Forming your business entity in Delaware—specifically, a corporation—gives you a lot of flexibility, but you may still need to follow local laws depending on what state you operate in.
Specifically, if you do business in North Dakota, you need to register with the state. We’ll walk through the process and simplify it. But first, how can you tell whether you’re legally doing business in North Dakota?
When to register as doing business in North Dakota
Delaware C corps—and all other corporations formed outside of North Dakota—are referred to as “foreign” corporations by the State.
North Dakota statutes do not specifically define what is considered doing business in the state. However, North Dakota statutes provide that the following activities would not require you to register with the State:
Defending or settling a lawsuit
Having a bank account in the state
Selling through independent contractors
When to register to collect sales tax in North Dakota
Every state has rules about when a company is required to pay sales tax. These are called sales tax nexus rules.
You can think of the nexus as a special version of that state’s border; if you perform certain business activities within that border, you fall into the state’s sales tax nexus, and you’re required to register for and collect state sales tax.
Typically, these actions take the form of buying and selling goods and services.
In North Dakota, the sales tax nexus rules only apply to sellers who sell physical goods or services to North Dakota residents.
Until 2018, selling or buying non-physical goods—like subscriptions to streaming services, SaaS memberships, etc.—did not, generally speaking, qualify you for sales tax nexus. After an important court ruling in 2018, that changed. Now, if you buy or sell non-physical goods or services in a state, you may fall within its sales tax nexus.
North Dakota sales tax nexus (physical goods and property)
You may need to register with North Dakota’s Office of State Tax Commissioner to collect and remit sales tax if you sell:
- Taxable tangible personal property,
- Admissions to recreational activities, or
- Rental of lodging accommodations
You will need to collect and remit sales if you meet any of the previous requirements regardless of how many transactions you perform in the state or how much you earn in the state. You can learn more about physical presence for sales tax purposes through the State’s website.
North Dakota sales tax nexus (non-physical goods and property)
The new state sales tax laws applying to non-physical (ie. internet) sales allow you to qualify for sales tax nexus even without physical presence or goods. In North Dakota, you need to cross a certain threshold to qualify.
You will need to collect and remit sales if you have:
- $100,000 or more in gross retail sales to North Dakota in the previous calendar year; or
- 200 or more separate transactions of sales in North Dakota in the previous calendar year
If you would like to take a deep dive, you can check out the State’s website.
As usual, this isn’t legal advice—just a guide. If you’re not 100% clear on whether you fall within North Dakota’s sales tax nexus, it’s best to confer with your legal counsel and/or an accountant that has expertise in North Dakota’s legal code and tax regulations.
How to register to do business in North Dakota
- Select a name under which to do business. This doesn’t have to be the name you registered when incorporating in Delaware, but it can be.
- Fill out an application. You’ll need to file a Certificate of Authority Application to the North Dakota Secretary of State along with a Delaware Certificate of Good Standing.
- Pay the fee. Now you pay the North Dakota Secretary of State a $145 filing fee.
- Submit your Application for Certificate of Authority Application.
- Wait. Processing typically takes two to four weeks.
Once you’re approved to operate as a qualified foreign business in North Dakota, you’ll need to comply with certain requirements.
Compliance as a qualified business in North Dakota
To stay in compliance and continue legally doing business in North Dakota, you need to meet two requirements: maintaining a registered agent and filing your annual report. On top of that, you will also need to pay a corporate income tax.
Registered agent in North Dakota
Your registered agent in North Dakota is your point of contact with local authorities. If you don’t have a physical address for your company in North Dakota, it may be advantageous to find a registered agent to receive state notices on your behalf.
Foreign corporations are required to have a registered office in North Dakota. The office cannot be a P.O. box, rather it must be a physical address of your registered agent or a licensed registered agent service.
Your registered agent will forward any important information, such as business mail, to you. There are a number of firms that contract out registered agents. They typically cost $50 – $100 per year.
Annual reporting in North Dakota
Every year, you must file a statement with the State, updating any changes to the company address or the composition of the Board and officers. You’ll include info like:
- The legal name of your business
- The name and address of your registered agent
- The names and addresses of board members, managers, and officers
The filing fee for the annual report is $25.
Paying your annual corporate income tax
A corporate income tax is a tax imposed directly on the income of your corporation. For more information on filing and paying your annual taxes, please see the following guidance from North Dakota’s Office of State Tax Commissioner.
Registering for sales tax in North Dakota
If you meet the requirements to collect sales tax in North Dakota, you will need to apply for a sales and use tax permit in the state. You can apply for a sales and use tax permit through the North Dakota’s online portal.
Hiring and paying employees in North Dakota
When you hire a new employee in North Dakota, federal and state laws require that you report new hires within 20 days of the employee’s first day of work. You can report your new hires online.
Your payroll provider should be able to take care of paycheck withholdings, but it’s up to you to register as an employer with the State and set up an online employer account.
For a comprehensive guide of your responsibilities, North Dakota provides the following information.
The easiest way to register your business in North Dakota
To register your business in North Dakota, you’ve got to keep track of a lot of moving parts. Failing to file the right forms, provide the right information, or stay on top of compliance laws can lead to serious headaches.
Capbase makes it easy. When you incorporate your Delaware corporation on Capbase, we will generate the required information needed to register to do business in North Dakota and keep you up to date on any required filings.
The compliance calendar inside your Capbase account will notify you of upcoming fees, reporting, or other requirements, so you can keep your startup in good standing with North Dakota state officials. Try Capbase now.
Written by Capbase Staff
Capbase is a team of designers, engineers, and business professionals spread across 6 time zones on 3 continents united by our passion for dogs, coffee, and great software.
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