If you want to start and run a North Dakota limited liability company (LLC), you'll need to prepare and file various documents with the state. This article covers the most important ongoing reporting and state tax filing requirements for North Dakota LLCs.
The State of North Dakota requires you to file an annual report for your LLC. The due date for the annual report is November 15. The filing fee is $50. You can generate an annual report form from the Secretary of State's business records search page.
When it comes to income taxes, most LLCs are so-called pass-through tax entities. In other words, the responsibility for paying federal income taxes passes through the LLC itself and falls on the individual LLC members. By default, LLCs themselves do not pay income taxes, only their members do. Some states do impose a separate tax or fee on LLCs for the privilege of doing business in the state. North Dakota, though, is not one of those states.
However, in some cases, the owners of an LLC may choose to have their business treated like a corporation for tax purposes. This choice is made by filing IRS Form 2553 with the IRS. (See the IRS website for the form.) Unlike the default pass-through tax situation, when an LLC elects to be taxed as a corporation, the company itself must file a separate tax return. The State of North Dakota, like almost every other state, has a corporate income tax. In North Dakota, the corporate income tax generally is calculated at a small series of marginal rates. If your LLC is taxed as a corporation you'll need to pay this tax. The state's corporate income tax return (Form 40) is filed with the North Dakota Office of the State Tax Commissioner (also called the Tax Department). For more details, check Nolo’s article, 50-State Guide to Business Income Tax, or the Tax Department website.
Does your LLC have employees? If so, you'll need to pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not covered here. (But note that federal employer tax obligations start with obtaining a federal employer identification number (EIN).) However, North Dakota employers also must pay taxes to the state.
Firsts, you'll need to withhold and pay employee income taxes to the Office of the State Tax Commissioner (Tax Department). Begin by registering your business with the Tax Department using Form SFN 59507. Once you've registered, you'll need to file withholding taxes on a periodic basis (typically quarterly). You'll also need to use Form 307 each year to reconcile your LLC's tax withholding. For more details, check the Tax Department website.
In addition, you'll probably need to register to pay state unemployment insurance (UI) taxes. These taxes are handled through Job Service North Dakota (JobsND). For more information about how to pay these taxes, check the JobsND website.
If your LLC will sell goods to customers in North Dakota, you will need to collect and pay sales tax. You'll have to register for this purpose with State Tax Commissioner and then make periodic sales tax payments for goods sold. You can register on paper (Form SFN 59507) or online. After you've registered, you'll be sent a sales tax permit. Then, on a periodic basis you must submit sales tax returns to the Tax Commissioner. If you have a permit, the state will send you a return (Form ST) on a quarterly basis. For more information, check the State Tax Commissioner website.
If you will be doing business in states other than North Dakota, you may need to register your LLC in some or all of those states. Whether you're required to register will depend on the specific states involved: each state has its own rules for what constitutes doing business and whether registration is necessary. Often activities such as having a physical presence (a business location) in a state, hiring employees in a state, or soliciting business in a state (such as by telephone, print ads, mail, or the Internet) will be considered doing business for registration purposes. Registration usually involves obtaining a certificate of authority or similar document.
For more information on the requirements for forming and operating an LLC in North Dakota, see Nolo’s article, 50-State Guide to Forming an LLC, and other articles on LLCs in the LLC section of the Nolo website.