North Dakota LLC: a low-friction home-state filing
$135 to file, $50 annual report, some of the lowest individual income tax rates in the country, and a well-designed Secretary of State portal. Why North Dakota works for residents.
Contents 10 sections
orth Dakota is a small, competently run state for formation: $135 to file an LLC, a $50 annual report due on the anniversary month, a responsive Secretary of State, and a moderate corporate income tax. Nobody picks North Dakota for tax arbitrage — the state's appeal is that if you live or operate there (Bakken energy, Fargo's growing tech scene, agricultural operations), forming at home is cheap, simple, and free of the regulatory games larger states play.
The short version
Filing facts at a glance
| Item | Value |
|---|---|
| LLC filing fee | $135 (Articles of Organization) |
| Corporation filing fee | $100 (Articles of Incorporation) |
| Annual report fee | $50 for LLCs |
| Annual report due | November 15 each year (anniversary-based for some entities) |
| Filing office | ND Secretary of State, Business Services Division |
| Online filing | Yes — sos.nd.gov/business — FirstStop portal |
| Processing time | 5–10 business days; 24-hour expedite $100 |
| Registered agent | Required; physical ND street address |
| Corporate income tax | 1.41% / 3.55% / 4.31% (graduated) |
| Individual income tax | 1.1% / 2.04% / 2.27% (graduated); low, and dropping |
Why North Dakota works well for residents
North Dakota ranks consistently high on the Tax Foundation's State Business Tax Climate Index — often in the top 20 overall, and top 10 for individual income tax. The state runs a budget surplus driven by Bakken oil revenues and has used some of that money to reduce individual income tax rates repeatedly over the last decade. For an LLC passthrough owner who is an ND resident, the combined federal + state individual tax burden is among the lower in the country.
The FirstStop portal is one of the better-executed state business services sites. You can register an entity, file annual reports, register for sales tax, and coordinate with the ND Workforce Safety & Insurance (workers' compensation monopoly) from a single account.
Taxes in North Dakota
Corporate income tax
Graduated rates for C-corps: 1.41% on the first $25,000, 3.55% on the next $25,000, 4.31% on income above $50,000. These are moderate — lower than most states, higher than the handful of zero-tax states (Texas, Wyoming, South Dakota next door). For small operating C-corps, the effective rate is modest.
Individual income tax
Graduated personal rates: 1.1% up to $41,775, 2.04% up to $101,050, and 2.27% above that (for single filers, 2026). These are the lowest individual income tax rates in the country among states that have an income tax. Passthrough LLC income hits these rates on the ND-resident member's return.
Sales and use tax
North Dakota imposes a 5% state sales tax with local add-ons up to roughly 3.5%. Vendors selling into ND register through the Taxpayer Access Point.
Oil extraction and production taxes
These are specific to energy operations — the 5% oil gross production tax plus a 5% oil extraction tax. Irrelevant to most LLCs but dominant for any Bakken-focused entity.
How to file a North Dakota LLC, step by step
- Pick a name. Must include "Limited Liability Company," "LLC," or "L.L.C." Search via the FirstStop portal.
- Appoint a registered agent. Physical ND address required. Members or managers may serve as the agent.
- File the Articles of Organization through FirstStop. Fee: $135. Required: name, registered agent, principal office, organizer, member/manager structure.
- Draft an operating agreement. Not filed with the state; required by banks and sound practice.
- Get an EIN from the IRS. Free, online.
- Check federal BOI status. Check FinCEN BOI current status — a March 2025 interim rule exempted U.S.-formed entities, though rules have been litigated. File only if required for your entity type.
- Register for sales and use tax through the ND Office of State Tax Commissioner if you sell taxable goods or taxable services.
- Register with ND Workforce Safety & Insurance if you hire employees. WSI is a state-monopoly workers' compensation system — you cannot buy private workers' comp coverage in ND.
- Set a November 15 calendar alert for the annual report.
Ongoing compliance
- Annual report by November 15. $50. Filed through FirstStop.
- State income tax return — Form 58 for LLCs filing as partnerships, Form 60 for LLCs as corporations, plus the individual ND return for passthrough owners.
- Sales tax returns if registered — quarterly or monthly.
- WSI premium calculated on payroll, billed annually.
- Federal BOI updates within 30 days of ownership changes.
When North Dakota is the right call
- You live in ND. Obvious. The compliance cost is low, the tax burden is low, and the Secretary of State works well.
- You are operating in the Bakken. Oil and gas service entities, trucking, lodging, and support services for the energy sector are best incorporated where they operate. ND's nexus rules will pull them in regardless, so form domestically.
- You have agricultural operations in ND, including the specialized farm LLC and ag cooperatives governed by the ND Century Code — state-specific statutes make local formation materially easier than foreign qualification.
When to look elsewhere
- Non-resident, no ND operations. There is no tax or privacy reason to form in ND if you will not live or do business there. Delaware, Wyoming, or your home state will serve you better.
- Privacy focus. ND requires principal-office and member/manager disclosure in standard filings — not anonymous. New Mexico or Wyoming is the right fit.
- Venture-backed startup. Delaware C-corp remains standard.
North Dakota versus the neighbors
- South Dakota has zero state income tax (individual or corporate) and is routinely ranked among the most business-friendly states. For a non-operating holding LLC where any member might relocate, SD edges out ND. For operating businesses physically in ND, the difference disappears in apportionment.
- Montana has no sales tax — advantageous for high-ticket retail. MT has higher individual income tax than ND. Different trade-off set.
- Minnesota is materially more expensive on individual income tax (top rate 9.85%) and on LLC compliance overhead. ND wins for residents on the border who have flexibility in where they establish domicile.
The bottom line
North Dakota does not advertise itself as a formation state, and it is not trying to be one. It is a reasonable, low-friction domicile for founders who live there, run operations there, or need an entity to hold ND-situated assets. The fees are low, the administration is competent, and the individual income tax rates are nationally competitive. If you are building a business in Fargo, Bismarck, Minot, or anywhere else in the state, form at home.
See related guides on our States index.