North Dakota R&D Tax Credit Summary

NORTH DAKOTA R&D TAX CREDIT SUMMARY

North Dakota State R&D Tax Credit

A taxpayer is allowed a credit against the tax for conducting qualified research in North Dakota.

How to Obtain the Credit?

A business must be certified as a “qualified research and development company” before a taxpayer can elect to sell, transfer, or assign all or part of its unused Research and Experimental Expenditure Tax Credit. To apply for certification, businesses must complete this application.

Refundable/Transferable Tax Credit – No

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    • For businesses that have only recently started conducting qualified research in North Dakota, the credit is equal to 25% of the first $100,000 of the qualified research expenses
    • For expenses exceeding 100,000 in a year, the applicable percentage is 20% if qualified research first begins in 2007 through 2010, and 8% if qualified research begins after 2010
    • Unused credits may be sold, assigned, or transferred to another taxpayer, as long as the taxpayer applies for certification to the North Dakota Commerce Department’s Division of Economic Development and Finance

    Carryforward /Carryback

    If the credit exceeds the limitation, the excess can be used for up to a three-year carry-back or a 15-year carry-forward.

    Flow-Through Entities

    For pass-through entities, such as a partnership or S corporation, the credit is passed through to its owners in proportion to their ownership interests.

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