Section 57-40.2-04 - ExemptionsThis chapter hereby is declared to be an independent and separate tax law but complementary to the retail sales tax laws of this state provided for by chapter 57-39.2 and does not apply to:
1. Any tangible personal property or taxable service upon the sale of which the retail sales tax imposed by chapter 57-39.2 has been collected by a retailer holding the permit prescribed by section 57-39.2-14.2. Tangible personal property brought into this state by a nonresident thereof for that person's own storage, use, or consumption while temporarily within this state, except that such property is not exempt if brought into this state for storage, use, or consumption in the conduct of a trade, occupation, business, or profession.3. Any motor vehicle either subject to or expressly exempted from the motor vehicle excise taxes imposed by chapter 57-40.3.4. Tangible personal property upon which the state now imposes and collects a special tax, whether in the form of license tax, stamp tax, or otherwise.5. Railway cars and locomotives used in interstate commerce, and tangible personal property which becomes a component part thereof.6. Newsprint and ink actually used in the publication of a newspaper.7. Repealed by S.L. 1981, ch. 582, § 3.8. Gross receipts from the leasing or renting of motion picture film to motion picture exhibitors for exhibition in this state if the sale of the tickets or admissions to the exhibition of the film is subject to the sales tax imposed by chapter 57-39.2.9. Adjuvants, agrichemical tank cleaners and foam markers, commercial fertilizers, fungicides, seed treatments, inoculants and fumigants, herbicides and insecticides used by agricultural or commercial vegetable producers and commercial applicators; chemicals used to preserve agricultural crops being stored; and seeds, roots, bulbs, and small plants used by commercial users or consumers for planting or transplanting for commercial vegetable gardens or agricultural purposes.10. Gross receipts from the leasing, or renting, for residential housing, for periods of more than thirty consecutive days, of manufactured homes, modular living units, or sectional homes, whether or not placed on a permanent foundation.11. Bibles, hymnals, textbooks, and prayerbooks used by nonprofit religious organizations.12. Gross receipts from sales of prosthetic devices, durable medical equipment, or mobility-enhancing equipment. For purposes of this subsection:a. "Durable medical equipment" means equipment, not including mobility-enhancing equipment, for home use, including repair and replacement parts for such equipment, which: (1) Can withstand repeated use;(2) Is primarily and customarily used to serve a medical purpose;(3) Generally is not useful to a person in the absence of illness or injury; and(4) Is not worn in or on the body. "Durable medical equipment" includes equipment and devices designed or intended for ostomy care and management and equipment and devices used exclusively for a person with bladder dysfunction. An exemption certificate is not required to obtain exemption. Repair and replacement parts as used in this definition include all components or attachments used in conjunction with the durable medical equipment. Repair and replacement parts do not include items which are for single patient use only.
b. "Mobility-enhancing equipment" means equipment not including durable medical equipment sold under a doctor's written prescription, including repair and replacement parts for mobility-enhancing equipment, which:(1) Is primarily and customarily used to provide or increase the ability to move from one place to another and which is appropriate for use either at home or in a motor vehicle;(2) Is not generally used by a person with normal mobility; and(3) Does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer. "Mobility-enhancing equipment" includes crutches and wheelchairs for the use of disabled persons, equipment, including manual control units, van lifts, van door opening units, and raised roofs for attaching to or modifying a motor vehicle for use by a permanently physically disabled person, equipment, including elevators, dumbwaiters, chair lifts, and bedroom or bathroom lifts, whether or not sold for attaching to real property, for use by a permanently physically disabled person in that person's principal dwelling, and equipment, including manual control units, for attaching to or modifying motorized implements of husbandry for use by a permanently physically disabled person.
c. "Prosthetic device" means a replacement, corrective, or supportive device sold under a doctor's written prescription, including repair and replacement parts for such a device, worn on or in the body to: (1) Artificially replace a missing portion of the body;(2) Prevent or correct a physical deformity or malfunction; or(3) Support a weak or deformed portion of the body. "Prosthetic device" includes artificial devices individually designed, constructed, or altered solely for the use of a particular disabled person so as to become a brace, support, supplement, correction, or substitute for the bodily structure, including the extremities of the individual, artificial limbs, artificial eyes, hearing aids, and other equipment worn as a correction or substitute for any functioning portion of the body, artificial teeth sold by a dentist, and eyeglasses when especially designed or prescribed by an ophthalmologist, physician, oculist, or optometrist for the personal use of the owner or purchaser.
d. "Supplies for ostomy care or bladder dysfunction" includes: (1) Supplies designed or intended for ostomy care and management, including collection devices, colostomy irrigation equipment and supplies, skin barriers or skin protectors, and other supplies especially designed for use of ostomates.(2) Supplies to be used exclusively by a person with bladder dysfunction, including catheters, collection devices, incontinence pads and pants, adult diapers, and other items used for the care and management of bladder dysfunction. For the purposes of this paragraph:(a) "Adult diapers" means diapers other than children's diapers.(b) "Children's diapers" means diapers marketed to be worn by children.(c) "Diaper" means an absorbent garment worn by humans who are incapable of, or have difficulty, controlling their bladder or bowel movements.13. Purchases of electricity.14. The leasing or renting of any tangible personal property upon which a North Dakota sales tax or use tax has been paid under the election of the purchaser under subsection 21 of section 57-39.2-01 or subsection 5 of section 57-40.2-01 and the retailer has separately indicated on an invoice, contract, lease agreement, or other supporting sale document that the retailer paid sales or use tax on the retailer's purchase of the tangible personal property.15. Any tangible personal property or service which would be exempt from the retail sales tax pursuant to an express exemption provided in chapter 57-39.2 if it were purchased in North Dakota.16. Gross receipts from the sale of money, including all legal tender coins and currency.17. Gross receipts from sales to nonprofit voluntary health associations which are exempt from federal income tax under section 501(c)(3) of the United States Internal Revenue Code [26 U.S.C. 501(c)(3)]. As used in this subsection, a voluntary health association is an organization recognized by the internal revenue service, the national health council, the state tax commissioner, and the North Dakota secretary of state as a nonprofit organization that is exempt under section 501(c)(3) of the United States Internal Revenue Code and meets the following requirements: It has been organized and operated exclusively in providing services for the purposes of preventing and alleviating human illness and injury. Methods used to obtain these goals would include education, research, community service, and direct patient services, income being derived solely from private donations with some exceptions of a minimal membership fee. Its members are not limited to only individuals who themselves are licensed or otherwise legally authorized to render the same professional services as the organization. The disbursement of funds within a volunteer health association is to be controlled by a board of directors who work voluntarily and without pay.18. Gross receipts from the sale of a manufactured home that has been sold, bargained, exchanged, given away, or transferred by the person who first acquired it from a retailer in a sale at retail and upon which the North Dakota use tax has previously been imposed.19. The donation by a retailer of tangible personal property to an organization exempt from federal income tax under section 501(c)(3) of the United States Internal Revenue Code [26 U.S.C. 501(c)(3)].20. Air carrier transportation property subject to ad valorem property taxation pursuant to the provisions of chapters 57-06, 57-07, 57-08, 57-13, and 57-32.21. Tangible personal property consisting of flight simulators or mechanical or electronic equipment for use in association with a flight simulator.22. Gross receipts from the initial sale of beneficiated coal.23. Gross receipts from electronic games of chance licensed by the attorney general under chapter 53-06.1.24. Gross receipts from sales of carbon dioxide used for enhanced recovery of oil or natural gas or secure geologic storage.25. Gross receipts from the sale of items delivered electronically, including specified digital products. For purposes of this subsection:a. "Specified digital products" means:(1) "Digital audio-visual works" which means a series of related images which, when shown in succession, impart an impression of motion, together with accompanying sounds, if any;(2) "Digital audio works" which means works that result from the fixation of a series of musical, spoken, or other sounds, including ringtones; and(3) "Digital books" which means works that are generally recognized in the ordinary and usual sense as books.b. For purposes of the definition of "specified digital products", "transferred electronically" means obtained by the purchaser by means other than tangible storage media.c. For purposes of the definition of "digital audio works", "ringtones" means digitized sound files that are downloaded onto a device and which may be used to alert the customer with respect to a communication.d. "Specified digital products" may not be construed to include prewritten computer software as that term is defined in subdivision g of subsection 1 of section 57-39.2-02.1. 26.[Effective upon congingency - see note] Gross receipts from sales of liquified natural gas used for agricultural, industrial, or railroad purposes as defined in section 57-43.2-01. 27. Gross receipts from sales to a senior citizen organization that provides informational, health, welfare, counseling, and referral services for senior citizens in this state if the senior citizen organization: a. Is recognized by the internal revenue service as having exempt status under 26 U.S.C. 501(c)(3);b. Is recognized by the secretary of state as a charitable organization; andc. Either: (1) Provides services through the aging services division of the department of health and human services; or(2) Receives grant funds through the department of transportation under the federal transit administration's enhanced mobility of seniors and individuals with disabilities program [49 U.S.C. 5310]27.a. Gross receipts from sales to a senior citizen organization that provides informational, health, welfare, counseling, and referral services for senior citizens in this state if the senior citizen organization: (1) Is recognized by the internal revenue service as having exempt status under 26 U.S.C. 501(c)(3); (2) Is recognized by the secretary of state as a charitable organization; and(3) Either: (a) Provides services through the aging services division of the department of health and human services; (b) Receives grant funds through the department of transportation which are used for enhanced mobility of seniors and individuals with disabilities ; or(c) Provides services through a contract with the department of health and human services as a program of all- inclusive care for the elderly.b. The department of health and human services and the department of transportation shall notify the tax commissioner if a senior citizen organization no longer meets the criteria in paragraph 3 of subdivision a. Amended by S.L. 2023, ch. 548 (HB 1210),§ 2, eff. for taxable events beginning 7/1/2023.Amended by S.L. 2021 , ch. 471( SB 2152 ), § 2, eff. 7/1/2021 for taxable events beginning after 6/30/2021.Amended by S.L. 2021 , ch. 472( HB 1351 ), § 2, eff. for taxable events beginning 7/1/2021.Amended by S.L. 2019 , ch. 477( SB 2089 ), § 15, eff. 7/1/2019.Amended by S.L. 2015 , ch. 452( HB 1110 ), § 2, eff. 7/1/2015.Amended by S.L. 2013 , ch. 459( HB 1410 ), § 4, eff. upon receipt of certification by the tax commissioner from the plant owner that construction of the gas liquefaction plant eligible for the exemptions under sections 57-39.2-04.10 and 57-40.2-03.3 is complete.Amended by S.L. 2013 , ch. 458( SB 2090 ), § 5, eff. 7/1/2013.Amended by S.L. 2011 , ch. 467( HB 1424 ), § 5, eff. 4/27/2011.