N.D.C.C. § 57-02-08 — Property exempt from taxation

All property described in this section to the extent herein limited shall be exempt from
taxation:
1. All property owned exclusively by the United States except any such property which
the state and its political subdivisions are authorized by the laws of the United States
to tax.
2. All property owned by this state, but no lands contracted to be sold by the state shall
be exempt.
3. All property belonging to any political subdivision and the leasehold interest in property
leased by a political subdivision from another political subdivision.
4. Property of Indians if the title of that property is inalienable without the consent of the
United States secretary of the interior.
5. All lands used exclusively for burying grounds or cemeteries.
6. All property belonging to schools, academies, colleges, or other institutions of learning,
not otherwise used with a view to profit, and all dormitories and boarding halls,
including the land upon which they are situated, owned and managed by any religious
corporation for educational or charitable purposes for the use of students in
attendance upon any educational institution, if such dormitories and boarding halls are
not managed or used for the purpose of making a profit over and above the cost of
maintenance and operation.
7. Repealed by S.L. 2011, ch. 445, § 2.
8. Buildings and land belonging to institutions of public charity, including public hospitals
and nursing homes licensed pursuant to section 23-16-01 under the control of religious
or charitable institutions, as provided in this subsection. The exemption under this
subsection includes:
a. Buildings used wholly or in part for public charity, together with the land actually
occupied by the institutions not leased or otherwise used with a view to profit.
b. Up to fifty acres of undeveloped land owned by a public hospital or nursing home
licensed pursuant to section 23 -16-01 under the control of a religious or
charitable institution for the purpose of a future building belonging to the public
hospital or nursing home. The exemption under this subdivision expires ten years
after the taxable year in which the property was acquired by the public hospital or
nursing home if construction improvements to accommodate a building belonging
to the public hospital or nursing home have not commenced. For purposes of this
subdivision, "undeveloped land" includes land undergoing construction or
containing improvements to accommodate a building belonging to a public
hospital or nursing home licensed pursuant to section 23 -16-01 under the control
of a religious or charitable institution before the building is completed and suitable
for use.
c. A dormitory, dwelling, or residential -type structure, together with necessary land
on which such structure is located, owned by a religious or charitable
organization recognized as tax exempt under section 501(c)(3) of the United
States Internal Revenue Code which is occupied by members of said
organization who are subject to a religious vow of poverty and devote and donate
substantially all of their time to the religious or charitable activities of the owner.
9. a. The land and any buildings on a parcel on which a church building is located, and
which is owned by a religious corporation or organization and used predominantly
for the religious purposes of the organization , must be deemed to be property
used exclusively for religious purposes, and exempt from taxation. The land and
any buildings on a parcel contiguous to the parcel on which a church building is
located, which is owned by a religious corporation or organization, is exempt from
taxation if any building located on the parcel is used predominantly for religious
purposes.
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b. If the parsonage and residence of the bishop, priest, rector, minister, or other
clergy is located on property owned by the religious corporation or organization,
which is not adjacent to the church, that residence, with usual outbuildings and
land on which it is located, up to two acres [.81 hectare], must be deemed to be
property used exclusively for religious purposes and is exempt from taxation.
c. Up to twenty acres [8.09 hectares] of undeveloped land owned by a religious
corporation or organization for the purpose of a future church building or buildings
or parsonage and residence as provided in subdivision b is exempt from taxation.
This exemption expires ten years after the taxable year in which the property was
acquired by the religious corporation or organization if construction improvements
to accommodate a church building or parsonage and residence have not
commenced. For purposes of this subdivision, "undeveloped land" includes land
undergoing construction or containing improvements to accommodate a future
church building or parsonage and residence as provided in subdivision b before
the building or parsonage and residence is completed and suitable for use.
d. The exemption for a building used for the religious purposes of the owner
continues to be in effect if the building in whole, or in part, is rented to another
otherwise tax -exempt corporation or organization, provided no profit is realized
from the rent.
10. Property of an agricultural fair association duly incorporated for the purpose of holding
agricultural fairs, and not conducted for the profit of any of its members or
stockholders; provided, that all property described in this subsection shall be subject to
taxation for the cost of fire protection services furnished by any municipal corporation
in which said property is located.
11. Property owned by lodges, chapters, commanderies, consistories, farmers' clubs,
commercial clubs, and like organizations, and associations, grand or subordinate, not
organized for profit, and used by them for places of meeting and for conducting their
business and ceremonies, and all property owned by any fraternity, sorority, or
organization of college students if such property is used exclusively for such purposes;
provided, further, that any portion of such premises not exclusively used for places of
meeting and conducting the business and ceremonies of such organization shall be
subject to taxation.
Provided, further, that if any such organization as contemplated by this
subsection is licensed for the sale of alcoholic beverages as defined by the statutes of
the state of North Dakota, such portion of such premises where such alcoholic
beverages are consumed or sold shall be deemed not to be so used exclusively for
conduct of its business and meeting if such beverages are sold at a profit.
Provided, further, that if food other than that served at lodge functions and
banquets and food sold or consumed in any fraternity or sorority house, is sold at a
profit on the premises, that portion of the premises where such food is sold at a profit
shall be deemed not to be used exclusively for places of meeting or conducting the
business and ceremonies of such organization; provided, that all property described in
this subsection shall be subject to taxation for the cost of fire protection services
furnished by any municipal corporation in which said property is located.
12. Repealed by S.L. 1983, ch. 595, § 3.
13. All land used as a public park or monument ground belonging to any military
organization, and not used for gain.
14. The armory, and land or lots upon which situated, owned by a regiment, battalion, or
company of the North Dakota national guard, and used for military purposes by such
organization.
15. a. All farm structures and improvements located on agricultural lands.
(1) This subsection must be construed to exempt farm buildings and
improvements only, and may not be construed to exempt from taxation
industrial plants, or structures of any kind not used or intended for use as a
part of a farm plant, or as a farm residence.
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(2) "Farm buildings and improvements" includes a greenhouse or other building
used primarily for the growing of horticultural or nursery products from seed,
cuttings, or roots, if not used on more than an occasional basis for a
showroom for the retail sale of horticultural or nursery products. A
greenhouse or building used primarily for display and sale of grown
horticultural or nursery products is not a farm building or improvement.
(3) (a) The following structures and improvements are not exempt under this
subsection:
[1] Any structure or improvement used primarily in connection with a
retail or wholesale business other than farming;
[2] Any structure or improvement located on platted land within the
corporate limits of a city, except a structure owned by a farmer,
used exclusively for storage of harvested crops produced by the
farmer or a direct relative of the farmer until the crop is delivered
to the first end -point user, and affixed to land platted and
assessed as agricultural property prior to March 30, 1981;
[3] Any structure or improvement used by a manufacturing facility as
defined in section 19-24.1-01; and
[4] Any structure or improvement located on railroad operating
property subject to assessment under chapter 57-05.
(b) For purposes of this paragraph, "business other than farming"
includes processing to produce a value -added physical or chemical
change in an agricultural commodity beyond the ordinary handling of
that commodity by a farmer prior to sale.
(4) The following factors may not be considered in application of the exemption
under this subsection:
(a) Whether the farmer grows or purchases feed for animals raised on the
farm.
(b) Whether animals being raised on the farm are owned by the farmer.
(c) Whether the farm's replacement animals are produced on the farm.
(d) Whether the farmer is engaged in contract feeding of animals on the
farm.
b. It is the intent of the legislative assembly that this exemption as applied to a
residence must be strictly construed and interpreted to exempt only a residence
that is situated on a farm and which is occupied or used by a person who is a
farmer and that the exemption may not be applied to property which is occupied
or used by a person who is not a farmer. For purposes of this subdivision:
(1) "Farm" means a single tract or contiguous tracts of agricultural land
containing a minimum of ten acres [4.05 hectares] and for which the farmer,
actually farming the land or engaged in the raising of livestock or other
similar operations normally associated with farming and ranching, has
annual gross income from farming activities which is sixty-six percent or
more of annual gross income, including gross income of a spouse if married,
during any of the two preceding calendar years.
(2) "Farmer" means an individual who normally devotes the major portion of
time to the activities of producing products of the soil, with the exception of
marijuana grown under chapter 19 -24.1; poultry; livestock; or dairy farming
in such products' unmanufactured state and has received annual gross
income from farming activities which is sixty-six percent or more of annual
gross income, including gross income of a spouse if married, during any of
the two preceding calendar years. For purposes of this paragraph, "farmer"
includes a:
(a) "Beginning farmer", which means an individual who has begun
occupancy and operation of a farm within the two preceding calendar
years; who normally devotes the major portion of time to the activities
of producing products of the soil, poultry, livestock, or dairy farming in
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such products' unmanufactured state; and who does not have a
history of farm income from farm operation for each of the two
preceding calendar years.
(b) "Retired farmer", which means an individual who is retired because of
illness or age and who at the time of retirement owned and occupied
as a farmer the residence in which the person lives and for which the
exemption is claimed.
(c) "Surviving spouse of a farmer", which means the surviving spouse of
an individual who is deceased, who at the time of death owned and
occupied as a farmer the residence in which the surviving spouse lives
and for which the exemption is claimed. The exemption under this
subparagraph expires at the end of the fifth taxable year after the
taxable year of death of an individual who at the time of death was an
active farmer. The exemption under this subparagraph applies for as
long as the residence is continuously occupied by the surviving
spouse of an individual who at the time of death was a retired farmer.
(3) "Gross income" means gross income as defined under the federal Internal
Revenue Code and does not include a gain from the sale or exchange of
farm machinery as computed for federal income tax purposes. For purposes
of this paragraph, "farm machinery" means all vehicular implements and
attachment units designed and sold for direct use in planting, cultivating, or
harvesting farm products or used in connection with the production of
agricultural produce or products, livestock, or poultry on farms, which are
operated, drawn, or propelled by motor or animal power. "Farm machinery"
does not include vehicular implements operated wholly by hand or a motor
vehicle that is required to be registered under chapter 57-40.3.
(4) "Gross income from farming activities" means gross income from farming as
defined for purposes of determining if an individual is a farmer eligible to use
the special estimated income tax payment rules for farmers under section
6654 of the federal Internal Revenue Code [26 U.S.C. 6654].
(5) When exemption is claimed under this subdivision for a residence, the
occupant of the residence who it is claimed is a farmer shall provide to the
assessor for the year or years specified by the assessor a written statement
in which it is stated that sixty-six percent or more of the gross income of that
occupant, and spouse if married and both spouses occupy the residence,
was, or was not, gross income from farming activities. The individual
claiming the exemption also shall provide to the assessor, on a form
prescribed by the tax commissioner, the necessary income information to
demonstrate eligibility. Any income information provided to the assessor
regarding eligibility for an exemption claimed under this subdivision is a
confidential record.
(6) For purposes of this subsection, "livestock" includes "nontraditional
livestock" as defined in section 36-01-00.1.
(7) A farmer operating a bed and breakfast facility in the farm residence
occupied by that farmer is entitled to the exemption under this section for
that residence if the farmer and the residence would qualify for exemption
under this section except for the use of the residence as a bed and
breakfast facility.
16. Property now owned, or hereafter acquired, by a corporation organized, or hereafter
created, under the laws of this state for the purpose of promoting athletic and
educational needs and uses at any state educational institution in this state, and not
organized for profit.
17. Moneys and credits, including shares of corporate stock and membership interests in
limited liability companies, except moneyed capital which is so invested or used as to
come into direct competition with money invested in bank stock.
18. Repealed by S.L. 1983, ch. 595, § 3.
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19. Repealed by S.L. 1983, ch. 595, § 3.
20. Fixtures, buildings, and improvements up to the amount of valuation specified, when
owned and occupied as a homestead, as hereinafter defined, by any of the following
persons:
a. A paraplegic disabled veteran of the United States armed forces or any veteran
who has been awarded specially adapted housing by the department of veterans'
affairs, or the unremarried surviving spouse if such veteran is deceased, for the
first one hundred twenty thousand dollars of true and full valuation of the fixtures,
buildings, and improvements.
b. Any permanently and totally disabled person who is permanently confined to use
of a wheelchair, or, if deceased, the unremarried surviving spouse of a
permanently and totally disabled person. If the spouse of a permanently and
totally disabled person owns the homestead or if it is jointly owned by them, the
same reduction in assessed valuation applies as long as both reside thereon. The
provisions of this subdivision do not reduce the liability for special assessments
levied upon the homestead. The phrase "permanently confined to use of a
wheelchair" means that the person cannot walk with the assistance of crutches or
any other device and will never be able to do so and that a physician selected by
the local governing board has so certified.
Any person claiming an exemption under this subsection for the first time shall file
with the county auditor an affidavit showing the facts herein required and a description
of the property. The affidavit must be open for public inspection. A person thereafter
shall furnish to the assessor or other assessment officials when requested to do so
any information that is believed will support the claim for exemption for a subsequent
year.
For purposes of this subsection, and except as otherwise provided in this
subsection, "homestead" has the meaning provided in section 47 -18-01 except that it
also applies to any person who otherwise qualifies under the provisions of this
subsection whether or not the person is the head of a family. The board of county
commissioners is hereby authorized to cancel the unpaid taxes for any year in which
the qualifying owner has held title to the exempt property.
21. Repealed by S.L. 1983, ch. 595, § 3.
22. All or any part of fixtures, buildings, and improvements upon any nonfarmland up to a
taxable valuation of seven thousand two hundred dollars, owned and occupied as a
home by a blind person. Residential homes owned by the spouse of a blind person, or
jointly owned by a blind person and spouse, shall also be exempt within the limits of
this subsection as long as the blind person resides in the home. For purposes of this
subsection, a blind person is defined as one who is totally blind, has visual acuity of
not more than 20/200 in the better eye with correction, or whose vision is limited in
field so that the widest diameter subtends an angle no greater than twenty degrees.
The exemption provided by this subsection extends to the entire building classified as
residential, and owned and occupied as a residence by a person who qualifies for the
exemption as long as the building contains no more than two apartments or rental
units which are leased.
23. All, or any portion of structural improvements other than paving and surfacing to land
used exclusively for the business of operating an automobile parking lot within a city
open for general public patronage. If a portion of the structure is exempt from taxation
as being open for general public patronage, the amount of such exemption shall be
computed by determining the value of the public parking area in proportion to the total
value of the structure.
24. Repealed by S.L. 1983, ch. 595, § 3.
25. All personal property is exempt except:
a. Personal property of entities, other than railroads, required by section 4 of
article X of the Constitution of North Dakota to be assessed by the state board of
equalization.
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b. Any property that is subjected to a tax which is imposed in lieu of ad valorem
taxes.
c. Any particular kind or class of personal property, including mobile homes or
housetrailers, that is subjected to a tax imposed pursuant to any other provision
of law.
26. Fixtures, buildings, and improvements when owned and occupied as a homestead, as
hereinafter defined, by a paraplegic disabled person, or if the person is deceased the
unremarried spouse, if the income from all sources of the person and spouse, or if the
person is deceased the income from all sources of the unremarried surviving spouse,
in the calendar year prior to the year for which the exemption is claimed did not
exceed the maximum amount of income provided in section 57 -02-08.1 for receiving a
homestead credit under that section. To obtain the exemption for the first time, a
certificate from a medical doctor who is approved by the board of county
commissioners, accompanied by an affidavit, showing the facts herein required and a
description of the property, must be filed with the county auditor. The affidavit and
accompanying certificate must be opened to public inspection. Any person claiming
the exemption for any year after the first year shall furnish to the assessor or other
assessment officials when requested to do so any information which the person
believes will support the claim for the exemption for any subsequent year. For
purposes of this subsection, "homestead" has the meaning provided in section
47-18-01 except that it also applies to any person who otherwise qualifies under the
provisions of this subsection whether or not the person is the head of a family. The
board of county commissioners is hereby authorized to cancel the unpaid taxes for any
year in which the person has held title to the exempt property.
27. Installations, machinery, and equipment of systems in new or existing buildings or
structures, designed to provide heating or cooling or to produce electrical or
mechanical power, or any combination of these, or to store any of these, by utilization
of solar, wind, or geothermal energy; provided, that if the solar, wind, or geothermal
energy device is part of a system which uses other means of energy, only that portion
of the total system directly attributable to solar, wind, or geothermal energy shall be
exempt. Provided, however, that any exemptions granted by this subsection shall be
valid for a five -year period following installation of any such system and apply only to
locally assessed property. For the purposes of this subsection, solar or wind energy
devices shall have the meaning provided in section 57-38-01.8 and geothermal energy
device means a system or mechanism or series of mechanisms designed to provide
heating or cooling or to produce electrical or mechanical power, or any combination of
these, by a method which extracts or converts the energy naturally occurring beneath
the earth's surface in rock structures, water, or steam.
28. All fixtures, buildings, and improvements owned by any cooperative or nonprofit
corporation organized under the laws of this state and used by it to furnish potable
water to its members and customers for uses other than the irrigation of agricultural
land.
29. Property to which title is held by a city pursuant to chapter 40 -57 which is leased to an
entity described in subsection 8 and used by the entity as provided in subsection 8 or
subleased to a public school district for educational purposes; provided, that the entity
is qualified as an exempt organization under section 501(c)(3) of the United States
Internal Revenue Code of 1954, as amended.
30. Property, but not including property used for residential purposes, owned by an
organization described in subsection 9 and leased to a public school district for
educational purposes; provided, that the property had previously been owned and
occupied by the organization for an exempt purpose described in subsection 9 for a
period of at least five years.
31. All group homes owned by nonprofit corporations, not organized with a view to profit
and recognized as tax exempt under section 501(c)(3) of the United States Internal
Revenue Code [26 U.S.C. 501(c)(3)], including those for persons with developmental
disabilities as defined in section 25-01.2-01, and the real property upon which they are
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located during the period in which the group homes are under construction or in a
remodeling phase and while they are used as group homes. For the purposes of this
subsection, the term "group home" means a community -based residential home which
provides room and board, personal care, habilitation services, or supervision in a
family environment, and which, once established is licensed by the appropriate North
Dakota licensing authority.
32. Minerals in place in the earth which at the time of removal from the earth are then
subject to taxes imposed under chapter 57-51, 57-61, or 57-65.
33. Property used for athletic or recreational activities when owned by a political
subdivision and leased to a nonprofit corporation organized for the purpose of
promoting public athletic or recreational activities.
34. Any building located on land owned by the state if the building is used at least in part
for academic or research purposes by students and faculty of a state institution of
higher education.
35. Up to one hundred fifty thousand dollars of the true and full value of all new
single-family and condominium and townhouse residential property, exclusive of the
land on which it is situated, is exempt from taxation for the first two taxable years after
the taxable year in which construction is completed and the residence is owned and
occupied for the first time if all of the following conditions are met:
a. The governing body of the city, for property within city limits, or the governing
body of the county, for property outside city limits, has approved the exemption of
the property by resolution. A resolution adopted under this subsection may be
rescinded or amended at any time. The governing body of the city or county may
limit or impose conditions upon exemptions under this subsection, including
limitations on the time during which an exemption is allowed.
b. Special assessments and taxes on the property upon which the residence is
situated are not delinquent.
36. The governing body of the city, for property within city limits, or of the county, for
property outside city limits, may grant a property tax exemption for the portion of
fixtures, buildings, and improvements, used primarily to provide early childhood
services by a corporation, limited liability company, or organization licensed under
chapter 50-11.1 or used primarily as an adult day care center. The exemption applies
regardless of whether the early childhood or adult day care service provider owns the
property. However, this exemption is not available for property used as a residence.
37. a. A pollution abatement improvement. As used in this subsection, "pollution
abatement improvement" means property, exclusive of land and improvements to
the land such as ditching, surfacing, and leveling, that is:
(1) Part of an agricultural or industrial facility which is used for or has for its
ultimate purpose the prevention, control, monitoring, reducing, or eliminating
of pollution by treating, pretreating, stabilizing, isolating, collecting, holding,
controlling, measuring, or disposing of waste contaminants; or
(2) Part of an agricultural or industrial facility and required to comply with local,
state, or federal environmental quality laws, rules, regulations, or standards.
b. The exemption under this subsection applies only to that portion of the valuation
of property attributable to the pollution abatement improvement on which
construction or installation was commenced after December 31, 1992, and does
not apply to the valuation of any property that is not a necessary component of
the pollution abatement improvement. The governing body of the city, for property
within city limits, or the governing board of the county, for property outside city
limits, shall determine whether the property proposed for exemption is a pollution
abatement improvement and may grant an exemption for the pollution abatement
improvement based upon the requirements of this subsection.
38. Property owned by the state upon which payments in lieu of property taxes are made
by the state.
39. Notwithstanding any other law, all property, including any possessory interest therein,
relating to any waterworks, mains, and water distribution system leased to the state, or
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any agency or institution of the state, or to a private entity pursuant to subsection 5 of
section 40 -33-01, subsection 12 of section 61 -24.5-09, or subsection 23 of section
61-35-12, which property is operated by, or providing services to, a municipality or
other political subdivision or agency of the state, or its citizens.
40. Notwithstanding any other law, all property, including any possessory interest therein,
relating to any sewage systems and facilities for the collection, treatment, purification,
and disposal in a sanitary manner of sewage leased to the state, or any agency or
institution of the state, or to a private entity pursuant to section 40 -34-19 or
subsection 23 of section 61-35-12, which property is operated by, or providing services
to, a municipality or other political subdivision or agency of the state, or its citizens.
41. Notwithstanding any other law, all property, including any possessory interest therein,
leased to a private entity pursuant to section 54 -01-27, which property is operated by,
or providing services to, the state or its citizens.
42. a. New single-family residential property, exclusive of the land on which it is
situated, is exempt from assessment for the taxable year in which construction
began and the next two taxable years, if the property remains owned by the
builder, remains unoccupied, and all of the following conditions are met:
(1) The governing body of the city, for property within city limits, or the
governing body of the county, for property outside city limits, has approved
the exemption of property under this subsection by resolution. A resolution
adopted under this subsection may be rescinded or amended at any time.
The governing body of the city or county may limit or impose conditions
upon exemptions under this subsection, including limitations on the time
during which an exemption is allowed.
(2) Special assessments and taxes on the property upon which the residence is
situated are not delinquent.
b. A builder is eligible for exemption of no more than ten properties under this
subsection in a taxable year within each jurisdiction that has approved the
exemption under this subsection. For purposes of this subsection, "builder"
includes an individual who builds that individual's own residence.
43. All residential rental property, inclusive of land and administrative and auxiliary
buildings, used as affordable housing shall be exempt from taxation for the property's
period of affordability.
a. The property is exempt under this section if the housing finance agency certifies
to the county director of tax equalization that on January 1, 2013, or thereafter,
the residential rental property complies with the following:
(1) The property is subject to and in compliance with a land use restriction
agreement that enumerates the mandatory income and rent restrictions;
(2) The property is owned by a qualified nonprofit entity, as defined in
section 42 of the Internal Revenue Code [26 U.S.C. 42]. If under a
partnership agreement or other legally enforceable instrument, a for -profit
entity, such as a limited partner, has an ownership interest in the property,
then the agreement must provide that the nonprofit entity must have the
right of first refusal in any transfer of the ownership interest in the property.
The partnership agreement or other legally enforceable instrument also
must provide that any transfer of the ownership interest by the for -profit
entity must be without financial gain; and
(3) The general partner or other ownership entity is owned or controlled by a
nonprofit entity or a political subdivision.
b. For projects beginning after December 31, 2012, the exemption begins for the
first taxable year after the owners of the rental property receive a building permit
from the local jurisdiction in which the affordable housing residential rental
property will be located.
c. If part of the residential rental property is not eligible to receive assistance
through local, state, or federal affordable housing programs, the exemption under
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this section is calculated by dividing the number of income and rent -restricted
units by the total number of rental units.
d. In lieu of the ad valorem taxes that would otherwise be assessed, the project
owners shall make a payment equal to five percent of the balance of the total
annual rents collected during the preceding calendar year, minus the utility costs
for the property paid by the owner of the property.
e. If an affordable housing rental property fails to comply with the requirements of
this section, or fails to comply with rent and household income restrictions under
a local, state, or federal affordable housing program, on or before March fifteen of
each calendar year, the housing finance agency shall notify the director of tax
equalization and the state supervisor of assessments that the property is no
longer eligible for the exemption.
f. For the purposes of this subsection, "affordable housing" includes property
eligible for or receiving assistance through a local, state, or federal affordable
housing program and in which rent and household income restrictions apply, and
which is owned by nonprofit entities organized for the purpose of providing
affordable housing. Affordable housing is limited to residential rental property
owned by or with a controlling ownership or management interest by an
organization organized and operated exclusively for exempt purposes set forth in
section 501(c)(3) of the Internal Revenue Code [26 U.S.C. 501(c)(3)].