North Dakota HB 1455: AN ACT to create and enact a new subdivision to subsection 3 of section 54-35-26, a new section to chapter 57-39.2, and a new subdivision to subsection 3 of section 57-40.2-03.3 of the North Dakota Century Code, relating to evaluation of economic development tax incentives and a sales and use tax exemption for raw materials, single-use product contact systems, and reagents used for biologic manufacturing; to provide for a legislative management report; to provide an effective date; and to provide an expiration date.

Bill Text

Sixty-eighth Legislative Assembly of North Dakota
In Regular Session Commencing Tuesday, January 3, 2023
HOUSE BILL NO. 1455
(Representatives O'Brien, Hagert, Monson, Roers Jones, Schauer, Schreiber-Beck)
(Senators Kreun, Patten, J. Roers, Wanzek)
AN ACT to create and enact a new subdivision to subsection 3 of section 54-35-26, a new section to
chapter 57-39.2, and a new subdivision to subsection 3 of section 57-40.2-03.3 of the North
Dakota Century Code, relating to evaluation of economic development tax incentives and a
sales and use tax exemption for raw materials, single-use product contact systems, and
reagents used for biologic manufacturing; to provide for a legislative management report; to
provide an effective date; and to provide an expiration date.
BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
SECTION 1. A new subdivision to subsection 3 of section 54-35-26 of the North Dakota Century
Code is created and enacted as follows:
Sales and use tax exemption for raw materials, single - use product contact systems, and
reagents used for biologic manufacturing.
SECTION 2. A new section to chapter 57-39.2 of the North Dakota Century Code is created and
enacted as follows:
Sales tax exemption for raw materials, single - use product contact systems, and reagents
used for biologic manufacturing - Report.
1. Gross receipts from sales of raw materials, single - use product contact systems, and reagents
used directly for discovery, testing, screening, and production for biologic manufacturing in this
state are exempt from taxes under this chapter.
2. To receive the exemption at the time of purchase, the taxpayer must receive from the tax
commissioner a certificate that the raw materials, single - use product contact systems, or
reagents qualify for the exemption.
3. For purposes of this section:
a. "Biologic manufacturing" means the manufacturing process used to support biologic
product discovery, development, generation, product impurity removal, chemical or
physical product alteration, and analysis of in - process products to final deliverable
products which occurs exclusively within this state.
b. "Single - use product contact systems" means tubing, capsule filters, ion exchange
membrane chromatography devices, mixers, bioreactors, sterile fluid containment bags,
connection devices, and sampling receptacles.
4. a. By April first of each year, each taxpayer that received the exemption under this section
in the preceding calendar year shall file with the tax commissioner, on forms and in the
manner prescribed by the tax commissioner, a report showing for the calendar year
preceding the reporting deadline in this subdivision, the taxpayer's:
(1) Total sales and use tax liability exempted under this section;
(2) Total gross payroll;
(3) Total property taxes paid and square footage of buildings owned by the taxpayer;

H. B. NO. 1455 - PAGE 2
(4) Total North Dakota workforce safety and insurance premiums paid;
(5) North Dakota unemployment taxes paid; and
(6) Total state income tax withheld by the taxpayer.
b. Failure to file the report required under subdivision a is cause to disallow the exemption
due to noncompliance. The tax commissioner shall provide notice of the disallowed
exemption to the taxpayer and assess any sales and use tax due. An assessment of tax
made under this subsection is final and irrevocably fixed.
c. By June first of each year, the tax commissioner shall submit to the legislative
management a written report summarizing the information received under subdivision a,
including a comparison of information received in the current calendar year with data
received in the preceding calendar year.
SECTION 3. A new subdivision to subsection 3 of section 57-40.2-03.3 of the North Dakota Century
Code is created and enacted as follows:
Raw materials, single - use product contact systems, and reagents used for biologic
manufacturing as authorized or approved for exemption by the tax commissioner under
section 2 of this Act.
SECTION 4. EFFECTIVE DATE - EXPIRATION DATE. Sections 2 and 3 of this Act are effective for
taxable events occurring after June 30, 2023, and before July 1, 2029, and are thereafter ineffective.

H. B. NO. 1455 - PAGE 3
____________________________ ____________________________
Speaker of the House President of the Senate
____________________________ ____________________________
Chief Clerk of the House Secretary of the Senate
This certifies that the within bill originated in the House of Representatives of the Sixty-eighth
Legislative Assembly of North Dakota and is known on the records of that body as House Bill No. 1455.
House Vote: Yeas 64 Nays 27 Absent 3
Senate Vote: Yeas 42 Nays 5 Absent 0
____________________________
Chief Clerk of the House
Received by the Governor at ________M. on _____________________________________, 2023.
Approved at ________M. on __________________________________________________, 2023.
____________________________
Governor
Filed in this offic