Options and Consequences of Not Paying ND Taxes

In North Dakota, individuals must file and pay state income tax. Businesses must withhold and remit state income tax (withholding tax) on behalf of their employees. Retail businesses must collect and remit sales and use tax, and depending on their industry, they may have to deal with a variety of other business taxes as well. 

The North Dakota Office of the State Tax Commissioner oversees tax administration and collection in this state. If you're struggling with individual or business tax problems in North Dakota, use TaxCure to find an experienced local tax pro based in ND. In the meantime, here is what you need to know.

How to Pay Taxes in North Dakota

You can pay your state taxes on the ND Tax website. It's free to use your bank account, but there is a small fee for credit/debit cards. Alternatively, you can mail in a payment with a voucher, or call ND Tax at (701) 327-1244. If you cannot pay in full, contact the state to ask about payment plans or other arrangements, as explained below.

Payment Plans for ND State Taxes

To request a payment plan online, you need a copy of a collection letter with a reference number. Grab your letter and bank account details. Then, visit ND's Taxpayer Access Point (TAP) to start the application. Select "individual income tax" from the drop-down list of taxes. If you're using TAP to request payments on business taxes, just choose the relevant tax from the list. 

ND Tax lets you request payments on aviation taxes, beer tax, business privilege tax, withholding tax, and other business taxes. If you don't have the right info to apply online, you can call ND Tax or email them at [email protected]. The state doesn't publish any details about how much tax you can put on a payment plan or how long you can take to pay.

Consequences of Not Paying Taxes in ND

If you don't pay your taxes, you may face the following consequences:

• Penalties and Interest - The state will apply penalties if you pay your tax late. Interest also applies. As of 2024, interest is 12% per year, and it applies from the first day you are late until you pay the tax debt. 
• Liens - The state can issue a lien that attaches to all of your real or personal property. You will not be able to borrow against the property, and if you sell it, the proceeds go to the state (up to the amount of your tax debt plus interest and penalties).
• Offsets - The state can seize your state and IRS tax refunds and apply them to your tax bill. 
• Lose of business and sales license - If you don't pay your sales/use tax or other business taxes, the state may take away your sales tax license and prevent you from operating your business.

Additionally, you may also face wage garnishments, asset seizures, or other collection actions for not paying your state taxes. A tax attorney, CPA, or enrolled agent can help you avoid these consequences and find a way to resolve your unpaid taxes. 

Can ND Tax Garnish Your Wages?

In North Dakota, creditors have the right to garnish your wages for unpaid debts, which means ND Tax can garnish your wages if you don't pay taxes. Generally, creditors can only garnish the lesser of 25% of your disposable wages or the amount of your wages that exceed 40 times the federal minimum wage. However, ND Tax may be able to garnish a higher amount. The state legal code says this restriction does not apply to garnishments for state or federal tax.

Common Collection Notices in North Dakota

If you don't pay your state taxes, ND Tax will send demands for payment, and if you still don't pay, the state can seize your assets. Here are the types of letters you'll receive if you have unpaid ND taxes.

• Statement of Tax Due - Tax, penalties, and interest due. Arrives before collection actions start and continues to come periodically until you pay your bill.
• Collection Letter - Your account has been assigned to the Office of the State Tax Commissioner's Collections Section. 
• Notice of State Income Tax Refund and Credit Offset - ND Tax is going to keep your state tax refunds and apply them to your debt. 
• Notice of Intent to Offset Federal Income Tax Refund - ND Tax can seize your IRS tax refund and apply it to your state debt.
• Notice of State Tax Lien - ND Tax has filed a lien against your real and personal property. 
• Satisfaction of State Tax Lien - You have paid your tax debt or satisfied the state tax lien in another way.

If you're unsure of whether or not a notice is real, contact the ND DOR directly. Unfortunately, sometimes scammers send notices that appear to be from the IRS or the state, but they're really just intended to steal your information.

Does ND Tax Offer Penalty Abatement?

The state may waive penalties and interest if you have good cause. That applies if you're cooperative during an audit and you have a history of paying and filing on time. 

Does ND Forgive Delinquent Taxes?

North Dakota does not forgive taxes. According to the Center for Public Integrity, the State Tax Commissioner said that if a taxpayer gets approved for an IRS offer in compromise to settle taxes for less than owed, the state will follow suit. However, the agency clarified that it can only waive interest and penalties; it cannot eliminate the tax. ND Tax considers the taxpayer's income, health, and housing situation when making these decisions.

Sales Tax in North Dakota

If you run a retail business, you must collect 5% state sales tax as well as any local sales taxes that apply in your area. Depending on your volume of sales, you may need to file monthly, quarterly, or annually. If you pay late, you incur a 5% penalty (minimum $5). Every month you don't pay, you get another 5% penalty, up to 25%. 

Sales Tax Audits

If you're selected for an ND sales tax audit, you must back up the info reported on your returns with sales records, bank statements, and other documents. Generally, auditors only go back three years, but if they find more than a 25% discrepancy in the tax reported, they can audit six years of your returns. 

Voluntary Disclosure Program

What if you were supposed to file taxes in ND but you didn't? What if you've been collecting sales tax but you haven't filed or paid? Then, you may qualify for the state's Voluntary Disclosure Program (VDP). Through the VDP, you can come clean, catch up on your state tax obligations, and minimize penalties or other consequences. The program covers income tax, sales/use tax, and withholding tax.

To qualify, you must not have been contacted by the state about the tax. Then, you must submit an application that details the type of business, the number of years you've been doing business in North Dakota, how long you've had employees in ND if applicable, and the type of tax to be included. If the state accepts your application, you have 30 days to file the missing returns, but you may be able to get up to 60 days if you request an extension.

With the VDP, the state generally only looks back three years plus the current year. However, if you've been collecting sales tax and not paying, the state will look at the entire period that's happened. With sales and use tax, you must pay all of the tax you collected, but the state may waive the penalties. You can apply through the Multistate Tax Commission (MTC) if you need to make a disclosure in multiple states at the same time.

Get Help With ND Tax Problems Now

If you have a state tax problem, you need a tax pro who has experience with your state. Unfortunately, the big tax relief companies - even the ones that appear in lists of best tax relief companies - are not equipped to deal with state tax problems. Instead, you need a local pro who understands ND's unique rules and processes. To get help now, use TaxCure to find a tax pro experienced with your concern.