Last updated January 13, 2022
North Dakota LLC Taxes
How to form an LLC in North Dakota
This Quick Start Guide is a brief overview of how to form an LLC in North Dakota.
North Dakota LLC costs:
LLC formation: $135 (one-time fee)
Annual report: $50 (every year)
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Note: Our tax lesson is not as step-by-step as our Forming an LLC in North Dakota lesson, due to the uniqueness and variation among businesses in North Dakota. Taxes are usually not as straightforward as forming an LLC in North Dakota, and therefore, the information below is an overview, and not a comprehensive guide.
You will most likely need to hire a tax professional in North Dakota to make sure you meet all your state and local tax obligations. We recommend using Thumbtack.
Do it yourself in North Dakota
North Dakota Tax Overview
ND Tax: New Businesses and Contractors
North Dakota Tax FAQs
North Dakota Taxpayer Access Point (TAP)
Under the “Resources” section, click “View Frequently Asked Questions” to access the FAQ menu.
Registering for North Dakota Taxes Online
North Dakota TAP
Under the “Businesses” section, click “Apply for a Sales and Use or Witholding Account”. Then click “Electronic Application” and follow the onscreen instructions.
North Dakota Office of State Tax Commissioner Contact Info
ND Tax: Contact Us
Depending on your industry, where your North Dakota LLC is located, how you are taxed by the IRS, and whether or not you have employees, will determine which additional taxes and forms are due.
Some examples of other taxes and forms due are:
- Sales and use tax
- Employer’s withholding tax
- Tobacco tax
- Property tax
- Alcohol tax
- Fuel tax
- Local taxes
- Coal Severance Tax
- Corporate Income Tax
- Fiduciary Tax
- Oil & Gas Severance Tax
- Prepaid Wireless 911 Fee
- Royalty Withholding
- S-Corp & Partnership Tax
- Telecommunications Tax
- And more
Your North Dakota LLC and Federal Taxes with the IRS:
By default, single-member North Dakota LLCs are taxed as Sole Proprietorships by the IRS, and by default, multi-member North Dakota LLCs are taxed as Partnerships by the IRS.
The bulleted list above refers to state and local taxes, not federal taxes filed with the IRS.
Remember, the income/losses from your North Dakota LLC will “flow through” to your personal 1040 tax return on a Schedule C, as well as additional Schedules depending on how you derive your income.
Tip: The above language often confuses a lot of people. Notice that we said “taxed as”. This means, in the eyes of the law, your North Dakota LLC is still a separate legal entity from you, but the IRS is treating your LLC differently (just for tax purposes).
Technically, your North Dakota LLC is still a “legal entity” with the state and the law, but your LLC is a “tax entity” (by default, a Sole Proprietorship or Partnership) with the IRS.
Additionally, your tax professional may recommend that your North Dakota LLC be taxed as a Corporation with the IRS. In that case, your LLC can be taxed as a C-Corp or your LLC can be taxed as an S-Corp. You’ll need to discuss this with your tax professional though, as this usually only works for certain types of businesses, and those businesses that are making close to (or over) $80,000 – $100,000 per year.
Our Recommendation for North Dakota LLCs
Calculating your tax obligations in North Dakota (and with the IRS) can be complicated and if done improperly can negatively impact your LLC.
Hiring a tax professional will not only help you keep your North Dakota LLC in compliance, but it will also give you an advisor to go to for other business questions.
You’ll want someone who’s a good fit for your company, makes you feel comfortable, and is willing to answer all of your questions. It should be someone you like personally as well as professionally. We recommend talking with at least 2-3 people before making your final decision.