes
Compared to Georgia, North Dakota has:
  • 4.31% corporate and 2.9% top personal income tax rates
  • Nearly the same combined state and local tax burden
  • A far narrower range of incentives
  • Pre-approval required for all incentives
To summarize, North Dakota doesn’t rely on income tax incentives very much, but perhaps they should consider doing so if they want to attract a wider variety of industries!