North Dakota Vehicle Tax and Titling
Navigate the process of titling a vehicle in North Dakota, including how the one-time excise tax is determined and what is required for a successful transfer.
When a motor vehicle is purchased or transferred in North Dakota, it is subject to a one-time motor vehicle excise tax. This tax is distinct from the state’s general sales tax and applies to vehicles registered for use on public roads. The North Dakota Department of Transportation (NDDOT) collects the tax when the vehicle is titled, which is required for purchases from dealers, private parties, or for those moving into the state.
Calculating the Motor Vehicle Excise Tax
The motor vehicle excise tax is calculated at a rate of 5% of the vehicle’s taxable purchase price. This purchase price is the total amount paid for the vehicle, including charges for accessories, dealer preparation, and delivery fees. The final taxable amount can be reduced by a trade-in allowance. When a vehicle is traded in, its value is subtracted from the new vehicle’s selling price to determine the taxable base.
For example, consider the purchase of a new vehicle for $30,000. With no trade-in, the excise tax would be 5% of $30,000, resulting in a $1,500 tax. If the buyer trades in their old vehicle valued at $10,000, the taxable amount is reduced to $20,000 ($30,000 minus $10,000). The 5% excise tax is then applied to this new base for a total tax of $1,000.
If a vehicle is acquired by a means other than a purchase, such as a gift that does not qualify for an exemption, the tax is based on the vehicle’s fair market value. This value is listed in a recognized national guide. The tax is collected by the NDDOT’s Motor Vehicle Division when the owner applies for a title.
Common Tax Exemptions
Several situations allow for an exemption from paying the motor vehicle excise tax. One of the most common is for individuals moving to North Dakota who already own their vehicle. If the vehicle was titled and registered in their name in another state for at least 30 days before moving, it is exempt from the excise tax.
Transfers of vehicles as gifts between immediate family members are also exempt. For this purpose, “immediate family” includes spouses, parents, children, siblings, and grandparents and grandchildren. A vehicle acquired directly through inheritance or as part of a divorce settlement is also not subject to the tax.
Other specific exemptions exist, such as for certain disabled veterans with a 100% service-connected disability, who may be exempt on up to two vehicles. Vehicles purchased by government entities or certain nonprofit schools for student transportation also qualify. To claim any exemption, the new owner must provide the appropriate documentation to the NDDOT at the time of titling.
Information and Documents Needed for Titling
To title your vehicle, you must gather and present a specific set of documents to the NDDOT. The required items include:
- The original Certificate of Title from the previous owner, properly assigned to you with the date of sale and an accurate odometer reading.
- A completed Application for Certificate of Title & Registration of a Vehicle (SFN 2872), which requires details like the Vehicle Identification Number (VIN), purchase price, and date of purchase.
- Proof of a North Dakota liability insurance policy.
- A bill of sale, which serves as a receipt and should detail the purchase price and vehicle information.
- A valid form of identification, such as a North Dakota driver’s license or ID card.
The Process for Paying the Tax and Titling
You can submit your application package and payment in one of two ways. The most direct method is to visit a North Dakota Department of Transportation Motor Vehicle branch office in person. Alternatively, you can mail the completed paperwork and a check or money order for the required fees to the NDDOT.
The total payment will need to cover the motor vehicle excise tax, a title transfer fee of $5, and the vehicle’s registration fees. Registration fees vary based on the vehicle’s weight and age.
After the NDDOT processes your application and payment, the state will issue a new North Dakota Certificate of Title in your name. This will be mailed to you along with your new registration tabs and license plates.