This bill proposes the creation of a new section in the North Dakota Century Code that establishes a sales and use tax exemption for contractors, subcontractors, or builders who purchase tangible personal property on behalf of the state of North Dakota. To qualify for this exemption, contractors must hold a valid sales tax permit, obtain a purchasing agent authorization letter from the state, and secure a copy of the exemption certificate issued to the state by the tax commissioner. The exemption applies only to materials that become part of improvements to real property owned by the state and does not extend to local sales or use taxes imposed by cities or counties.

Additionally, the bill amends existing provisions regarding use tax on contractors, specifying that the tax does not apply to certain categories of tangible personal property, including those used in agricultural processing, oil and gas facilities, and renewable energy projects. Notably, the bill introduces new exemptions for tangible personal property purchased by the state or contractors under the new section, provided that the property is installed by a licensed contractor and becomes part of state-owned property improvements. The effective date for these changes is set for taxable events occurring after June 30, 2025.

Statutes affected:
INTRODUCED: 57-40.2-03.3