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Published July 08 2012

Ask Your Government: Out-of-state workers pay North Dakota taxes, with some exceptions

Dear Teri,

How does our state income tax garner taxes from individuals that live out of state, work for companies that are based out of state, but the work occurs in North Dakota?

Rick Kram


Thanks for writing! I asked Tax Commissioner Cory Fong to respond. Here’s what he said:

“Generally, when an individual earns compensation for work performed in North Dakota, the income is subject to North Dakota income tax. Regardless of where a business is located, if there are employees working in North Dakota, the business is required to register with the Office of State Tax Commissioner and obtain a withholding account.

“From there, the business will withhold North Dakota income tax from the employees based on the amount of income earned in North Dakota. The business pays the money withheld to the state of North Dakota. The business also reports that amount to the employee on a Form W2. This is the amount that the employee will claim as North Dakota withholding when they file their North Dakota individual income tax return.

“Keep in mind, there are some exceptions. For example, North Dakota has income tax reciprocity agreements with the states of Minnesota and Montana. If certain conditions in the agreements are met, a resident of Minnesota or Montana does not have to pay North Dakota income tax on compensation received for work performed in North Dakota and the compensation earned in North Dakota is taxed in their resident state.

“Conversely, a resident of North Dakota does not have to pay Minnesota or Montana income tax on compensation received for work performed in the other state, and it is taxed here in North Dakota. For more information about reciprocity with Minnesota and Montana, please go to the latest version of the Form ND-1 and the booklet at www.nd.gov/tax/


Dear Teri,

I saw an article in the Grand Forks Herald regarding cremation. (The May 27-28 Ask Your Government column.) I have a question. Is it mandatory you burn a casket after embalming a person and then cremate him? His wife is still living and will be embalmed and then cremated also. We feel the same casket should be used, or can a casket be rented? Thanks so much!

Javon Flaten


Thanks for reading and writing! I contacted Dale Niewoehner, executive secretary of the North Dakota State Board of Funeral Service. Here’s what he said:

“This is difficult to reply to without knowing all the details. There are no rules, laws or codes regarding this matter so our board cannot provide information or legal advice.”

He did say some funeral homes rent caskets that have a removable interior tray/box and cloth liner.

I also contacted Jay Seibel with the North Dakota Funeral Directors Association. Here’s what he said:

“Mr. Niewoehner said it best when he stated that, ‘There are no rules, laws, or codes regarding this matter.’ Each funeral home may have their own idea on how this should be handled and how they would handle it. People should talk to their funeral director and ask him or her what their options are.”

Do you have a question for a North Dakota state government official or agency? Send us your question, and we’ll do our best to find an answer.

Email politics@wday.com (Subject: Ask your government).

You may also write to Teri Finneman c/o Forum Communications, Press Room, State Capitol, Bismarck, ND 58505.

Please include your name, town and a phone number to reach you for verification.

Teri Finneman is a multimedia reporter for Forum Communications