For taxpayers with qualified R&D expenses in North Dakota, the State offers an excellent R&D credit that can be double the Federal benefit in many cases. The North Dakota R&D credit (known as the North Dakota research expense credit) is a tiered credit with a generous 25% credit on the first $100,000 in R&D expenses; then it’s structured as a tiered benefit which could still result in an 18% credit on the increment above $100,000 if the taxpayer has been in North Dakota since 2007 and had qualified R&D North Dakota spend. This can far exceed the Federal R&D credit which is a 13% credit if using the reduced credit under 280C.
North Dakota offers other generous credits such as the Angel Fund credit for new start ups; moreover the R&D credit can be sold to other taxpayers offering an opportunity to still take the Angel Credit first, then either carry the North Dakota R&D credit forward for up to 15 years, or sell the R&D credits to other taxpayers.
