North Dakota Office of State Tax Commissioner
               GuidelineGuidelineGuideline --- SalesSalesSales Tax:Tax:Tax: ExemptExemptExempt OrganizationsOrganizationsOrganizations

Sales Made to Exempt Organizations 
The North Dakota Office of State Tax Commissioner issues sales tax exemption certificates to 
organizations that are exempt from paying North Dakota sales and use tax on purchases made by 
the organization. Sellers making exempt sales to exempt organizations must receive a copy of the 
exemption certificate and keep the copy in the seller’s files to support the exempt sales.

Exempt organizations include: 
  Federal, state, and local                                                 Nonprofit voluntary health groups
   government units                                                           (recognized by National Health
  Schools (public and private)                                               Council)
  Hospitals, nursing homes,                                                 State and local fairs
   intermediate/basic care facilities,                                       Nonprofit meal delivery groups, but
   emergency medical service providers,                                       only on items that pass to the final
   and residential end-of-life facilities                                     consumer of the meal, including
   licensed by ND Department of Health                                        containers, packages, and wrappers
  Assisted living facilities licensed by                                    Qualified senior citizen organizations
   ND Department of Human Services

A. Government Units
   Sales, rentals, or leases of tangible personal property to the United States government, state
   government, its departments and institutions, and political subdivisions are exempt from sales and
   use tax. To be exempt, payment must be made directly to the seller and paid from government
   funds by government warrant, check, or credit card that is centrally billed to and paid by the
   government entity.

B. Native American Tribal Governments
   Sales made to a tribal government are exempt from sales and use tax. This includes a tribal
   government agency that performs essential government functions.

C. Schools
   Public schools are considered instrumentalities of state government and are exempt from North
   Dakota sales and use tax on all purchases made by the school if payment is made directly to the
   seller using school funds.

   Private or parochial schools are exempt from sales tax when purchasing items to be used
   exclusively in the operation of the school. These items include textbooks, yearbooks, school
   supplies, and items purchased by the school for use in classrooms, gymnasiums, athletic fields,
   and offices.

                                                                            tax.nd.gov | salestax@nd.gov 
                                           600 E. Boulevard Ave., Dept. 127 | Bismarck, ND 58505-0599 
                                                               Phone: 701-328-1246 | TTY: 800-366-6888

Guideline - Exempt Organizations

      The exemption granted to a school does not extend to any charitable groups associated with the 
      school. Parent Teacher Organizations (PTOs) and sports booster clubs may not use the school’s 
      exemption certificate to make purchases.

D.    Health Providers
      Hospitals, skilled nursing facilities, intermediate and basic care facilities, residential end-of-life
      facilities, and emergency medical service providers licensed by the North Dakota Department of
      Health are exempt organizations. Sales to assisted living facilities licensed by the North Dakota
      Department of Human Services are also exempt.

      Voluntary health associations that are recognized by the Internal Revenue Service (IRS), the
      National Health Council, the Office of State Tax Commissioner, and the North Dakota Secretary of
      State as a nonprofit organization are exempt from sales tax.

      Qualified senior citizen organizations that are 501(c)(3) organizations and listed as charitable
      organizations with the North Dakota Secretary of State, and either provide services through the
      aging services division of the North Dakota Department of Human Services or receive grant funds
      through the North Dakota Department of Transportation under the Federal Transit Administration’s
      enhanced mobility of seniors and individuals with disabilities program are exempt from sales and
      use tax.

Exemption Certificate Registration and Use
To make purchases that are sales and use tax exempt, exempt organizations must provide sellers 
their Certificate of Exempt Status. Exempt organizations must complete the Application for Sales Tax 
Exemption Certificate and submit it to our office to obtain this certificate. See the application at
www.tax.nd.gov/forms. Only groups identified on this certificate may buy goods without sales and use 
tax. In the absence of this certificate, the seller is obligated to charge sales tax. 

Contracts With Exempt Organizations
Contractors performing a contract for the United States government, state government, its departments 
and institutions, or political subdivisions and other organizations that are exempt from sales and use 
tax in North Dakota are not exempt from paying sales and use tax on materials and supplies used or 
consumed in carrying out contracts. In these cases, the contractor is required to pay sales and use tax 
as required for contracts with non-exempt organizations. The only exception is for contractors hired for 
labor only contracts.
See the Guideline - Contractor’s for additional information - www.tax.nd.gov/guidelines. 

Sales Made by Exempt Organizations
Exempt organizations that operate ongoing and in direct competition with other retailers must always 
collect and remit sales tax regardless of the use of the net sales receipt.

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Guideline - Exempt Organizations

Nonprofit Organizations
North Dakota sales and use tax law does not automatically exempt purchases made by nonprofit 
organizations. Instead, the law identifies specific organizations that, if certain conditions are met, are 
exempt from sales and use tax. Examples of these organizations are:
     Churches and church groups                        Labor organizations
     Service clubs                                     Fraternities and sororities
     Social clubs                                      Professional associations
     Veterans’ groups                                  Private, for-profit schools
     Trusts                                            Sports booster clubs
     Recreation groups                                 PTOs
     Youth groups                                      Dance teams

Exempt Sales Made by Nonprofit Organizations
Under certain conditions, the gross receipts from sales made by qualifying nonprofit organizations may 
be exempt from sales tax. A qualifying nonprofit must meet ALL three requirements below to qualify:
1. The net proceeds from the sale must be used for charitable, educational, or religious purposes.
2. The seller may not compete with retailers by maintaining inventory, conducting regular sales from
      a permanent or seasonal location, or making online sales.
3. The sales cannot be made on a regular, on-going basis.

If the gross receipts from an event held in a publicly owned facility are greater than $10,000 for a single 
event, sales tax must be remitted to the Office of State Tax Commissioner on the amount of sales over 
$10,000. Public owned facilities include civic centers, public schools, government fairgrounds, or State 
Capitol grounds. 

Example: The Elementary School PTO’s fall fundraiser was held at the public school. The fundraiser 
had total sales of $10,650. The Elementary School PTO must remit sales tax on the amount of $650.

Other conditions where the gross receipts from sales are exempt from sales tax include:
1. Sales of tickets or admissions to state, county, district, and local fairs.
2. Sales of tickets or admissions to athletic, musical, dramatic, or scholastic events held, sponsored,
      hosted, or controlled by an institution of higher education.
3. Sales from any public school district if the receipts are expended in accordance with N.D.C.C
      § 15.1-07-10 or 15.1-07-11.
4. Sales by a nonprofit music or dramatic arts organization that is exempt from federal income
      taxation and is organized and operated for the presentation of live public performances of
      musical or theatrical works on a regular basis. Examples of qualifying organizations include a
      community theater group or local symphony or orchestra.

Gross receipts from sales of tickets or admissions to or sales made at an annual church supper or 
bazaar held in a publicly owned facility are not subject to sales tax. Annual means occurring not more 
than one time in any calendar year.

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Guideline - Exempt Organizations

Letter of Exemption
Nonprofit organizations qualifying to make sales exempt from sales tax may obtain a letter of exemption 
by contacting the Sales Tax Compliance section at salestax@nd.gov. This letter allows qualifying 
nonprofit organizations to purchase the goods they will be reselling without paying sales and use tax on 
their purchase price. 

To apply for a letter of exemption, submit a request to the Sales Tax Compliance Section at
salestax@nd.gov with the following information: 
       Name and contact information for the organization.
       Name of the event.
       Description of the fundraising event.
       Frequency of the event.
       Dates of the event.
       Location of the event.
       Whether the event is in-person or online.
       How the net receipts from the event will be used.
       The name of the vendor the organization is purchasing from.

Taxable Sales Made by a Nonprofit Organization
Nonprofit groups that operate ongoing and in direct competition with other retailers must always collect 
and remit sales tax regardless of the use of the net sales receipt. 

Organizations that make regular retail sales must have a North Dakota sales and use tax permit to 
collect and remit applicable tax. Organizations operating on a limited basis in publicly owned facilities 
should contact the Sales Tax Compliance Section at salestax@nd.gov or 701-328-1246 prior to 
making taxable sales.

Contact Information
If you have questions, please contact the Sales Tax Compliance Section at salestax@nd.gov or
701-328-1246.

22081
(Revised February 2022)

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