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Sales and Use Tax

STATE OF NORTH DAKOTA
OFFICE OF STATE TAX COMMISSIONER
Cory Fong, Commissioner

The Grand Forks City Council has amended the Grand Forks city sales and use tax ordinance effective January 1, 2006. The ordinance changes are summarized as follows:
  • A 1 ¾ percent sales, use or gross receipts tax will apply to all taxable sales, including sales of prepared food, beverages, on-sale alcoholic beverages, and the leasing and renting of hotel, motel, bed and breakfast and tourist court accommodations.
  • A separate ¼ percent city lodging and restaurant tax will apply to the sales of prepared food, beverages, on-sale alcoholic beverages, and the leasing and renting of hotel, motel, bed and breakfast, and tourist court accommodations. The current 2 percent city sales tax rate imposed on these products and services will be replaced January 1, 2006 by the 1 ¾ percent city sales tax and the new ¼ percent city lodging and restaurant tax.
  • City sales and use tax exemptions have been eliminated on the sale of mobile homes and on the sale of cement, concrete, or asphalt to be installed outside of the city limits.
  • The 1 ¾ percent tax on sales of alcoholic beverages becomes a city gross receipts tax consistent with the state’s alcoholic beverage gross receipts tax. This tax continues to be reported with the city sales tax on the North Dakota sales and use tax return.
Sales Tax
Current Tax Rates
Property Valuations
Property Tax Exemptions
Methods of Appeal
Assessment Roll
Compute Your Property Tax
Property Tax Comparisons
For Example:
For a $100 purchase, the sales tax would be $6.75.
That $6.75 is divided up as follows:
  • State of North Dakota receives $5.00
  • City of Grand Forks receives $1.75
The City's $1.75 is divided up as follows:
  • General Fund receives $.49.5
  • Infrastructure uses $.30
  • Economic Development $.20
  • Alerus Center receives $.75

Combined state ad local tax rates effective January 1, 2006.

2% Natural gas (2% state tax; exempt from city sales and use tax).
3% New farm machinery and new farm irrigation equipment (3% state tax; exempt from city sales and use tax). Used farm machinery and used farm irrigation equipment are exempt from state and local taxes.
4 ¾% New mobile homes (3% state + 1 ¾% city sales and use tax). Used mobile homes are exempt from state and local taxes
5% Gross receipts from coin operated vending of 99 cents or less (5% state tax; exempt from city sales and use tax). Note: 56% of the gross receipts form coin-operated amusement machines remain subject to the city’s 1 ¾% sales tax.
7% Lease or rental of bed and breakfast facility, and sale of prepared food (5% state + 1 ¾% city sales tax + ¼% city lodging and restaurant tax).
8% Lease or rental of hotel, motel, or tourist court accommodation, excluding bed and breakfast facility (6% state + 1 ¾% city sales tax + ¼% city lodging and restaurant tax).
8 ¾% Off-sale sales of alcoholic beverages (7% state + 1 ¾% city gross receipts tax).
9% On-sale sales of alcoholic beverages (7% state + 1 ¾% city gross receipts tax + ¼% city lodging and restaurant tax. See page 2 for correct application of ¼% tax on on-sale alcoholic beverage sales.
6 ¾% All other taxable sales and purchases within the city limits of Grand Forks.

Application of ¼ percent restaurant and lodging tax

The ¼ percent lodging and restaurant tax applies to the following: 1) the gross receipts from leasing or renting of hotel, motel, bed and breakfast, and tourist court accommodations for a period of less than 30 consecutive days or one month, and 2) the gross receipts of a restaurant from sales of prepared food and beverages, not including off-sale alcoholic beverages.

The city ordinance defines restaurant as any place where food is prepared and intended for individual portion service for consumption on or off the premises. The definition of prepared includes heating prepackaged food. Pop, candy and other taxable food products purchased for consumption on or near the premises of the seller also are considered prepared food and are subject to the city restaurant and lodging tax. A North Dakota Attorney General’s opinion states on-sale alcoholic beverage retailers who do not sell prepared food are not restaurants under the law and are not subject to the tax; however “a bar which, for example, heats prepackaged sandwiches, frozen pizza or similar items for its customers is subject to the tax…”

Grocery stores, supermarkets, meat markets, bakery stores, convenience stores, theaters an similar establishments are not considered restaurants unless they engage in the sale of prepared foods or beverages for immediate consumption on or near the premises. The state and city sales taxes and the lodging and restaurant tax will apply on the gross receipts from sales of meals; sandwiches made on-site at the customer’s request; single portion size entrees and quick meals (hot dogs, pizza, etc); food from salad bars; prepared foods sold at a unit in a manner reasonably and commonly considered a meal (combination plates); soda fountain items, such as sundaes, milk shakes, malts, ice cream cones and soda; sales of refrigerated soft drinks sold in open containers; popcorn prepared on the premises; unpackaged baked goods, such as doughnuts, muffins, bagels, cookies and other similar items sold for immediate consumption within an eating facility on the merchant’s premises.

The city sales, use and gross receipts taxes continue to be reported on Form ST – State Sales and Use Tax Return in the local option taxes section of the return. However, the new ¼ percent city lodging and restaurant tax is reported on a separate Form F10 Restaurant and Lodging Tax Return. Businesses collecting the ¼ percent tax will receive the Form F10 from our office. The Form F10 will be filed on the same schedule as your sales and use tax return (i.e., monthly, quarterly, annually) and also has the same due date as the sales tax return. The Form F10 City Lodging & Restaurant Tax Return has two columns, but all sales subject to the ¼ percent tax will be reported in Column A of the return.

If you have any questions regarding the Grand Forks city sales, use, or gross receipts taxes or the Grand Forks city lodging and restaurant tax, please contact us at Office of State Tax Commissioner, Sales and Withholding Section, Dept. 127, 600 E Boulevard, Bismarck, ND 58505-0599, phone 701-328-3470 or e-mail salestax@state.nd.us.




City of Grand Forks
255 N 4th Street * Grand Forks, ND 58203 * Phone (701) 746-INFO