N.D. Admin. Code 81-04.1-04-02
Farm machinery and irrigation equipment used principally for producing agricultural crops or livestock, including leasing or renting of farm machinery and equipment, are subject to a special gross receipts tax in lieu of sales tax at a reduced rate, as provided by North Dakota Century Code chapter 57-39.5.
Machinery sold for nonagricultural purposes is subject to sales tax at the full rate. Motor vehicles required to be registered with the motor vehicle department, including vehicles such as trucks, pickups, cars, snowmobiles, all-terrain vehicles, and garden tractors, do not qualify as farm machinery. Irrigation equipment sold for nonagricultural purposes is subject to sales tax at the full rate. Tires, accessories, communication equipment, tools, shop equipment, grain bins, feed bunks, fencing material, and other farm supplies are subject to sales tax at the full rate.
Contractors installing barn cleaners, milking systems, automatic feeding systems, irrigation systems, and similar installations which become a part of real property are subject to use tax on the cost of the materials.
Parts, excluding tires, used to repair qualifying farm machinery or farm irrigation equipment, are exempt from the special gross receipts tax. These same parts are subject to the general North Dakota sales and use tax rate when sold to contractors or others who do not use the machinery exclusively for agricultural purposes.
Farm repair parts include any durable goods, except tires, used to repair qualifying farm machinery or farm irrigation equipment. Durable goods do not include fluids, gases, oils, greases, lubricants, paints, and waxes. Farm machinery and farm irrigation repair parts do not include items like tools, lumber, twine, fencing material, or storage tanks.
Sales of parts not clearly identified for use in farm machinery or farm irrigation equipment are subject to the reduced rate when used by the seller to repair farm machinery or farm irrigation equipment.
When parts are sold over the counter, the seller should use discretion but should generally accept in good faith the purchaser's word as to their intended use. When the purchaser intends to use the parts on a qualifying farm machine or qualifying farm irrigation equipment, the qualifying parts are exempt from sales tax. If the parts are for nonfarm use, the general sales tax rate must be charged.
N.D. Admin Code 81-04.1-04-02
General Authority: NDCC 57-39.2-19, 57-40.2-13
Law Implemented: NDCC 57-39.2-01, 57-39.2-02.1, 57-39.2-04, 57-39.2-08.2, 57-39.5-01, 57-39.5-01.1, 57-39.5-02, 57-40.2-01, 57-40.2-02.1, 57-40.2-03.3, 57-40.2-05, 57-40.2-12