The City of Grand Forks imposes a sales and use tax on purchases made in Grand Forks.
The current sales and use tax rate for most purchases in Grand Forks is 2.25%.
There is an additional 1/4% city lodging and restaurant tax imposed on purchases of prepared food, beverages, on-sale alcoholic beverages, and the leasing and renting of hotel, morel, bed and breakfast and tourist court accommodations.
The State of North Dakota also imposes a sales and use tax of 5%.
For a $100 purchase, the sales tax would be $7.25. That $7.25 would be divided up as follows:
- State of North Dakota receives $5.00
- City of Grand Forks receives $2.25
Where does the City portion of the Sales and Use Tax go?
The City Sales and Use Tax is divided to support several functions of the City. The 3/4% tax is dedicated to fund payment of bonds for the construction and capital needs of the Alerus Center. The 1% portion of the tax is allocated to three areas based on a resolution of the City Council. The graphic below shows the current allocation of the sales tax 1 3/4% sales tax. 1/2% is dedicated to roads and water projects, for more informaton on this portion of the sales tax, click here.
Maximum Amount for Local Sales and Use Tax
There is a maximum amount of local sales and use tax for an individual transaction which is set at $56.25. This equates to the tax charged on a total purchase of $2,500.
A transaction which is larger than $2,500 will result in more than the maximum amount of tax being collected. State Century Code requires that the retailer must collect the full amount of tax and the taxpayer may then request a refund of the excess local tax charged.
Refunds are processed through the State Tax Department. Click here for a link to the State Tax Departments page which contains a form and more information on claiming a refund.
Exemptions to the Sales and Use Tax
The City sales and use tax guidelines follow the State of North Dakota sales and use tax guidelines. Therefore, if an item is exempt under state rules it would be exempt from city tax. For questions on whether the purchase you are considering would be taxable, please contact the State Tax Department.