The North Dakota lodging tax is the 5% state sales tax applied to short-term stays of fewer than 30 consecutive days, plus any city and county lodging taxes that apply where the property sits. Local layers can add up to another 6% on top of the state rate, so a guest’s total tax can range from 5% in a rural area with no local levies to 11% in a city and county that impose every available lodging tax at the maximum. Hotels, motels, bed-and-breakfasts, and short-term rental hosts on Airbnb or VRBO all collect the same taxes.
Who Has to Collect Lodging Tax
North Dakota treats any business that rents sleeping accommodations to the general public for fewer than 30 consecutive days as a taxable lodging provider. Hotels, motels, bed-and-breakfasts, guest houses, tourist courts, and short-term rental properties are all covered.1North Dakota Office of State Tax Commissioner. Sales Tax: Hotels, Motels, and Lodging Facilities Guideline
Listing on a peer-to-peer platform doesn’t change the analysis. If you rent a room, apartment, or entire home through Airbnb, VRBO, or a similar service, you’re a retailer of lodging under state law and owe the same taxes as a commercial hotel. Airbnb currently collects and remits the state sales tax and certain local taxes on stays of 29 nights or fewer, but hosts should confirm with the Office of State Tax Commissioner that every applicable local layer is being captured, since platform collection doesn’t always cover all of them.1North Dakota Office of State Tax Commissioner. Sales Tax: Hotels, Motels, and Lodging Facilities Guideline
One narrow boundary: a business that houses only its own employees, contractors, or a contractor’s employees, and never rents to the public, is not a lodging facility and does not collect tax on those employee charges. The moment that business opens rooms to the public, it becomes a lodging facility and must collect tax on all sales, employee stays included.1North Dakota Office of State Tax Commissioner. Sales Tax: Hotels, Motels, and Lodging Facilities Guideline
How the Rate Is Built
The tax on a North Dakota stay comes in layers. The total depends entirely on the city and county where the property is located.
State Sales Tax
Every taxable lodging transaction is subject to the 5% state sales tax on gross receipts.2North Dakota Office of State Tax Commissioner. Local Taxes by Location Guideline North Dakota does not impose a separate state-level lodging tax on top of that.
City Lodging Taxes
Cities can add up to two layers. A base city lodging tax of up to 2% of gross receipts applies to rooms rented for fewer than 30 consecutive days. Some cities also adopt an additional lodging and restaurant tax of up to 1%, which applies to both accommodations and restaurant sales of prepared food and beverages.3North Dakota Legislative Branch. North Dakota Code 40-57.3 – City Lodging Tax Not every city imposes these, and rates vary. The Tax Commissioner publishes a current list.
County Lodging Taxes
Counties follow a parallel structure. A county board of commissioners may impose a lodging tax of up to 2% on gross receipts from short-term rentals, and may add a further lodging and restaurant tax of up to 1%. County levies stack on top of the city taxes and the state sales tax.
What the Guest Actually Pays
In a location where every available city and county tax is imposed at the maximum, the combined rate reaches 11%. In a rural area with no local lodging taxes, it stays at the 5% state sales tax. Check the specific rate for your property’s location through the Tax Commissioner’s local taxes guideline before you set your pricing.
What Counts as Taxable Gross Receipts
Tax applies to gross receipts, meaning the total amount you charge the guest for the accommodation. The base room rate is only the starting point. Any fee required as part of the stay is part of the taxable amount, and putting it on a separate line of the invoice doesn’t remove it from tax.
The state guideline specifically identifies the following as taxable components of a lodging rental:1North Dakota Office of State Tax Commissioner. Sales Tax: Hotels, Motels, and Lodging Facilities Guideline
- Reservation and processing fees, including handling, administrative, and booking charges
- Extra person fees for guests beyond the standard occupancy
- Cleaning fees
- No-show charges billed when a guest fails to cancel in time
- Equipment rentals such as audio-visual gear, cribs, and rollaway beds
- Telephone access fees or per-call charges added to the room bill
Cleaning fees are the most common place short-term rental hosts miss tax, because platforms typically list them as a separate charge. They are still part of taxable gross receipts.
Exemptions
Stays of 30 or More Consecutive Days
When a guest occupies the same accommodation for 30 or more consecutive days, the stay is exempt from the state sales tax and from any local lodging taxes.1North Dakota Office of State Tax Commissioner. Sales Tax: Hotels, Motels, and Lodging Facilities Guideline The 30-day threshold is written into both the state sales tax framework and the local lodging tax statutes.3North Dakota Legislative Branch. North Dakota Code 40-57.3 – City Lodging Tax Keep documentation of the continuous occupancy dates so you can support the exemption if audited.
Government Entities
Federal, state, county, and city governments, along with political subdivisions and their agencies, are exempt from sales tax on lodging when the charges are billed to and paid directly by the government entity. Acceptable methods include a government warrant, government check, or a government-issued credit card that is centrally billed to and paid by the issuing entity.1North Dakota Office of State Tax Commissioner. Sales Tax: Hotels, Motels, and Lodging Facilities Guideline
Who pays is the whole test. If a federal employee uses a personal credit card and gets reimbursed later, the stay is taxable. Individually billed government travel cards don’t qualify either.4GSA SmartPay. North Dakota Tax Information Cash payments are always taxable no matter who’s paying. Request a completed Exemption Certificate for Government and Qualifying School Lodging Accommodations and keep it on file.
Qualifying Schools
Schools receive the same treatment when lodging is billed to and paid by the school. A team stay covered by a school check with a valid North Dakota Certificate of Sales Tax Exemption is exempt. If individual parents or coaches pay and seek reimbursement, the exemption doesn’t apply.1North Dakota Office of State Tax Commissioner. Sales Tax: Hotels, Motels, and Lodging Facilities Guideline
Getting a Sales Tax Permit
Any business renting taxable lodging must hold a North Dakota sales tax permit before accepting guests. The Tax Commissioner recommends applying at least 30 days before you open, and the application runs through the North Dakota Taxpayer Access Point (ND TAP).5North Dakota Office of State Tax Commissioner. Sales and Use Tax6North Dakota Office of State Tax Commissioner. ND TAP Information Permits don’t transfer with a business sale, so a buyer needs a new one.
Once you’re operating, keep detailed records of gross receipts, tax collected, and every exemption certificate you accept, along with proof of payment for each exempt transaction. North Dakota requires retailers to preserve these records for at least three years and three months.
Filing Frequency and Deadlines
Returns are filed through ND TAP. When you apply for your permit, the Tax Commissioner assigns you a filing frequency based on sales volume: monthly, quarterly, semi-annual, or annual.5North Dakota Office of State Tax Commissioner. Sales and Use Tax
Returns and payments are generally due by the last day of the month following the reporting period. Quarterly filers follow the same rule, with each quarter’s return due at the end of the month after quarter-end.7North Dakota Office of State Tax Commissioner. Sales and Use Tax Deadlines
Seasonal operators like summer cabin rentals and hunting lodges need to file for every assigned period, even in months with no taxable sales. A missed “zero return” carries the same consequences as skipping a return with tax due.
Penalties for Late Filing and Payment
North Dakota’s late penalties escalate quickly:5North Dakota Office of State Tax Commissioner. Sales and Use Tax
- Late filing: 5% of the tax due (or $5, whichever is greater) for the first month a return is overdue, with another 5% added for each additional month, up to a maximum of 25% of the tax owed.
- Late payment: a separate 5% penalty (or $5, whichever is greater) on any tax not paid by the deadline.
- Interest: 12% annual interest from the filing deadline until everything is paid. Interest is not charged for the first month a return is late.
These stack. A provider three months behind on filing and payment owes 15% in filing penalties, 5% in payment penalties, and accruing 12% interest. The Tax Commissioner can also revoke a sales tax permit for delinquent reporting, which stops you from legally operating. Treating filing deadlines as non-negotiable is the cheapest way to protect the business.