CNMI Tax Table: Wage, Earnings, Gross Revenue, and NMTIT Rates

CNMI tax rates come in several layers: a progressive local wage and salary tax running from 0% to 9%, a parallel earnings tax on non-wage income using the same brackets, a gross revenue tax on businesses from 0% to 5%, and a mirror-code territorial income tax that applies the full federal rate schedule but is then reduced by a rebate of 50% to 90%. Bona fide residents of the Commonwealth of the Northern Mariana Islands pay all of this to the CNMI Treasury rather than the IRS.

Wage and Salary Tax

Pay from an employer, including bonuses and commissions, is taxed under 4 CMC § 1201 at marginal rates set by 4 CMC § 1204. Employers withhold these amounts from each paycheck. The annual brackets are:¹

$0 to $1,000: 0%
$1,001 to $5,000: 2%
$5,001 to $7,000: 3%
$7,001 to $15,000: 4%
$15,001 to $22,000: 5%
$22,001 to $30,000: 6%
$30,001 to $40,000: 7%
$40,001 to $50,000: 8%
Over $50,000: 9%

Because the rates are marginal, only the income inside each bracket is taxed at that bracket’s rate. Someone earning $35,000 doesn’t pay 7% on the whole paycheck. The first $1,000 is free, the next $4,000 is taxed at 2%, and each slice above that climbs the ladder until the final slice lands in the 7% bracket. The Department of Finance publishes withholding tables that convert these annual brackets into weekly, biweekly, semi-monthly, and monthly amounts so payroll calculations match the law.¹

Earnings Tax on Non-Wage Income

Income that doesn’t come from an employer-employee relationship is taxed separately under 4 CMC § 1202. This earnings tax reaches capital gains from selling personal or real property, rent from CNMI real estate, winnings from CNMI gaming, and other reportable income.²

The rate schedule uses the same nine brackets as the wage tax, running from 0% on the first $1,000 to 9% on amounts over $50,000.¹ Two base-calculation rules change the math. Gains from selling real property in the CNMI count at half their value, and net rental income from Commonwealth real estate also counts at half. Unlike the mirror income tax described below, the earnings tax does not allow the broad range of deductions a federal filer would expect.²

Business Gross Revenue Tax

Businesses pay a separate tax on total gross revenue under 4 CMC § 1301. This hits gross receipts before any expenses are subtracted, so it is not an income tax in the usual sense. The yearly rates are:³

$0 to $5,000: no tax
$5,001 to $50,000: 1.5%
$50,001 to $100,000: 2%
$100,001 to $250,000: 2.5%
$250,001 to $500,000: 3%
$500,001 to $750,000: 4%
Over $750,000: 5%

The gross revenue tax does not work the same way as the wage brackets. Once a business crosses into a higher tier, the rate for that tier applies to the entire gross revenue, not just the portion above the threshold. If one person owns multiple businesses or holds distributive shares from more than one partnership, all of that revenue is combined to find the applicable rate.³

Territorial Income Tax (NMTIT) and the Rebate

Layered on top of the local taxes is the Northern Mariana Islands Territorial Income Tax, often called the NMTIT or the Chapter 7 tax. Under the Covenant between the CNMI and the United States, the territory adopted the Internal Revenue Code as its own local income tax law, substituting “CNMI” wherever the federal code says “United States.”⁴⁵ The computational result is the same tax bill a mainland filer would see, but the money goes to the CNMI Treasury. Bona fide residents who file and pay NMTIT generally have no separate federal filing obligation.⁶ The return must report worldwide income, not just CNMI-source income.

The reason the CNMI’s effective income tax rate ends up well below the federal equivalent is the rebate under 4 CMC § 1708. The rebate is calculated against a “rebate base,” which is the NMTIT liability on Commonwealth-source income after certain non-refundable credits.⁷ The schedule has three tiers:⁸

Rebate base up to $20,000: 90% rebate
Rebate base from $20,001 to $100,000: $18,000 plus 70% of the amount over $20,000
Rebate base over $100,000: $74,000 plus 50% of the amount over $100,000

A worked example makes the discount tangible. A resident with a $15,000 Chapter 7 liability gets 90% back and pays only $1,500. A resident with a $60,000 liability receives a $46,000 rebate ($18,000 on the first $20,000 plus 70% of the next $40,000), leaving $14,000 owed. The 50% tier has no ceiling, so even high-liability filers see meaningful relief.⁸ The rebate is processed as a credit after filing, and the Division of Revenue and Taxation typically issues rebate checks several months after logging a completed return.

Who Pays CNMI Rates Instead of Federal Rates

These rates apply to bona fide residents of the CNMI, who file Form 1040CM with the Division of Revenue and Taxation and report worldwide income there instead of to the IRS. IRS Publication 570 sets out three tests you have to meet: a presence test based on days physically in the CNMI (with exceptions for medical treatment, charitable sports events, and full-time students); a tax home test requiring your principal place of business or employment to be in the CNMI; and a closer-connection test, meaning your ties to the CNMI outweigh your ties to the mainland or any foreign country.⁶

One trap for people arriving in or leaving the CNMI: if you become or stop being a bona fide resident in a year when your worldwide gross income tops $75,000, you have to file Form 8898 with the IRS. Skipping it carries a $1,000 penalty.⁹

Filing Deadline

Form 1040CM is normally due April 15 of the year after the tax year, matching the federal individual deadline.¹⁰ Interest and late-payment penalties start accruing on any unpaid balance after that date. A filing extension gives you more time to submit the paperwork but does not extend time to pay, so estimate what you owe and pay by April 15 even if the return itself will come later.

For the 2025 tax year, the IRS has granted relief after Super Typhoon Sinlaku. Affected CNMI taxpayers have until November 2, 2026, to file most federal individual and business returns and to make payments otherwise due between April 11 and November 2, 2026. Estimated tax payments falling inside that window are postponed too, and no estimated-tax penalty applies if payment reaches the IRS by November 2, 2026.¹¹ The CNMI Division of Revenue and Taxation has issued parallel local extensions for the same disaster period, so check with the Division to confirm the dates for your local return.

1
CNMI Department of Finance. Withholding Guidelines
2
Commonwealth of the Northern Mariana Islands Law Revision Commission. 4 CMC 1202 – Earnings Tax
3
Commonwealth of the Northern Mariana Islands Law Revision Commission. 4 CMC 1301 – Tax on Gross Revenue
4
Commonwealth of the Northern Mariana Islands Law Revision Commission. 4 CMC 1701 – Application of the Internal Revenue Code, In General
5
Congressional Research Service. Tax Policy and U.S. Territories: Overview and Issues for Congress
6
Internal Revenue Service. Publication 570, Tax Guide for Individuals With Income From U.S. Territories
7
CNMI Law Revision Commission. Revenue and Taxation Regulations – 70-40.6
8
Commonwealth of the Northern Mariana Islands Law Revision Commission. 4 CMC 1708 – Tax Relief
9
Internal Revenue Service. Instructions for Form 8898
10
Department of Finance – Division of Revenue and Taxation. Commonwealth of the Northern Mariana Islands 1040CM
11
Internal Revenue Service. IRS Announces Tax Relief for Taxpayers Impacted by Super Typhoon Sinlaku in the Commonwealth of the Northern Mariana Islands