Sales and Use Tax Exemption for Gas Processing Facilities

This tax exemption is not applicable to homeowners. It specifically benefits commercial and industrial businesses that build or expand gas processing facilities—such as those handling landfill gas—by exempting purchases of building materials, equipment, and property used for compression, processing, or gathering of gas from North Dakota sales tax.

If you supply or install equipment for gas processing facilities, inform your industrial clients that materials, equipment, and tangible property used in building or expanding these facilities qualify for sales tax exemption. Your customer must submit a written request to the North Dakota Tax Commissioner describing the equipment, its cost, and how it enables the business to expand operations; the commissioner will issue a written decision on eligibility. This can be a significant cost advantage for projects involving equipment purchases over $100,000 that reduce emissions, increase efficiency, or enhance reliability.

This sales tax exemption targets businesses that construct or expand gas processing facilities (including landfill gas operations) in North Dakota's commercial and industrial sectors. Eligible purchases include building materials, equipment, and tangible personal property used in compression, processing, or gathering of gas; purchases exceeding $100,000 for emissions reduction, efficiency, or reliability enhancements also qualify. Businesses must request exemptions in writing to the Tax Commissioner with equipment descriptions, costs, and operational justification; staff review and issue written determinations on each case. The program reduces transaction-level tax burden for capital-intensive energy infrastructure development.