North Dakota Administrative Code › Title 81 - Tax Commissioner › Article 81-01 - General Administration › Chapter 81-01-01 - Organization of Department › Section 81-01-01-02 - Organization and functions of the North Dakota tax department

Current through Supplement No. 393, July, 2024
1.
History.
During the period from 1890 to 1912 the functions
				currently performed by the tax commissioner were performed by the state
				auditor. From January 1912 to August 1, 1919, a nonpartisan tax commission
				composed of three commissioners appointed by the governor, by and with the
				advice and consent of the senate, administered the tax laws on the state level.
				Beginning August 1, 1919, these duties were assumed by a governor-appointed tax
				commissioner who served a six-year term. The appointment was subject to
				approval by the senate. The present office of tax commissioner was created by
				an amendment of section 12 of article V of the Constitution of North Dakota
				which was approved by the voters at a statewide election held on June 25, 1940.
				These provisions are now found in section 2 of article V of the Constitution of
				North Dakota. Section 4 of article V of the Constitution of North Dakota
				provides that the tax commissioner must be at least twenty-five years old and
				must have the qualifications of a state elector. Under section 5 of article V
				of the Constitution of North Dakota the tax commissioner is elected for a
				four-year term. The first tax commissioner was elected at the fall election of
				1940 and took office in January 1941.
2.
Divisions.
The tax department
				consists of the following six divisions:
a.
				Commissioner's division. The commissioner's division is responsible for the
				general administration of the tax department. This division also serves as the
				tax department's primary research, communication, and public information
				center. Management planning and human resource administration are under direct
				control of the commissioner's division. The tax commissioner is assisted by the
				deputy commissioner, research and communications section staff, an executive
				assistant, a human resource officer, and other staff.
b. Fiscal management division. The fiscal
				management division of the tax department consists of two sections: accounting
				and procurement. The accounting section maintains records of tax revenue and
				tax department expenditures, maintains inventory records of fixed assets and
				bonds, processes accounts receivable payments, prepares the tax department
				executive budget, and maintains an internal budget. The procurement section is
				responsible for the purchase of office supplies and equipment, secures
				contracts for services and maintenance of equipment, procures tax department
				printing goods and services, and secures leases for office space and
				equipment.
c. Legal division. The
				legal division of the tax department is comprised of attorneys who research and
				prepare opinions answering tax-related questions posed by the commissioner,
				legislators, tax department staff, other officials, and citizens; who draft
				proposals for changes in tax laws; who conduct all litigation for the tax
				department and the state board of equalization; and who help draft rules and
				regulations for the administration of the various state taxes. The legal
				division serves in an advisory capacity to the commissioner so that the
				creation of new and changes in policy, procedures, and administration comply
				with state laws.
d. Tax
				administration division. The tax administration division consists of eight
				sections: individual income and withholding taxes; corporate income taxes;
				sales and special taxes compliance; sales and special taxes audit; motor fuels,
				oil and gas, and estate taxes; registration; taxpayer services; and
				collections.
The individual income and withholding tax section is
				  responsible for the administration of North Dakota Century Code chapters 57-38,
				  57-38.1, 57-38.3, 57-38.5, and 57-38.6, pertaining to individual income taxes
				  and passthrough entities, the Uniform Division of Income Tax Act, setoff of
				  income tax refunds, seed capital investment tax credit, and agricultural
				  business investment tax credit.
The corporate income tax section is responsible for the
				  administration· of North Dakota Century Code chapters 57-38, 57-38.1,
				  57-38.4, 57-38.5, and 57-38.6, pertaining to corporate income taxes, the
				  Uniform Division of Income Tax Act, water's edge election method, seed capital
				  investment tax credit, and agricultural business investment tax credit. This
				  section is also responsible for administration of North Dakota Century Code
				  chapter 57-59, pertaining to the multistate tax compact.
Both the individual and corporate income tax sections review
				  tax returns, perform audits and other compliance projects, and provide taxpayer
				  assistance.
The sales and special taxes compliance and audit sections are
				  responsible for the administration of the following chapters of the North
				  Dakota Century Code, which are primarily related to retail sales: chapter
				  57-34, gross receipts tax on telecommunications carriers; chapter 57-39.2,
				  retail sales tax; chapter 57-39.4, streamlined sales and use tax agreement;
				  chapter 57-39.5, farm machinery gross receipts tax; chapter 57-39.6, alcoholic
				  beverage gross receipts tax; chapter 57-40.2, use tax; chapter 57-40.3, motor
				  vehicle excise tax; chapter 57-40.4, motor vehicle excise tax refund; and
				  chapter 57-40.5, aircraft excise tax . In addition, these sections administer
				  wholesale taxes on alcoholic beverages imposed under North Dakota Century Code
				  chapter 5-03, wholesale taxes on tobacco products imposed under chapter 57-36,
				  and taxes levied under section
				  47-21-08 on selling and licensing
				  performing rights of music or dramatico-musical composition. Both sales and
				  special taxes sections provide taxpayer assistance, review refund requests, and
				  conduct programs to ensure compliance with the law; however, the audit
				  section's major focus is on the audit of sales and use tax accounts.
The motor fuel, oil and gas, and estate taxes section is
				  responsible for the administration of the following chapters and sections of
				  the North Dakota Century Code: chapter 57-37.1, estate taxes; chapter 57-43.1,
				  motor vehicle fuels and importer for use taxes; chapter 57-43.2, special fuels
				  and importer for use taxes; chapter 57-43.3, aviation fuel tax; chapter 57-51,
				  oil and gas gross production taxes; and chapter 57-51.1, oil extraction taxes.
				  These taxes are collected, administered, and audited by the motor fuel, oil and
				  gas, and estate taxes section . This section also issues the motor fuel tax
				  refund to those consumers using motor fuel for agricultural or industrial
				  purposes.
The registration, taxpayer services, and collection sections
				  are all function-based and involved with all taxes administered by the tax
				  administration division. The registration section processes registration
				  information for businesses new to North Dakota or that require an annual
				  license renewal. The taxpayer services staff review returns during processing,
				  and assist taxpayers with tax filing requirements and processes. The
				  collections section is responsible for collecting delinquent taxes for all tax
				  types administered by the tax commissioner's office.
e. Property tax division. The property tax is
				a source of revenue for the financing of county, city, township, school
				district, and other local governments. While local government has the
				responsibility of assessing and taxing all classes of real property, this
				division provides assistance and helps to establish uniformity of procedures.
				It also develops rules and regulations for the taxation of mobile homes under
				North Dakota Century Code chapter 57-55, which tax is administered by the
				county directors of tax equalization and collected by the county treasurers of
				the various counties. This division also provides administrative services to
				the state board of equalization relating to new and expanding business property
				tax incentive and primary sector business and tourism exemption applications
				made under the provisions of North Dakota Century Code chapter 40-57.1, and to
				assessment and sales ratio statistical analyses.
The property tax division also makes annual tentative
				  valuations of railroad and utility properties for use by the tax commissioner
				  to make tentative assessments . The tentative assessments are submitted to the
				  state board of equalization which makes the final assessments. The property tax
				  division also administers the following North Dakota Century Code chapters:
				  57-33.2, taxation of electric generation, distribution, and transmission
				  companies; 57-34, taxation of telecommunications carriers; 57-60, privilege tax
				  on coal conversion facilities; and 57-61, coal severance tax.
f. Information management and technology
				division. This division has two functional areas: information technology and
				processing. The information technology section implements and supports both
				hardware and software components relating to the tax department's information
				technology infrastructure. The processing section manages all mail, imaging,
				printing, data entry, and records management processes for the tax department.
				This division also manages contracts entered into by the tax department with
				software vendors who support the integrated tax system, electronic filing of
				tax returns, disaster recovery tools, and other applications.