North Dakota LLC Taxes: The Complete Filing Guide (2025)

North Dakota LLC Tax Basics

Navigating your North Dakota LLC tax obligations doesn’t have to be complicated. We’ll walk you through the essentials of pass-through taxation, explain North Dakota’s specific requirements, and highlight strategies to stay compliant and organized. This guide covers everything from federal income taxes to city-specific requirements and filing deadlines.

Use the links below to jump directly to the section you need:

• North Dakota LLC Taxes at a Glance
• Understanding LLC Taxation Basics
• Federal Tax Obligations
• North Dakota State Taxes
• Local Tax Considerations
• Tax Calendar and Filing Tips
• Tax Strategies for North Dakota LLCs
• Forms and Resources

North Dakota LLC Taxes at a Glance

Tax Type	Rate	Filing Deadline	Forms Required
Federal Income Tax	10-37% (personal brackets)	April 15, 2025	Form 1040 + Schedule C or Schedule E/K-1
Self-Employment Tax	15.3%	April 15, 2025	Schedule SE
North Dakota Income Tax	0%–2.50%	April 15, 2025	Form ND-1/Form 58
North Dakota Corporate Income Tax	1.41 %–4.31 %	April 15, 2025	Form 40
Federal Payroll Taxes (If Employees)	7.65% employer + 7.65% employee (FICA)	Quarterly (April 30, July 31, October 31, January 31)	Form 941
North Dakota Unemployment Tax (If Employees)	0.08%–9.59% (new employers: 1.09%-6.08%)	Quarterly	Filed online
Federal Unemployment (FUTA)	6% on first $7,000 per employee (0.6% after credits)	January 31, 2026 (annual)	Form 940
Sales & Use Tax	5%	Monthly, quarterly, or annually based on sales volume	Filed online
Annual Report	$50 fee	November 15, 2025	Filed online

Understanding LLC Taxation Basics

How North Dakota LLCs Are Taxed By Default

Your North Dakota LLC doesn’t pay taxes itself. Instead, profits flow through to you and your members, who report them on personal tax returns. This is called pass-through taxation.

Here’s how it works:

1. Your LLC earns income from business activities
2. The LLC itself files no tax return (unless you elect otherwise)
3. Profits “pass through” to members based on ownership percentage
4. Each member reports their share on their personal tax return
5. Members pay tax at their individual income tax rates

What this means for you: Unlike corporations, your business profits are only taxed once, which typically saves money.

Tax Classification Options

While pass-through taxation is the default, your North Dakota LLC can choose alternative tax treatments:

Default LLC Tax Status:

• Single-member LLC: Taxed as a sole proprietorship
• Multi-member LLC: Taxed as a partnership

Optional Tax Classifications:

• S Corporation: Can reduce self-employment taxes by paying “reasonable salaries”
• C Corporation: LLC pays corporate tax on profits, members pay personal tax on distributions (creates double taxation)

Not sure which tax classification is right for your business? Schedule a free consultation with 1-800Accountant.

Federal Tax Obligations

Income Tax

As a North Dakota LLC owner, you’ll report your share of business profits on your personal tax return using:

• Form 1040 + Schedule C (single-member LLCs)
• Form 1040 + Schedule E + Schedule K-1 (multi-member LLCs)

Federal income tax rates range from 10% to 37% based on your tax bracket (actual brackets will depend on inflation adjustments and any tax law changes).

Simply Put: Whatever money your business makes (after expenses) gets added to your personal tax return, just like income from a job.

Self-Employment Tax

LLC members actively involved in the business must pay self-employment tax of 15.3% (covering Social Security and Medicare) on their share of LLC profits.

Key points:

• Applies to net earnings of $400 or more
• Calculated on Schedule SE
• You can deduct 50% of the self-employment tax as an “above-the-line” deduction, which lowers your adjusted gross income

What happens if I miss this payment? The IRS charges penalties of 0.5% per month plus interest. However, first-time mistakes can often qualify for penalty abatement if you have a clean compliance history.

Employment Taxes

If your LLC has employees, you must:

• Withhold federal income tax
• Pay and withhold FICA taxes (7.65% each for employer and employee)
• Pay federal unemployment tax (FUTA)
• File quarterly employment tax returns (Form 941)
• Provide W-2 forms annually

Estimated completion time: 2-3 hours per quarter (significantly less with payroll software or professional help)

Estimated Tax Payments

Because no tax is withheld from your LLC profits, you’ll likely need to make quarterly estimated tax payments using Form 1040-ES. These payments cover both income and self-employment taxes on your share of the business income. Missing deadlines or underpaying can lead to IRS penalties, even if you pay in full later.

Working with an accountant can help ensure accurate calculations, on-time payments, and a smarter overall tax strategy.

Key deadlines:

• April 15
• June 16
• September 15
• January 15

Pro Tip: Set calendar reminders 15 days before each deadline. This gives you time to prepare without the last-minute rush that leads to mistakes.

North Dakota State Taxes

North Dakota Income Tax

North Dakota has a graduated personal income tax ranging from 0% to 2.50% that applies to your LLC’s profits on your personal return.

Filing requirements:

• Use North Dakota Form ND-1 
• Due April 15, 2025
• North Dakota follows federal adjusted gross income as a starting point

Bottom Line: For every $1,000 your LLC earns, you’ll owe about $19.50 to $25.00 in North Dakota state income tax. However, if you don’t meet the minimum income threshold, your tax rate is 0%.

North Dakota Corporate Income Tax

If your LLC elects to be taxed as a C corp, it will need to pay North Dakota a 1.41% to 4.31% corporate income tax.

• Use North Dakota Form 40 
• Due April 15 each year
• File with the North Dakota Office of State Tax Commissioner

Sales and Use Tax

If your North Dakota LLC sells physical products or certain services:

• Collect 5% sales tax on taxable sales (plus any applicable local surcharges)
• Register for a sales tax permit through the ND Department of Revenue
• File and pay collected taxes monthly, quarterly, or annually (based on sales volume)
• Due dates are the 20th of the month following the end of your filing period

60-Second Check: Do I Need to Collect Sales Tax?

• Do you sell physical products in North Dakota? → If yes, collect tax
• Do you sell digital products? → Generally not taxable
• Do you provide services? → Most services are exempt 
• Do you sell online to North Dakota customers? → If yes, collect tax

Services typically exempt from sales tax include:

• Professional services (legal, accounting)
• Personal services (haircuts, fitness training)
• Medical services

Products typically subject to sales tax include:

• Tangible personal property
• Prepared food
• Some digital products

Payroll Taxes 

If you have employees in North Dakota, you will be responsible for two types of payroll taxes. 

Unemployment Insurance (UI) Tax 

• Register through Job Service North Dakota
• Rate is 1.03% for new employers (0.08% to 9.59% afterwards) 
• Due quarterly 

Withholding Tax 

• Register through the North Dakota Office of State Tax Commissioner
• Rates can be calculated using the state’s withholding tables 
• Due monthly or quarterly (based on employer’s total state tax withheld in the previous year)

Annual Report Filing

While not a tax, your North Dakota LLC must file an annual report to remain in good standing with the state.

• Due November 15, 2025
• $50 filing fee
• File online through the FirstStop portal
• Failure to file within 6 months could result in the administrative dissolution of your LLC

Calendar Alert: Set a reminder for November 1 to ensure you don’t miss this easy but required filing.

Local Tax Considerations

Local Option Sales Taxes

North Dakota allows cities and counties to impose local option sales and use taxes on top of the state’s 5% base rate.

Cities with local option sales taxes include:

• Mandan: 3.25% (2.25% city + 1% county)
• Fargo: 2.5% city tax on most retail sales
• Bismarck: 2.0% city tax, plus lodging and restaurant taxes
• Williston: 1.0% city tax on general sales
• See ND Local Sales Taxes by Location

Filing requirements:

• All local sales taxes are filed with the ND Office of State Tax Commissioner
• You do not need to register or file directly with any individual city
• Lodging, restaurant, and vehicle rental local option taxes are reported to the state tax department on separate forms

Property Taxes

If your LLC owns real property in North Dakota:

• Rates vary by locality
• Assessed annually
• May qualify for various exemptions based on business type
• Personal property tax may apply to business equipment

Tax Calendar and Filing Tips

Key Deadlines for North Dakota LLCs

January:

• January 15: Final estimated tax payment for previous year
• January 31: North Dakota UI wage report and payment due
• January 31: Issue W-2s/1099s to employees/contractors
• January 31: Fourth quarter federal payroll tax payment due 

April:

• April 15: Personal tax returns due
• April 15: Federal income and self-employment tax returns due

• April 15: First quarter estimated tax payment due 
• April 30: North Dakota UI wage report and payment due
• April 30: First quarter federal payroll tax payment due

June: 

• June 16: Second quarter estimated tax due 

July: 

• July 31: North Dakota UI wage report and payment due 
• July 31: Second quarter federal payroll tax payment due 

September:

• September 15: Third quarter estimated tax payment due

October:

• October 31: North Dakota UI wage report and payment due 
• October 31: Third quarter federal payroll tax payment due

November:

• November 15: North Dakota Annual Report due

Record-Keeping Checklist

Keep these records for at least 7 years:

• Business income records (invoices, receipts)
• Expense receipts and documentation
• Bank and credit card statements
• Asset purchase and improvement records
• Vehicle mileage logs
• Home office documentation
• Payroll records
• Previous tax returns

Tax Strategies for North Dakota LLCs

S Corporation Election Benefits

Converting your LLC to an S Corporation for tax purposes can save on self-employment taxes:

1. File Form 2553 with the IRS
2. Pay yourself a “reasonable salary” subject to employment taxes
3. Take remaining profits as distributions exempt from self-employment tax

Example: An LLC making $100,000 in profit pays 15.3% self-employment tax on the entire amount. As an S Corp, if $60,000 is a reasonable salary and $40,000 is taken as distributions, only the $60,000 is subject to employment taxes.

Potential Savings: In this example, you’d save about $6,120 in self-employment taxes.

Business Expense Deductions

Common deductions North Dakota LLC owners often overlook:

• Home office deduction
• Business mileage (70¢ per mile for 2025)
• Health insurance premiums
• Retirement plan contributions
• Professional development expenses
• Business meals (50% deductible)

Forms and Resources

Federal Tax Forms

• Schedule C: Profit or Loss From Business (sole proprietors)
• Form 1065: U.S. Return of Partnership Income
• Schedule K-1: Partner’s Share of Income, Deductions, Credits
• Form 1120-S: U.S. Income Tax Return for an S Corporation
• Form 2553: Election by a Small Business Corporation (S Corp)
• Form 8832: Entity Classification Election

North Dakota Tax Forms

• Form ND-1: North Dakota Individual Income Tax Return
• Form 58: North Dakota Multi-Member LLC Individual Tax Return 
• Form 40: North Dakota Corporate Income Tax Return

Helpful Resources

• North Dakota Office of State Tax Commissioner
• North Dakota Taxpayer Access Point
• Job Service North Dakota
• North Dakota Secretary of State
• Internal Revenue Service