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 taxes imposed under home rule authority by local governments.

Additionally, the bill amends existing provisions regarding use tax on contractors, specifying that the use tax does not apply to tangible personal property purchased by the state or by contractors under the new exemption section, provided that the property is subsequently installed by a licensed contractor. The effective date for the provisions of this Act is set for taxable events occurring after June 30, 2025.

Statutes affected:
INTRODUCED: 57-40.2-03.3