North Dakota tax laws are being interpreted by the Office of State Tax Commissioner to require out-of-state direct shipper licensees to collect and remit local sales and use taxes on wine shipped to consumers in ND, in addition to the 7% state alcohol beverage gross receipts tax. A winery that has been issued a Direct Shipper license is required to collect local sales and use taxes even if the licensee does not have a business presence, such as employees or deliveries using the licensee’s own vehicles, within the local taxing jurisdiction. The 7% state alcohol beverage gross receipts tax and local sales and use taxes are also imposed on the cost of shipping.
Prior to making shipments into North Dakota, a winery must obtain a Direct Shipper license and a Sales and Use Tax Permit. Taxpayers may choose to file paper sales and use tax returns or file online via the North Dakota Taxpayer Access Point (TAP). A return form will be mailed for all paper filers and an email reminder for all TAP filers based on the filing frequency assigned at the time of registration. A return must be filed for each reporting period even if no sales were made or no tax is due.
Direct Shippers are required to pay an annual $50 license fee, pay liquor tax on the total gallons of wine shipped to North Dakota consumers and file a direct shipper’s annual tax report. More information on the direct shipper license and reporting requirements are available on the State Tax Commission website www.nd.gov/tax/user/businesses.