Form 21826 - Sales And Use Tax Requirements (Page 3 of 4) in pdf

On sales to out-of-state residents, retailers must be certain that their records contain proof of delivery, such as truck

records, bills of lading, statement by the customer, etc. These conditions apply to deliveries into any state or Canadian

province.

Delivery Charges Taxable

As a normal part of their business, many retailers are required to deliver the items they sell to the customer. If there is a

delivery charge to the customer, the sales tax must be charged on the total selling price, including any charges for delivery

or setup.

For example: A furniture retailer sells a bedroom set to a customer living in another city. The retailer agrees to deliver the

new bedroom set and set it up in the customer’s home for $25 over and above the agreed selling price of the furniture. The

$25 charge is subject to sales tax even if it is billed separately to the customer. The proper billing would be as follows:

New bedroom set ....................................... $600.00

Delivery charge .............................................. 25.00

Less trade-in of used bedroom set ............. (100.00)

Total ........................................................... $525.00

5% tax .......................................................... $26.25

Sales to Nonprofit Organizations Are Taxable

The gross receipts from sales of tangible personal property to nonprofit organizations for their own use are subject to sales

tax. Such organizations include Boy Scouts, Girl Scouts, F.F.A., Chambers of Commerce, Lions Clubs and other civic

organizations, as well as churches and religious groups.

Sales to Residents of Montana

North Dakota sales tax law contains an exemption for residents of Montana from paying sales tax when purchasing

tangible personal property within North Dakota. A resident of Montana can take delivery of tangible personal property in

North Dakota and can purchase this property without paying the North Dakota sales tax provided the following conditions

are met:

1. The sale is in excess of $50.00.

2. The personal property will be taken out of the state of North Dakota and used exclusively outside this state.

3. The resident of Montana is in North Dakota to make a specific purchase and not as a tourist.

4. The resident of Montana must sign a certificate of purchase form certifying Montana residency and that the

goods will be used outside of North Dakota.

The prescribed certificate of purchase for use in making sales to Montana residents may be obtained from the Office of

State Tax Commissioner or from our website.

Goods purchased by Montana residents must be taken from North Dakota and used entirely outside this state in order to

qualify for the exemption. Accordingly, tax must be paid on lodging accommodations, meals, entertainment and similar

goods and services which are consumed in this state.

Sales to Canadian Residents

Sales to residents of Canada are not exempt from North Dakota sales tax, however, in some cases the Canadian buyer may

obtain a refund of North Dakota sales tax paid.

The refund is available under the following conditions:

1. The Canadian resident must be in North Dakota to make a purchase and not as a tourist or temporary resident.

2. The goods must be removed from North Dakota within 30 days of purchase and permanently used outside of

North Dakota.

3. The Canadian resident must apply for a refund to the Tax Commissioner on a form prescribed by the Tax

Commissioner. Refund forms may be obtained from the Tax Commissioner’s office or from our web site.

4. The qualifying purchases (each invoice) must equal or exceed $25.00 before sales tax.

5. The refund must be $15.00 or more. To reach the $15.00 limit, qualifying purchases may be accumulated for

a period not to exceed one calendar year.

Goods purchased by Canadian residents must be taken out of North Dakota and used entirely outside this state in order for

the refund to be allowed. Accordingly, tax paid on lodging accommodations, meals, entertainment, etc. is not subject to

refund since these purchases are used in North Dakota.

Form 21826 - Sales And Use Tax Requirements Page 3

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