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 an exemption certificate from 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 other specified exemptions. Notably, the bill introduces a new exemption for tangible personal property purchased by the state or contractors under the new section, which is subsequently installed by licensed contractors. 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