Contractors

A contractor or subcontractor installing materials into real property located in North Dakota must pay sales or use tax on those materials regardless of who owns them. If the materials are sold for installation into real property located outside of this state, sales or use tax must be paid if such sales would be subject to tax in the state of attachment. For example, delivery of tangible personal property within this state to a South Dakota contractor for installation in South Dakota is subject to tax because the delivery of tangible personal property to a North Dakota contractor in South Dakota would be subject to tax there. This also applies to a contractor or subcontractor engaged in retail sales who removes all or part of the machinery, equipment, material, or supplies used in carrying out a contract from stock purchased for resale. A contractor or subcontractor is subject to sales tax on the cost of any items incorporated into or used in assembling articles used or consumed in carrying out a construction contract. A business which holds a contractor's license issued by the North Dakota secretary of state may not contract with itself to install material into real property. A contractor or subcontractor who purchases or takes possession of construction material in North Dakota for its own use in another state must pay North Dakota sales or use tax on the goods. For purposes of this rule, the terms "contractor" and "subcontractor" have the meaning ascribed to the term "contractor" in subsection 3 of North Dakota Century Code section 43-07-01. This rule applies to any person thus defined as a "contractor", regardless of whether the person is licensed under North Dakota Century Code chapter 43-07.