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

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:

13. Motor vehicles transferred within one hundred eighty days from the effective date as the result of the following corporate transactions:

14. Motor vehicles transferred within one hundred eighty days from the effective date of the business reorganization. The original owner of the motor vehicle must be a member of the reorganized business and the exemption applies only under the following circumstances: