North Dakota Sales Tax Enforcement Actions
Checklist
Understanding the Notice of Determination
A North Dakota sales tax notice of determination is an official document from the Office of the
State Tax Commissioner indicating that the state has identified a sales tax compliance issue with your business. The notice may state that your business has not registered for a sales tax permit, has not filed required returns, owes unpaid sales tax, or has failed to respond to a previous communication from the state.
This notice represents a formal step in the state’s collection and compliance process. It signals that the agency has moved beyond routine filing reminders and requires your immediate attention.
Why the State Issues This Notice
The Office of the State Tax Commissioner issues a notice of determination to ensure businesses comply with North Dakota sales tax law and applicable tax laws governing state tax compliance.
When the state identifies a registration gap, missing returns, or unpaid tax through its own records or through third-party information, it sends a notice to notify the taxpayer and request corrective action.
Consequences of Non-Response
If you do not respond to a notice of determination, the state will continue collection efforts.
These efforts may include additional notices, tax liens against business assets or personal property, submission of your debt to the Treasury Offset Program for federal refund intercepts, or referral to the Legal Division for court action.
The longer the issue remains unresolved, the more penalties and interest accrue on any unpaid tax balance. North Dakota law requires a late filing penalty of five percent or five dollars
(whichever is greater) for the first month a tax return is not filed, with an additional five percent
added each month up to a maximum penalty of twenty-five percent.
Interest charges apply at twelve percent per year under North Dakota law. These charges are computed from the filing deadline to the date when all tax, interest, and penalties are fully paid.
What This Notice Does Not Mean
Receiving a notice of determination does not automatically mean your business license will be suspended, though continued non-compliance could lead to that outcome. A notice of determination is an opportunity to respond and does not constitute a final determination if you file a timely protest with supporting documentation.
Required Actions After Receiving This Notice
Read the entire notice carefully and identify the specific compliance issue identified by the state.
Complete these steps systematically
1. Note the business name, business identification number, and tax period or periods referenced in the notice.
2. Locate the deadline for responding or taking action stated in the notice.
3. Write down any phone number, email address, or mailing address listed for questions.
4. Gather all relevant business records, including sales records, invoices, receipts, and transaction logs for the period or periods mentioned.
Find any previous correspondence from the Office of State Tax Commissioner and collect records showing whether a sales tax permit application was submitted. If you filed sales tax returns, gather copies of those returns for your review and comparison against the state’s calculations.
Compare the state’s calculation to your own records of sales and tax collected to identify any discrepancies or errors in the notice itself. Determine whether the amount appears accurate based on your business records and review the types of sales your business made during the period in question.
Filing a Protest
You have thirty days from the postmark date of the notice of determination to file a notice of protest. If you live outside the United States, you have ninety days to file.
Your notice of protest must be signed by you or a duly authorized agent. It must contain specific information, including your name, address, telephone number, social security number or federal identification number, and sales tax permit number if applicable. The notice must also include the name, address, and telephone number of your agent, if any, the type of tax and tax periods under protest, and the amount under protest.
You have up to ninety days after the notice of determination to file a written statement of grounds for protest. This statement must set forth your specific reasons for opposing the determination, with supporting documentation organized clearly by date.
The Office of State Tax Commissioner will acknowledge receipt of your statement of grounds within fifteen days. A detailed response addressing each objection you raised will be provided within ninety days under North Dakota law.
Payment Options and Relief
If you cannot pay the full amount owed, contact the Office of State Tax Commissioner at
701-328-1244 or email collectionstax@nd.gov to request a payment plan. Payment plans typically last six months to two years based on your total tax liabilities, proposed monthly payment, and compliance history during the audit process.
You can request a waiver of penalty and interest charges if you have good cause. The North
Dakota Administrative Code defines good cause as being cooperative during the audit process and having a history of correct filing, which means submitting accurate sales tax returns on time.
Understanding Tax Liens
When sales tax becomes due and unpaid, a lien automatically attaches to all property of the taxpayer under North Dakota Century Code section 57-39.2-13. The Office of State Tax
Commissioner files a notice of lien in the central indexing system maintained by the Secretary of
State to perfect priority against other creditors.
A lien is a legal claim against your property that may prevent you from selling or purchasing current or future property without a clear title. Credit reporting agencies may pick up a lien as it becomes part of public records, which could adversely affect your credit score and financial standing.
Common Mistakes to Avoid
- Do not ignore the notice or miss the North Dakota sales tax protest deadline stated in the
notice of determination. Missing this deadline results in the state proceeding with collection action without further negotiation and could result in additional interest charges accumulating on your account.
- Do not send incomplete information or documentation when responding to the agency.
Always contact the state to discuss the issue before making partial or informal payments to verify where payments should be sent and how they should be applied to your account.
Facing State Enforcement or Payroll Tax Issues?
If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.
We help with
- State enforcement actions and notices
- Payroll tax debt review and resolution
- Penalty and interest reduction options
- Payment plans and compliance solutions
- Representation before state tax agencies
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