Issue
Our client was undergoing a North Dakota sales and use tax audit that included proposed assessments for tangible personal property, including equipment purchased at the beginning of 2020. The open question was whether those older items could remain in the audit based on the applicable notice-of-determination timing rules and the audit submission date in 2026.
The matter was also time sensitive. The Notice of Determination needed to be dated within the month to comply with the signed extension on file.
Solution
CBIZ confirmed under the direction of North Dakota’s legal department that assessments for tangible personal property, including equipment, purchased in 2020 would be removed. The agency specifically cited NDCC 57-39.2-15, which addresses the timing for issuing a Notice of Determination, including the six-year and three-year measurement periods and the extended six-year rule when tax due is determined upon audit to be 25% or more above the amount reported on
a return.
Outcome
The client achieved a favorable audit resolution on a key issue: the agency agreed to remove assessments for tangible personal property and equipment purchased in 2020. The financial impact was substantially reduced, and the successful resolution brought a longstanding audit to a close.
The resolution also provided forward-looking clarity. The agency stated its expectation that future bare rentals of equipment and associated fees will be subject to sales tax. It also noted that future equipment purchased to provide service or rental with an operator is subject to sales or use tax when the property is purchased for use, consumption, or storage in North Dakota and is purchased for other than resale.
| Company Information | |
|---|---|
| Industry | Crane and rigging / equipment rental and services |
| Entity Type | Private |
| Ownership Structure | Corporation |
| Annual Revenue | $776 Million |
| Number of Employees | 2,000 |
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