Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified North Dakota tax professional before filing.
North Dakota · USA · Short-term rental taxes
Short-Term Rental Taxes in North Dakota
Short term rental taxes in North Dakota: 5% state sales tax on stays under 30 days, city sales, lodging and restaurant taxes on top, and a low 0%–2.5% state income tax on your rental profit.
The 30-Second Answer
- Short term rental tax in North Dakota starts with the 5% state sales tax on stays under 30 days. Houses, apartments and single rooms all count as taxable lodging.
- Cities add more. Local sales taxes, a city lodging tax of up to 2% and a lodging and restaurant tax apply by location. Airbnb also collects a 3% city lodging tax in Fargo and a 3% hotel-motel tax in Grand Forks.
- You are responsible unless your platform contract says otherwise. Airbnb collects in North Dakota; for other channels and direct stays you need a sales tax permit and file monthly, quarterly or annually as assigned.
- Income tax is low: 0%, 1.95% or 2.5% depending on income, on Form ND-1 due April 15, 2027 for tax year 2026.
Deductions
What North Dakota STR Hosts Can Deduct
Rental expenses you deduct on your federal return reduce your North Dakota taxable income too, which may keep your profit in the 0% bracket.
Sales, lodging and lodging-and-restaurant taxes you collect belong to the state and city, not to you. Keep them out of rental income, or record them as income and deduct the same amount when remitted. Allocate costs between rental and personal days under IRC §280A if you use the property yourself.
Filing Calendar
Key Dates & Filing Calendar
North Dakota sales tax is filed on the frequency set when you get your permit. City lodging taxes follow each city's calendar; income tax follows April 15.
Monthly filers are due the last day of the following month, and annual filers by the last day of January. When a due date falls on a weekend or holiday, it moves to the next business day.
North Dakota Office of State Tax Commissioner — Sales and Use Tax; Sales and Use Tax Deadlines; Individual Income Tax
Federal & North Dakota Income Tax Treatment
Passive Rental vs. Active Business: Which Applies to Your North Dakota STR?
The federal Schedule E or Schedule C result carries into your North Dakota return, where rates run from 0% to 2.5%.
Passive Rental — Schedule E
The standard route for most hosts
- Report rents and expenses on Schedule E; the result carries into your Form ND-1.
- No self-employment tax on net rental income.
- Passive-loss limits apply; the $25,000 allowance phases out between $100,000 and $150,000 of modified AGI.
- Depreciate the building over 27.5 years; furnishings acquired after January 19, 2025 qualify federally for permanent 100% bonus depreciation.
No ceiling; North Dakota's top rate is 2.5%
Active Business — Schedule C
For service-heavy hosting
- Applies when the average stay is 7 days or less and you provide substantial services (daily housekeeping, meals, concierge).
- Net profit owes 15.3% self-employment tax; the Social Security part stops at the $184,500 2026 wage base.
- Losses may offset other income if you materially participate.
- May qualify for the federal §199A QBI deduction; North Dakota taxes the profit at up to 2.5%.
No ceiling; SE tax applies on top of federal and North Dakota income tax
Depreciation
Depreciation for North Dakota STR Properties
Depreciation is claimed on your federal return and carries into North Dakota, lowering both income taxes each year you rent.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential rental building | 27.5 years (straight-line) | Land is not depreciable, so split the purchase price between land and building. |
| Furniture, appliances & electronics | 5 years (MACRS) | Federally, items acquired after January 19, 2025 qualify for permanent 100% bonus depreciation. Ask your preparer about any North Dakota adjustment. |
| Driveways, fencing & landscaping | 15 years (MACRS) for land improvements | Outdoor improvements separate from the building itself. |
| Roof, furnace & window upgrades | 27.5 years | Improvements to the building follow the building's life. |
Cost segregation can move components into 5- and 15-year classes for faster deductions. Get professional advice before commissioning a study.
On sale, depreciation claimed is recaptured federally at up to 25%. The gain also flows into your North Dakota return at rates of up to 2.5%.
Sales & Lodging Taxes
North Dakota Sales and Lodging Taxes on Vacation Rentals
Every North Dakota stay under 30 days carries the 5% state sales tax. Cities layer on their own sales, lodging and lodging-and-restaurant taxes.
The Office of State Tax Commissioner administers the state sales tax. Local lodging and lodging-and-restaurant taxes are administered by the cities that levy them, and its rate locator does not include them.
5% statewide, plus city and county taxes where you are
ND Office of State Tax Commissioner — Hotels and Motels guideline; Local Taxes; Sales and Use Tax; City of Grand Forks — Sales and Use Tax; Airbnb Help Center article 2321
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Airbnb booking | Airbnb collects the state sales tax, local sales tax, city lodging and lodging-and-restaurant taxes, and the Fargo and Grand Forks lodging taxes on stays of 29 nights and shorter | Keep Airbnb's tax reports as proof the tax was remitted |
| Vrbo / Booking.com booking | You stay responsible unless your marketplace contract says the platform remits the tax | Read your terms and check each booking breakdown before relying on the platform |
| Direct booking | You collect the taxes, file state and local sales tax on ND TAP and pay city lodging taxes to the city | Get a sales tax permit before your first direct stay and keep tax separate from rent |
Airbnb also collects a 3% lodging tax in Fargo and a 3% hotel-motel tax in Grand Forks. Grand Forks adds a 1/4% lodging and restaurant tax to its city sales tax. Rooms occupied by the same guest for 30 or more consecutive days are exempt from sales and lodging taxes.
Platforms
Airbnb Tax in North Dakota: What the Platforms Collect
North Dakota leaves the tax with the homeowner unless the marketplace contract shifts it. Airbnb collects; check the others, and remember IRS reporting follows federal thresholds.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Form 1099-K above $20,000 and 200 transactions; 1099-MISC for other payments of $2,000+ | Yes — 5% state sales tax, local sales tax, city lodging and lodging-and-restaurant taxes, and 3% Fargo / Grand Forks lodging taxes | Earnings and tax reports in the host dashboard |
| Vrbo | Form 1099-K at the same federal thresholds | Only if your contract says Vrbo remits — confirm on each booking | Annual payout summary in the owner dashboard |
| Booking.com | Varies by payment model | Only if your contract says Booking.com remits — confirm on your statements | Invoices and payout statements in the extranet |
| Direct bookings | No third-party reporting; you report all income | No — you collect and remit under your sales tax permit | Your own ledger |
Using More Than One Platform?
Each platform remits only on its own bookings, and only where it has taken on that duty. Your sales tax returns and Form ND-1 need the full picture, so track Airbnb, Vrbo, Booking.com and direct stays in one ledger.
US Reporting — 1099-K, Not DAC7
DAC7 is an EU directive and does not apply to North Dakota rentals. US platforms report host payouts on Form 1099-K once gross payments exceed $20,000 and 200 transactions in the year. All rental income is taxable whether or not a form arrives.
Airbnb Help Center — Occupancy tax collection and remittance in North Dakota (airbnb.com/help/article/2321); ND Hotels and Motels guideline; IRS — Form 1099-K
Illustrative P&L: A North Dakota Guest House
Example: a home earning $30,000 in rents (excluding sales and lodging taxes paid by guests). For illustration only — not tax advice.
Record-Keeping
Stay Audit-Ready: What to Keep and How Long
North Dakota hosts can be asked for records by the IRS, the Office of State Tax Commissioner and their city's finance office.
| Keep | How long | Why |
|---|---|---|
| Booking records (dates, nights, guest, rate, channel) | At least 3 years after filing | Shows which stays were under 30 days (taxable) and supports rental vs. personal days |
| Platform contracts and tax statements | At least 3 years after filing | Shows whether the marketplace took on the duty to remit and what it collected |
| State sales tax returns and city lodging tax filings | At least 3 years after filing | Evidence of what you reported and paid on direct stays |
| Expense receipts and invoices | 3 years from filing (6 if income is understated by more than 25%) | Supports deductions that flow from your federal return to Form ND-1 |
| Purchase documents, improvements and depreciation schedule | Until 3 years after you sell | Needed for basis, gain and depreciation recapture |
Keep a copy of each platform's host terms. In North Dakota, the contract decides whether the platform or you owes the tax.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
This page is for education only and is not tax or legal advice. Confirm current rates with the North Dakota Office of State Tax Commissioner, your city and a qualified tax professional before filing.
- ND Office of State Tax Commissioner — Hotels and Motels guideline — Rentals under 30 days taxable; 30+ consecutive days exempt; homeowner responsible unless the marketplace contract says otherwise; permit required. https://www.tax.nd.gov/sites/www/files/documents/guidelines/business/sales-use/guideline-hotels-and-motels.pdf
- ND Office of State Tax Commissioner — Sales and Use Tax — 5% rate; permit 30 days before opening; monthly/quarterly/annual filing. https://www.tax.nd.gov/business/sales-and-use-tax
- ND Office of State Tax Commissioner — Sales and Use Tax Deadlines — Due-date rules and 2026 quarterly dates. https://www.tax.nd.gov/sales-and-use-tax-deadlines
- ND Office of State Tax Commissioner — Local Taxes — Local lodging tax up to 2%, lodging and restaurant tax 1%, administered by cities. https://www.tax.nd.gov/business/sales-and-use-tax/local-taxes-city-and-county-taxes
- ND Office of State Tax Commissioner — Individual Income Tax — 2025 brackets 0% / 1.95% / 2.5%; Form ND-1 due April 15. https://www.tax.nd.gov/individual-income-tax
- City of Grand Forks — Sales and Use Tax — 1/4% city lodging and restaurant tax. https://www.grandforksgov.com/government/city-departments/finance-and-administrative-services/sales-tax
- Airbnb Help Center — Occupancy tax collection and remittance in North Dakota — Taxes and rates Airbnb collects, including Fargo and Grand Forks. https://www.airbnb.com/help/article/2321
- IRS — Understanding your Form 1099-K — Federal third-party reporting for payment platforms. https://www.irs.gov/businesses/understanding-your-form-1099-k
Questions
Frequently Asked Questions — North Dakota STR Taxes
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