North Dakota Research and Experimental Expenditures Credit

Program Overview

North Dakota provides a research and experimental expenditures credit with a higher rate applied to the first tranche of qualifying research spending above the applicable base amount and a lower rate applied to additional qualifying expenses. Certain eligible businesses that have not yet reached profitability may apply to the North Dakota Department of Commerce to transfer a statutory amount of unused credits to another North Dakota taxpayer, subject to certification and other program requirements. The credit generally follows federal Section 41 definitions for qualifying research conducted in North Dakota.

Eligibility

• Corporations and individuals with qualified research expenses associated with research conducted in North Dakota may qualify.
• Qualifying research activities and expenditures must meet applicable North Dakota requirements.
• Businesses seeking to transfer unused credits must meet the applicable requirements for certification as a qualified research and development company.
• Additional eligibility requirements may apply to businesses seeking to transfer credits, including applicable industry and profitability requirements.

Benefits

• Non-refundable credit against North Dakota income tax.
• A higher credit rate applies to the first applicable tranche of qualifying research expenditures, with a lower rate applying above that threshold.
• Certain certified businesses may transfer unused credits to another North Dakota taxpayer, subject to statutory limits and program requirements.