North Dakota Administrative Code › Title 81 - Tax Commissioner › Article 81-05.1 - Motor Vehicle Excise Tax › Chapter 81-05.1-01 - Motor Vehicle Excise Tax › Section 81-05.1-01-03 - Exemptions

Current through Supplement No. 393, July, 2024
The following are exempt from payment of the North Dakota
				  motor vehicle excise tax:
1. Any two
				motor vehicles owned by or leased and in the possession of a disabled veteran
				pursuant to conditions set forth in North Dakota Century Code section
				57-40.3-04.
2. Any motor vehicle owned by or in
				possession of the federal or state government, including any state institution,
				or a political subdivision thereof.
3. Motor carrier vehicles in excess of twenty
				thousand pounds [9071.85 kilograms] gross weight, whether owned or leased,
				engaged in interstate commerce but only to the extent their revenue from
				interstate hauling bears to their total revenue from hauling for the preceding
				operating year.
For the purpose of properly administering this exemption, the
				  percentage allowed as an exemption to carriers is derived from figures included
				  in either the auto transportation utility annual report or the agricultural
				  carrier annual report. One of those reports must be filed annually by each
				  carrier registered with the North Dakota public service commission. When
				  completing the required report, the carrier must include figures which indicate
				  gross income from freight or passenger transport during the preceding calendar
				  year as well as income from strictly intrastate transport for that year. No
				  exemption is allowed until the required report is filed with the North Dakota
				  public service commission.
When one person owns or leases two or more motor carrier
				  vehicles over twenty thousand pounds [907l.85 kilograms], the receipts from all
				  such vehicles will be used when figuring the percentage of revenue earned from
				  interstate and intrastate transport for motor vehicle excise tax purposes.
When the person responsible for payment of the motor vehicle
				  excise tax has not owned or leased such a motor carrier vehicle during the
				  preceding year, no exemption is allowed at the time of titling it with the
				  motor vehicle division, unless that person purchases a business which received
				  revenue from interstate hauling in the preceding year. The exemption will be
				  allowed only if there are no substantial changes intended which would affect
				  the percentage of interstate hauling done by the business. No exemption will be
				  allowed to persons responsible for the motor vehicle excise tax on the basis of
				  projected miles of interstate transport for a future year or years. A person
				  who purchases or leases such a motor carrier vehicle for use in interstate
				  commerce but who did not own or lease such a vehicle for interstate commerce
				  use during the preceding year will not be allowed an exemption at the time of
				  titling the vehicle with the motor vehicle division, but after using it one
				  year in interstate commerce, that person may apply for a refund for that part
				  of the tax attributed to use in interstate commerce as determined in accordance
				  with this section.
Private motor carriers and those agricultural carriers who
				  are not required to file an annual report with the public service commission
				  are eligible for the interstate exemption when titling motor carrier vehicles
				  of at least twenty thousand pounds [907l.85 kilograms] gross weight. However,
				  owners must submit a signed affidavit to the motor vehicle division indicating
				  the percentage of gross revenue they received during the preceding calendar
				  year from interstate transport of passengers or freight in such vehicles. These
				  carriers' records will be subject to audit by the North Dakota tax department
				  to substantiate figures claimed on the affidavit. The percentage of gross
				  revenue refers to the gross revenue from freight or passenger transport.
4. Any motor vehicle
				transferred without consideration to or from a person within thirty days prior
				to that person's entering into, within thirty days after discharge from, or
				while serving in the armed services of the United States, provided the person
				certifies to the motor vehicle division that the transfer is made for one of
				those reasons.
Members of the armed forces on active military duty within
				  this state are liable for payment of motor vehicle excise tax when titling a
				  vehicle in this state.
Any motor vehicle purchased by a North Dakota resident who is
				  a member of the armed forces and is stationed out of state may title that
				  vehicle in this state but is exempt from payment of excise tax provided the
				  vehicle is not intended for use in this state.
5. Motor vehicles acquired by inheritance
				from or by bequest of a decedent who owned it; the transfer of motor vehicles
				which were previously titled or licensed in the names of two or more joint
				tenants and subsequently transferred without monetary consideration to one or
				more of the joint tenants; the transfer of motor vehicles by way of gift
				between a husband and wife, parent and child, or brothers and sisters.
This exemption includes title changes for motor vehicles as a
				  result of name changes due to adoption, court order, marriage, or divorce.
6. Motor vehicles
				transferred between a lessee and a lessor, provided that the lessee has been in
				continuous possession of such vehicle for a period of one year or longer, and
				provided that the lessor has paid the tax based on the purchase price of the
				vehicle at the time of titling. This exemption does not include motor vehicles
				transferred between a lessee and a lessor, on or after July 1, 2001, for a
				period of one year or more and having an actual vehicle weight of ten thousand
				pounds [4535.92 kilograms] or less.
7. Any motor vehicle in the possession of and
				used as a bus exclusively by a nonprofit senior citizens' or handicapped
				persons' corporation, provided that such bus is not used for commercial
				activities.
8. Any motor vehicle
				which does not exceed ten thousand pounds [4535.92 kilograms] gross weight and
				which is acquired by a permanently physically disabled licensed driver who is
				restricted to operating only motor vehicles equipped with special controls to
				compensate for the disability, or by a permanently physically disabled
				individual who has either surrendered or who has been denied an operator's
				license because of a permanent physical disability, provided the individual
				obtains from the state highway commissioner or an authorized representative a
				statement that either the individual has such a restricted operator's license,
				or has surrendered the license, or one has not been issued because of a
				permanent physical disability.
9.
				Any motor vehicle being registered pursuant to North Dakota Century Code
				chapter 39-04 for the first time by a person who manufactured or assembled the
				motor vehicle for that person's own use, except when such vehicle is
				manufactured by a manufacturer of motor vehicles as defined in subsection 32 of
				North Dakota Century Code section
				39-01-01.
10. Motor vehicles purchased or leased and in
				the possession of a parochial or a private nonprofit school to be used for the
				transportation of students. This exemption includes motor vehicles used for
				driver education instruction. The vehicles may not be used in a commercial
				activity, and the school must normally maintain a regular faculty and a
				curriculum approved by the department of public instruction and must have a
				regularly organized body of students.
11. Housetrailers or mobile homes subject to
				the sales and use tax. Travel trailers are not exempt.
12. Motor vehicles transferred within one
				hundred eighty days from the effective date as the result of the following
				partnership transactions:
a. Motor vehicles
				licensed in the name of an individual who is a member of a general or limited
				partnership transferred to the partnership at the time the partnership is
				established.
b. Motor vehicles
				licensed in the name of a general or limited partnership transferred to an
				individual who is a member of such partnership at the time the partnership is
				terminated.