2018 North Dakota Corporate Income Tax Form 40 Instructions

Ryan Rauschenberger Tax Commissioner

Go to www.nd.gov/tax for tax forms, guidelines, FAQs and more.

Email additional tax Questions to [email protected] Special Reminders

Tax Department’s Website - www.nd.gov/tax We encourage you to visit our website for additional information regarding tax credits, tax forms, news releases, to make a payment, or to print a payment voucher. Corporation information is located under the For Businesses tab on the home page. Any news affecting corporate income tax will be summarized in a practitioners’ income tax newsletter, which is available on our website.

Payment Voucher Requirement A payment voucher is required for all corporate income tax payment types that are mailed to the Office of State Tax Commissioner. Payment voucher Form 40-PV is required for taxpayers filing a paper return and paying by check or money order. The vouchers are available on our website at www.nd.gov/tax/payment

Apportionment Formula - Sales Factor Weighting Election (SFW) For the tax year 2018, a corporation may make an election to more heavily weight the sales factor of its apportionment factor. If no election is made, the equally weighted three factor formula would still apply. Tax year 2016 was the first year the SFW election was available for corporate income tax. See page seven of the instructions for information on making the election and the weighting. • 2018 – property 12.5%, payroll 12.5%, and sales 75%. • 2019 and after – sales 100% (no property or payroll factor). • The election is binding for five consecutive years beginning with the first year of the election. • Election lapses after five years unless another five year election is made. • Corporation is precluded from making another five year election for three years if a new election is not made in the sixth year. • The election is not available to a passthrough entity.

Federal Due Dates and Extensions Corporation due dates for the Form 40 are found on page 1 of the instructions. The extension of time to file a federal return is automatically accepted by North Dakota as an extension of time to file the state return for the same period plus one additional month, which for a corporation with a calendar year-end would be November 15th. To extend the due date of the North Dakota return, mark the circle on the return and attach a copy of the federal extension.

Water’s Edge Election • Made by marking circle C or C1 on page 1, line1. • Election is binding for a term of five consecutive tax years. • Answer question #9, page 2 and complete Schedule WE on page 5. • Apply surtax page 1, line 17. Tax Incentive Good Standing Clearance Any taxpayer that applies for or claims any of the specified tax incentives listed in North Dakota Century Code § 54-35-26 must not be delinquent on any state or local tax obligation. A taxpayer which claims any of the specified income tax incentives and owns at least a fifty percent interest in real estate in North Dakota must check the Yes box on Schedule TC or Schedule CR Part III of the return. In addition, the taxpayer must attach to its return a Property Tax Clearance Record form as certification of good standing from each county in which the corporation and its responsible officer(s) owns at least a fifty percent interest in real estate.The instructions for each of the affected tax incentives, the Property Tax Clearance Record Form, and Schedule TC indicate which of the incentives require the form to be attached to the return.

For meeting the new requirement when applying for a specified local tax incentive, such as a Renaissance Zone incentive, the form “Request for Renaissance Zone Certificate of Good Standing or StateTax Clearance Record” is also available on our website.

Federal Tax Cuts & Job Act (TCJA) The TCJA passed by Congress in late 2017 made several changes that affect the computation of a corporation’s federal taxable income for 2018. Because the starting point for computing ND taxable income is automatically tied to current federal taxable income, all federal changes affecting the computation of federal taxable income automatically flow through to impact ND taxable income. Therefore, changes to items such as depreciation and interest expense limitations similarly impact ND taxable income. Also note that with the repeal of the IRC §199 Domestic Production Activities Deduction, there is no longer a ND adjustment to add back that deduction. For additional information on some of the international provisions, see the Notice on our website at www.nd.gov/tax/taxreform

The TCJA also included a significant change to U.S. taxation to reflect more of a U.S. territorial system beginning with 2018. As part of the transition, U.S. corporations were required to include certain foreign income in 2017 that had not been previously subject to U.S. tax, referred to as IRC §965 repatriation. While this change generally only impacts the computation of federal taxable income for 2017, information on how to report the income for North Dakota purposes is also included in the Notice on our website.

Filing Attachments All required schedules and federal forms must be included with the North Dakota return regardless of whether it is filed electronically or on paper. The Modernized e-file (MeF) program continues to be available for electronically filing your North Dakota original return. If a required attachment or schedule is not included with the software, it must be attached as a PDF to the return submission. PDF examples might include a Property Tax Clearance Record, North Dakota credit computation schedules, or the Federal Extension Form 7004. Page 1 2018 North Dakota Corporation Income Tax Return Instructions

Privacy Act Notification. In compliance with the If a federal extension is not obtained, or if an Privacy Act of 1974, disclosure of a social security extension of time beyond the time period covered General instructions number or Federal Employer Identification Number by a federal extension is needed, a North Dakota (FEIN) on this form is required under N.D.C.C. extension may be obtained by completing and Who must file §§ 57-01-15 and 57-38-32, and will be used for filing North Dakota Form 101 prior to the due tax reporting, identification, and administration of date of the return. This form may be obtained by Every corporation engaged in business in North North Dakota tax laws. Disclosure is mandatory. Dakota or having income from North Dakota Failure to provide the social security number or contacting our office. sources must file a North Dakota Corporation FEIN may delay or prevent the processing of this An extension of time to file a North Dakota return Income Tax Return, Form 40. form. does not extend the time for payment of the tax, For example, a North Dakota Form 40 must be Upon request from Legislative Management, the and extension interest at the rate of 12% per filed by: Tax Department is allowed to share the amount of annum will apply to any payment made after the any tax deduction or tax credit claimed or earned regular due date of the state tax return. Penalty • Corporations, including business trusts, by a taxpayer. Disclosure of the taxpayer’s name, does not apply to tax paid within the extension associations, and joint-stock companies; federal identification number, or other confidential period. • Cooperative corporations distributing their net information is not permitted. Extension payments must be accompanied by income through patronage dividends; Form 40‑EXT identifying the name, address, and FEIN of the taxpayer. The form can be found • Insurance companies conducting business Due date activities not subject to a gross premiums tax; on our website. Alternatively, a letter containing A calendar year corporation filing Form 40 must the above information along with a copy of the • Tax-exempt organizations having unrelated file on or before April 15 following the close of the approved state extension of time to file may be business taxable income; Note - A tax-exempt calendar year. submitted with the prepayment of tax due. fiduciary trust that filed a Form 1041 to report the trust’s unrelated business taxable income A corporation reporting on a fiscal year basis must must file North Dakota Form 38; file on or before the 15th day of the fourth month following the close of the fiscal year. Use the Payment of tax • Organizations that anticipate receiving a tax 2018 Form 40 for fiscal years that begin in 2018 If tax due (including interest and penalty) is less exempt status notification from the IRS, but and end in 2019. than $5.00, payment need not be made. If tax is have not actually received such notification by due, the total payment due must be paid at the time the end of the taxable year. A cooperative must file on or before the 15th of, or before, the return is filed. Payment made by day of the ninth month following the close of check should be made payable to the North Dakota Except as provided under “Exception for certain the calendar or fiscal year. Answer “Yes” to State Tax Commissioner and be mailed with S corporations” below, a corporation that files Question #4 on page 2. payment voucher Form 40PV. Federal Form 1120S must file Form 60, North Dakota S Corporation Income Tax Return. Tax-exempt organizations required to file an Payment may be made electronically using an income tax return to report unrelated business ACH credit, credit card, debit card, or electronic Exception for certain S corporations. An taxable income must file a corporation income tax check. To learn more, visit our website at S corporation must file Form 40, North Dakota return on or before the 15th day of the fifth month www.nd.gov/tax/payment. Note that ACH “debit” Corporation Income Tax Return, if all the after the tax year ends. payments are only allowed on electronically filed following apply: returns.  The corporation is a bank or other financial Payment in the form of a check drawn on an institution that formerly was subject to the Short period return international bank, except Canada, cannot be North Dakota financial institution tax under A corporation required to file a federal short accepted. A check must be drawn on a U.S. or N.D.C.C. ch. 57-35.3 and filed Form 35 for period return must file a North Dakota short period Canadian bank, be in U.S. dollars, and use a tax years prior to 2013. return for the same period. The North Dakota standard nine digit routing number. return must be filed by April 15th or by the date  The corporation made an election under prescribed by the IRS, whichever is later. N.D.C.C. § 57-38-01.35 to be taxed as a C corporation for the 2013 tax year and See instructions for the North Dakota Form 40‑ES Preparer authorization filed a Form 40 for 2013 through 2017. for due dates of estimated payments on short If the corporation wants to allow the North Dakota period returns. Office of State Tax Commissioner to discuss its  The corporation’s North Dakota net tax 2018 tax return with the preparer who signed it, liability on the 2017 Form 40 (page 1, A corporation terminating as a Subchapter mark the circle in the signature area of the return. line 20) is zero and the corporation is not S Corporation during the year, or a corporation This authorization applies only to the individual revoking the election, which is done by changing its annual accounting period, must whose signature appears in the “Signature of filing Form 60 for the 2018 year. annualize its North Dakota taxable income and Preparer” section of the corporation’s return. It prorate its state tax liability in the same manner as does not apply to the firm, if any, shown in that If this election is still in effect and the section. S corporation files a Form 40 for the 2018 tax the federal tax liability is prorated. year, it may not file electronically and must If the circle is marked, the corporation is file its return on paper. The corporation must authorizing the North Dakota Office of State Tax provide a statement to each individual shareholder Extension of time for filing Commissioner to contact the preparer to answer containing information on the adjustments that An extension of time to file a federal return is any questions that may arise during the processing will need to be made on the shareholder’s North automatically accepted by North Dakota as an of its return. Dakota individual income tax return to remove extension of time to file the state return. The state the income and losses already taxed and deducted extension is for one month after the due date of the The corporation is also authorizing the preparer to: on the North Dakota corporation income tax automatic federal extension. Attach a copy of the return. For more information, see the Income Tax federal extension Form 7004 to the state tax return • Give the North Dakota Office of State Tax Guideline: Adjustment For Income (Loss) From and mark the extension circle on page 1. The Commissioner any information that is missing An S Corporation Electing To Be Taxed Under return will be processed as a delinquent return from the return; N.D.C.C. §57-38-01.35. if the circle is not marked and a copy of the • Call the North Dakota Office of State Tax federal extension is not attached. Commissioner about the processing of the return or the status of any related refund or payment(s); and 2018 North Dakota Corporation Income Tax Return Instructions Page 2

• Respond to certain North Dakota Office of • the due date of the return (without extension); Estimated tax payments State Tax Commissioner notices that the or If a corporation’s estimated state income tax corporation has shared with the preparer about • the date the return is filed. liability exceeds five thousand dollars($5,000) math errors and return preparation. The notices and its previous year’s state income tax liability will not be sent to the preparer. exceeded five thousand dollars($5,000), the The authorization will automatically end no Attachments and incomplete corporation is generally required to make an later than the extended due date for filing the estimated tax payment of at least one-fourth of the corporation’s 2019 tax return. returns amount due on each of four prescribed dates. A complete copy of the federal income tax return The corporation is not authorizing the preparer to as filed with the IRS must be attached to Form 40. Information regarding estimated tax payments receive any refund check, bind the corporation to is located in the instructions for Form 40-ES. anything (including any additional tax liability), All applicable lines on Form 40 must be or otherwise represent the corporation before the completed and the return must be signed. A signed North Dakota Office of State Tax Commissioner. Form 40 is a declaration the return is correct and If the corporation wants to expand the preparer’s complete. Amended returns/federal authorization, North Dakota Form 500, audit changes Authorization to Disclose Tax Information and A return with incomplete lines or schedules or An Amended North Dakota Corporation Income Designation of Representative, will need to be with notations such as “see attached statement” Tax Return, Form 40X, must be filed if: signed and filed with our office. North Dakota or “available upon audit” is not properly filed and Form 500 can be found on our website at may be returned to the taxpayer. An incomplete • North Dakota income is changed when an www.nd.gov/tax. Search for Form 500. return that is returned will not be considered filed amended federal income tax return is filed or as until resubmitted with the required items. For a result of a federal audit. electronically filed returns, any attachments for extension forms or applicable schedules that are • An error is discovered on a previously filed Overpayments not included with the software must be attached return. Overpayments of income tax may be applied to as a PDF. • The corporation received a refund of the 2019 estimated tax (minimum $5.00) or issued federal income tax which was deducted on as a refund (minimum $5.00). If an overpayment a previously filed Form 40 for tax years is applied to the following year, the amount of Ratios and decimals beginning before January 1, 2004. overpayment is considered an estimated payment and cannot be refunded or applied against other On all schedules where a ratio or decimal is called for, use 6 digits after the decimal point. Information about amended returns can be found tax liability until the close of the following year. in N.D.C.C. §§ 57-38-38 and 57-38 -40. Form 40X and instructions can be obtained by Interest and penalty To file or obtain additional visiting our website at www.nd.gov/tax/corp/ The Office of State Tax Commissioner will notify forms and instructions forms. the taxpayer of any interest and penalty owed on Completed returns and written requests for tax due. If desired, interest and penalty may be information and forms should be mailed to computed by the taxpayer on tax due and entered the Office of State Tax Commissioner, 600 E. Federalization on the return. Boulevard Ave., Dept. 127, Bismarck, ND The North Dakota income tax law is perpetually 58505‑0599. “federalized” for the Federal Taxable Income Interest: starting point of the North Dakota return. If the full amount of the tax is not paid by the original due date, the following provisions for If you have corporate income tax questions interest apply: or are seeking tax forms, please e-mail us at Method of corporation [email protected], visit our website at • If an extension was obtained, interest on the tax www.nd.gov/tax, or call our Corporate Tax taxation due during the extension period is computed Section at 701.328.1249. The North Dakota corporation income tax applies at 12% per annum, through the later of the only to that portion of a corporation’s taxable extended due date or date paid. Beginning For the speech or hearing impaired, call Relay North Dakota at 1.800.366.6888. income which is derived from or attributable to with the month thereafter, interest is computed sources within this state. at 1% per month or fraction of a month. A nonapportioning corporation, (a corporation • If an extension was not obtained, interest on whose business activity is conducted solely within the tax due is computed at 1% per month or Information at the source Any corporation doing business in North Dakota North Dakota,) computes North Dakota taxable fraction of a month, except the month in which income by adjusting its federal taxable income by the tax became due. that is required to file a Federal Form W-2 or 1099 must also file one with this state. For more North Dakota statutory adjustments. Penalty: information on the requirements and alternatives for satisfying those requirements, contact our An apportioning corporation, (a corporation whose • If the full amount of tax is not paid by the due office. business activity is conducted both within and date (or extended due date), penalty is equal to without North Dakota,) computes North Dakota 5% of the unpaid tax due or $5.00, whichever taxable income by adjusting its federal taxable is greater. income by North Dakota statutory adjustments and Quick refund apportioning this adjusted taxable income using • If the return is not filed by the due date(or A quick refund of overpaid estimated income tax Schedule FACT or CR (Part II) of Form 40. extended due date), a penalty of 5% of the net may be requested by a corporation prior to filing tax liability or $5.00, whichever is greater, a return if the expected overpayment exceeds A corporation engaged in a unitary business with applies for the month in which the return is five hundred dollars($500) and the claim for one or more corporations (irrespective of the due, with an additional 5% for each additional quick refund is filed after the close of the taxable country or countries in which the corporations month (or a fraction of a month) during which year but before the 15th day of the fourth month conduct business) must file using the combined the delinquency continues, not to exceed 25% thereafter. report method. of the net tax liability. The form for the Quick Refund Of Estimated A unitary business is a group of corporations If there is an overpayment on Form 40, page 1, Income Tax For Corporations (Form 40‑QR) must which carries on activities, the component parts of interest at the rate of 1% per month accrues on the be obtained by contacting our office. which transfer value among themselves through overpayment beginning forty-five days after the the unities of ownership, operation and use. later of: Page 3 2018 North Dakota Corporation Income Tax Return Instructions

• “Unity of ownership” means the group is under Complete Schedule WW on page 4 and enter the the common control of a single corporation, Line 1 amount from line 10 on page 1, line 1. Attach the which is also a member of the group. Control Income completed Schedule WW to Form 40 when filed. exists when the single corporation owns, Mark the circle for the reporting method used directly or indirectly, more than fifty percent of to complete the return and enter the income Answer “No” to Question #8 on page 2. the voting stock of another corporation; reportable under that method. Mark ONE circle only. • “Unity of operation” means the group receives Consolidated Return benefits from functional integration or For North Dakota corporation income tax economies of scale; a. Single Corporate Entity purposes, a North Dakota “consolidated return” • “Unity of use” means the group of corporations The single corporate entity method reports income means a single corporation income tax return contributes to or receives benefits from or loss of only one incorporated business that is that reports the tax liability of more than one centralized management and policy formation. not part of a unitary business. (See item “Method corporation engaged in business or having of corporation taxation” on page 2.) sources of income from North Dakota. Whether a group of corporations is engaged in a unitary business depends on the facts and If the single corporate entity method is used for • If part of the same unitary group, file the circumstances of each case. If unity of ownership both North Dakota and federal purposes, enter the return using the same taxpayer name and exists, any of the following facts or circumstances federal taxable income from Federal Form 1120, FEIN as previously filed returns if that entity creates a presumption that the unities of operation line 30. has activity in North Dakota in 2018. If not, and use exist; therefore, the corporations are file using the name and FEIN of another engaged in a unitary business if: If the single corporate entity method is used for affiliate having activity in North Dakota in North Dakota purposes and the corporation is 2018. • All activities of the group are in the same included in a consolidated Federal Form 1120, general line or type of business; enter the corporation’s federal taxable income • Only taxpayers who compute their North before consolidating adjustments/eliminations Dakota tax liability using the combined • The activities of the group constitute different from: report method may file a consolidated return. steps in a vertically structured enterprise; or • A pro forma separate company federal income • Laws and rules governing consolidated • The group is characterized by centralized tax return, line 30; or returns are found in N.D.C.C. ch. 57‑38, and management. N.D. Admin. Code ch. 81‑03‑05.1. • The by-company schedule showing gross income and deductions, which supports the • If filing a consolidated North Dakota tax consolidated federal taxable income. return, circle b1 or c1 should be marked on Water’s edge election line 1. A corporation required to file its North Dakota Cooperatives and other organizations using federal return using the worldwide unitary combined forms other than Federal Form 1120 must enter the • Because a North Dakota consolidated return report method may elect to use the water’s federal taxable income from the appropriate form. reports the tax liability of more than one edge method. The water’s edge election must corporation, North Dakota Schedule CR, be made on the return as originally filed and is Parts I, II and III will be completed. binding for five consecutive tax years. Also see b. Combined Report Method Question #9 on page 2. If the election is made, • If filing a consolidated North Dakota tax For North Dakota corporation income tax return (i.e., circle b1 or c1 is marked on all corporations covered by the election will be purposes, a “combined report” means an subject to a 3.5% surtax on their North Dakota Form 40, line 1) the answer to Question #8 income tax return on which the tax liability on page 2 will be “Yes”. taxable income. is computed using the methods described in For the taxable years beginning prior to January 1, N.D.C.C. chs. 57‑38, 57-38.1 and N.D. Admin. Schedule CR 2012, a domestic disclosure spreadsheet was Code chs. 81-03-05.1, 81-03-05.2, 81-03-05.3, and 81‑03-09. North Dakota Schedule CR, Parts I, II and required. However, for years after December 31, III will be completed only for corporations 2011, the requirement to file a domestic disclosure • Except for 100% North Dakota corporations that are required to apportion income to spreadsheet was repealed. required to file a consolidated tax return, it North Dakota (i.e., if a corporation does not is essential to have a unitary business group have property, payroll, and/or sales in North of corporations before the combined report Dakota, it will not be listed on Schedule CR. method can be used. For a discussion of a However, the denominator of the apportionment Specific instructions unitary business group of corporations, see factor computation on Part II will be the total for Form 40, Page 1 item “Method of corporation taxation” on property, payroll, and sales for all unitary page 2. companies in the combined group). Taxpayer Name • If filing a combined report method return If filing a combined return (line 1, circle b or c) where only one company apportions income The Schedule CR in this booklet allows for the return should be filed using the taxpayer name to North Dakota (i.e., circle b or c is marked three separate companies to be reported. If and FEIN of the entity having activity in North on Form 40, line 1), the answer to Question more companies are to be reported, photocopy Dakota. #8 on page 2 will be “No”. Parts I, II and III of Schedule CR and continue to complete the additional schedule copies for If you previously filed a consolidated return • If filing a consolidated combined report companies that apportion their income to North (line 1, circle b1 or c1) as a member of a unitary method North Dakota tax return where more Dakota. (See page 7 for specific instructions group and are still a member of that group, use the than one company apportions income to for Schedule CR.) same taxpayer name and FEIN as previously filed North Dakota (i.e., circle b1 or c1 is marked returns. If not, file using the name and FEIN of on Form 40, line 1), the answer to Question another affiliate having activity in North Dakota #8 on page 2 will be “Yes”. b1. Combined Report Method in 2018. Consolidated Return Farming or Ranching Corporation Mark the “Combined Report Method” circle if Mark the “Combined Report Method Consol. Answer yes if business is registered as a farm or Form 40 includes only one corporation from a Return” circle if the corporation is filing one ranch corporation with the North Dakota Secretary unitary business which apportions its income to consolidated North Dakota return using the of State. North Dakota. combined report method. The return should be filed using the taxpayer name Two or more apportioning corporations may Business Code file one North Dakota consolidated return if the Enter the business code from the NAICS list and federal identification number of the entity having activity in North Dakota. corporations are required to use the combined found on our website at www.nd.gov/tax that most report method and more than one of the closely corresponds to the area from which you corporations has a filing requirement in North derived the majority of your income for the tax Dakota. year. 2018 North Dakota Corporation Income Tax Return Instructions Page 4

If circle b1 is marked: Expenses must be attributed to nonbusiness d. Other income in a manner which fairly distributes all of 1. If part of the same unitary group, file the Mark the “Other” circle if the corporation has the corporation’s expenses to its various types of return using the same taxpayer name and FEIN received written permission from the Office of income. as previously filed returns if that entity has State Tax Commissioner to file a North Dakota activity in North Dakota in 2018. If not, file return using a filing method other than those Corporations completing Schedule CR must enter using the name and FEIN of another affiliate specified above. the total nonbusiness income for all corporations having activity in North Dakota in 2018. having activity within North Dakota. Other filing methods are contained in N.D.C.C. 2. Complete Schedule WW on page 4 and enter § 57-38.1-18 (for example, separate accounting or the amount from line 10 on page 1, line 1. a method using an apportionment factor different Line 9 Attach the completed Schedule WW to from that computed on Schedules FACT or CR). Form 40 when filed. Exemption for new and expanding If the circle entitled “Other” is marked: business 3. Complete North Dakota Schedule CR, Parts I, II and III only for companies that apportion 1. Attach a copy of the letter from the Office of If the corporation received a new and expanding income to North Dakota. If a corporation does State Tax Commissioner granting permission to business exemption from the State Board of not have property, payroll, and/or sales in North use, or requiring the use of, this filing method. Equalization, enter the amount of exempt Dakota, it will not be listed on Schedule CR. income computed pursuant to N.D. Admin. Code 2. Attach a worksheet substantiating and § 81‑03‑01.1-06. If line 8, page 1 is negative, do 4. Answer “Yes” to Question #8 on page 2. explaining the computation of income. not enter an amount. 3. Enter the income from the worksheet on Corporations completing Schedule CR must enter page 1, line 1. the exempt income for each corporation having an c. Water’s Edge Method exemption. Mark the “Water’s Edge Method” circle if: Line 4 Attach a schedule showing the computation • The corporation is a member of a worldwide North Dakota apportionable income of exempt income for each corporation and a unitary business group of corporations, and Property Tax Clearance Record form. If completing Schedule CR, enter the amount from • The corporation elects to file a North Dakota page 1, line 4 on Schedule CR, Part I, line 4 (enter tax return using the water’s edge method, and the same amount for each company) and complete Line 10 • No other corporations in the combined report Parts I, II, and III of Schedule CR. Renaissance zone income have a filing requirement in North Dakota, if exemption more than one, see c1 method below. If a North Dakota consolidated tax return is If the corporation is claiming exempt income as If circle c is marked: being filed to report the tax liability of more a result of the Renaissance Zone Act, enter the than one corporation engaged in business in or total amount of exemption from the summary 1. The return should be filed using the taxpayer having sources of income from North Dakota: part of Schedule RZ. The amount of exemption name and FEIN of the entity having activity in cannot exceed the amount of related income North Dakota. 1. Do not complete lines 5-19 on page 1 until Schedule CR has been completed. assigned to North Dakota. Contact the Office 2. Complete Schedule WE on page 5 and enter the of State Tax Commissioner at 701.328.1243 to amount from line 12 on page 1, line 1. Attach 2. Complete Schedule CR, Parts I, II, and III obtain Schedule RZ. Attach Schedule RZ and the completed Schedule WE to Form 40 when on pages 6, 7, and 8 and enter the totals on the Property Tax Clearance Record form to the filed. page 1. Form 40 when filed. 3. Answer “No” to Question #8 on page 2. 3. Complete Form 40, page 1. 4. Attach the completed Schedule CR to Line 11 Form 40 when filed. ND income after income exemptions c1. Water’s Edge Method If the amount on line 11 is a loss, the loss must be Consolidated Return carried forward. Mark the “Water’s Edge Method Consolidated Line 5 Return” circle if: Apportionment factor If a corporation has business income from activity Line 12 • The members of a worldwide unitary business solely within this state, enter 1.000000 on this line. North Dakota loss carryforward group of corporations elect to file a consolidated tax return using the water’s edge method, and The North Dakota loss carryforward allowed on Corporations not filing a consolidated return, enter the Form 40 is the amount of the accumulated • If two or more apportioning corporations in the the apportionment factor from Schedule FACT, North Dakota loss less any previously deducted combined report have a filing requirement in line 14 or 16. loss. North Dakota. Corporations completing Schedule CR must enter North Dakota net operating losses incurred in If circle c1 is marked: the apportionment factor from Schedule CR, taxable years beginning after December 31, 2002, Part II, line 14a or 16a. cannot be carried back to a previous taxable 1. If part of the same unitary group, file the year. These net operating losses must be carried return using the same taxpayer name and FEIN It is required that the supporting Schedule FACT forward. Capital losses must still be carried back as previously filed returns if that entity has or CR, Part II, whichever is applicable, be and then carried forward. activity in North Dakota in 2018. If not, file completed, and that the 6-digit factor from the using the name and FEIN of another affiliate supporting schedule be carried to page 1, line 5. Attach a worksheet showing the accumulated having activity in North Dakota in 2018. loss, by year, less any previously deducted loss If the supporting schedule is not completed, the carryback or carryforward. 2. Complete Schedule WE on page 5 and enter the return will be considered incomplete and mailed amount from line 12 on page 1, line 1. Attach back. Corporations completing Schedule CR must enter the completed Schedule WE to Form 40 when the loss carryforward from all corporations listed filed. Line 7 on Schedule CR. 3. Complete North Dakota Schedule CR, Parts I, Income allocated to North Dakota II and III only for companies that apportion income to North Dakota. Enter nonbusiness income allocated to North Dakota, less related expenses. Nonbusiness 4. Answer “Yes” to Question #8 on page 2. income is allocated to North Dakota if the income is attributable to North Dakota. Page 5 2018 North Dakota Corporation Income Tax Return Instructions

Enter the amount of federal net operating loss If the company is filing with a tax year end deducted in arriving at federal taxable income, other than a calendar year basis, it will claim generally as reflected on Federal Form 1120, withholding on the corporate income tax return for Specific instructions line 29a. Any North Dakota net operating loss the year following the year of Form 1099-MISC. carryover deduction is separately computed and A taxpayer with a fiscal year end in 2019 will for Schedule SA deductible on page 1, line 12 (or Schedule CR, claim the amount withheld as shown on its 2018 line 12). Form 1099-MISC, and so on for each subsequent Additions year and return. Line 1 Line 14 Federal net operating loss Gross proceeds allocated to North Line 24a deduction Interest and penalty for balance Dakota from sale of North Dakota Enter the amount of federal net operating loss research tax credits due deducted in arriving at federal taxable income, Enter on this line the gross proceeds from the sale, The Office of State Tax Commissioner will notify generally as reflected on Federal Form 1120, assignment or transfer of unused North Dakota the taxpayer of any interest and penalty owed on line 29a. Any North Dakota net operating loss research tax credits. See the 2018 Corporate tax due. If desired, interest and penalty may be carryover deduction is separately computed and Income Tax Credits booklet for more information. computed by the taxpayer on tax due and entered deductible on page 1, line 12 (or Schedule CR, on the return. line 12). Line 15 Interest: North Dakota taxable income If the full amount of the tax is not paid by the Line 2 original due date, the following provisions for Special deductions If line 14 is zero enter the amount from line 13. interest apply: Enter the amount of special deductions claimed If line 13 is zero or less and line 14 is greater than • If an extension was obtained, interest on the tax in arriving at federal taxable income, generally as zero, enter the amount from line 14. due during the extension period is computed at reflected on Federal Form 1120, line 29b. Even 12% per annum, through the extended due date. though this amount includes the deduction for If line 13 is greater than zero, enter the total of line Beginning with the month thereafter, interest foreign derived intangible income, that amount 13 and line 14. is computed at 1% per month or fraction of a is separately deducted on Schedule SA, line 9 month. (below). Line 21 • If an extension was not obtained, interest on Tax year 2018 estimated income the tax due is computed at 1% per month or Line 3 tax payments fraction of a month, except the month in which All taxes measured by income the tax became due. Enter the total 2018 estimated income tax deducted to arrive at federal payments. Also, enter any 2017 overpayment Penalty: taxable income credited to the 2018 taxable year and any payment • If the full amount of tax is not paid by the due Enter all taxes measured by income, including voluntarily made to the state with an extension of date (or extended due date), penalty is equal to income taxes, franchise or privilege taxes time for filing. 5% of the unpaid tax due or $5.00, whichever measured by income (paid to any taxing authority is greater. including a foreign country) to the extent such taxes were deducted to arrive at federal taxable Line 22 • If the return is not filed by the due date(or income. North Dakota income tax withheld extended due date), a penalty of 5% of the net on oil and gas royalties tax liability or $5.00, whichever is greater, Enter the amount of North Dakota income applies for the month in which the return is Line 5 tax withheld on oil and gas royalty payments due, with an additional 5% for each additional Contribution to endowment fund that were reported to the company on a 2018 month (or a fraction of a month) during which credit adjustment Form 1099‑MISC. The amount to enter should the delinquency continues, not to exceed 25% of the net tax liability. Enter the contribution made to an endowment only be income tax withheld and should not fund that was deducted on your federal income tax include any production or extraction taxes. Do not Line 24b return to the extent a credit has been claimed on enter income tax withheld and reported on a K-1 Schedule TC, line 16. received from a partnership. Income tax withheld Interest on underpayment of on K-1 distributive income for a corporation is estimated tax not allowed. In order to substantiate the amount Instructions for making estimated tax payments Line 6 withheld, a copy of the Form 1099-MISC must be are found on Form 40-ES. If estimated payments Other additions attached or credit will not be allowed for the tax are not timely made or in the correct amount, • Housing incentive contributions withheld. If the return is filed electronically, the interest is charged. Form 1099-MISC should be attached as a PDF. Include on this line the amount of contribution made to a housing incentive fund that was The amount of interest due for underpaid or late deducted on your federal income tax return to Enter the amount of tax withheld for the company payments of estimated tax can be computed on only if its FEIN is identified as the recipient on the the extent a credit has been claimed on a North North Dakota Form 40-UT. Instructions for Dakota return for any year. Form 1099-MISC. If this return is a consolidated Form 40-UT are on the Form 40-UT. Enter the return, the amount to enter should also include interest from Form 40-UT, line 9 on line 24b. • Safe harbor leases any amount withheld on behalf of any corporation Attach Form 40-UT to Form 40 when filed. The safe harbor lease provisions in § 168(f) that is included in this return as identified by the (8) of the IRC of 1954, as amended, are not recipient’s FEIN on the Form 1099-MISC. adopted in North Dakota in those instances Line 25a where the minimum investment by the lessor Income tax withheld on royalties received by a Amount to be credited to year 2019 disregarded entity cannot be claimed. If income is less than one hundred percent (100%). Enter tax was withheld on a disregarded entity owned by A corporation may elect to have the overpayment amounts on line 8. a corporation, a corrected Form W-9 (to correctly credited to their 2019 estimated tax. The  Seller/Lessee: sale proceeds, rent expense, identify the owner of the disregarded entity as overpayment will be credited to the first quarterly amortization expense, lease acquisition cost. the royalty owner) must be provided to the payer, installment for 2019. and a corrected Form 1099-MISC identifying the  Buyer/Lessor: interest expense, depreciation corporate owner must be obtained. expense, amortization expense, acquisition cost, loss on sale of property. 2018 North Dakota Corporation Income Tax Return Instructions Page 6

See N.D.C.C. § 57-38-01(5)(a) for more Lines 11 and 12 • Regulated investment companies information. Allocated income and related Regulated investment companies, as defined by expenses the IRC, will be allowed to subtract on this line • Real estate investment trusts certain dividends paid to shareholders. The Include on this line, the dividends paid Business income: N.D. Admin. Code dividends paid must be attributable to income deduction allowed by a captive real estate ch. 81-03-09-03. All income arising from that is taxable under N.D.C.C. ch. 57-38 when investment trust (REIT) on its federal income transactions and activity in the regular course the regulated investment company earns the tax return and included in the taxpayer’s of the taxpayer’s trade or business operations income. federal taxable income. See N.D.C.C. including income from tangible and intangible § 57‑38-01.3(1)(l) for further information. property if the acquisition, management, and • North Dakota railway bonds The dividends paid should be added back only disposition of the property constitutes integral Enter the amount of interest on bonds issued by to the extent they have not otherwise been parts of the taxpayer’s regular trade or business a regional railway authority in North Dakota. included in apportionable income. operations. • ACRS depreciation adjustment • ACRS depreciation adjustment Nonbusiness income: All income other than Enter the amount of depreciation deducted on Enter the amount of depreciation deducted on business income. the federal return for all currently held assets the federal return for all currently held assets placed in service between January 1, 1981 and placed in service between January 1, 1981 and Enter all nonbusiness income on line 11 and enter the end of the 1982 tax year using methods the end of the 1982 tax year using methods related expenses on line 12. The method used to allowed under the IRC provisions in effect as allowed under the IRC provisions in effect as attribute expenses to nonbusiness income must of December 31, 1980. North Dakota income of December 31, 1980. North Dakota income fairly distribute all of the corporation’s deductions tax statutes did not allow for the use of ACRS tax statutes did not allow for the use of ACRS to all of its various types of income. depreciation for assets placed in service for depreciation for assets placed in service for If an entry is made, all of the following must be 1981 and 1982 only and federal taxable income 1981 and 1982 only and federal taxable income attached to Form 40: must be adjusted for the difference in these must be adjusted for the difference in these two methods. In computing this adjustment, two methods. In computing this adjustment, • A worksheet showing each type of income or exclude safe harbor lease assets. exclude safe harbor lease adjustments. loss item allocated and its amount; A worksheet explaining any adjustment on this A worksheet explaining any adjustment on this • Documentation showing the state to which the line must be attached. line must be attached. item of income or loss was allocated (a copy of the other state’s tax return is preferred); and Subtractions • A narrative explaining the reasons for allocating each item of income or loss. Specific instructions Line 8 for Schedule FACT Tax refunds received in year 2018 Line 14 Enter all income, franchise or privilege tax refunds IC-DISC distributions Apportionment factor in received in 2018, to the extent such taxes were previously included in North Dakota taxable Enter the actual distributions made by a general income. corporation who elects to be an interest-charge In general, the apportionment factor is a product domestic international sales corporation, elects of a formula consisting of a weighted-average Federal income tax refunds received cannot be to use intercompany pricing rules under IRC of three factors: property, payroll, and sales. included on this line. § 994, and is owned by one or more individuals Each factor represents the percentage of the or passthrough entities. Answer “Yes” to corporation’s North Dakota activity compared Line 9 Question #4 on page 2. to its total activity everywhere. Except where a sales factor weighting election is made, the Foreign derived intangible income apportionment factor calculation equally weights deduction Line 15 property, payroll, and sales—see “Sales factor Enter the amount of the foreign derived intangible Other subtractions weighting election” below. income deduction that was included in the Do not include intercompany eliminations deduction on Federal Form 1120, line 29b, on this line when filing a combined report If a corporation files under a combined report which was also included in the amount entered (filing methods b, b1, c or c1). Report all filing method, the denominator (i.e., the on Schedule SA, line 2 (above). Because this intercompany eliminations on Schedule WW everywhere amount) of each factor must include deduction is allowable in computing North Dakota line 9 or Schedule WE line 5. the amounts for all of the corporations included in the combined report. Exclude from each factor income but was added back as a special deduction, • Eminent domain sale or transfer the deduction is restored by entering on this line. amounts attributable to intercompany transactions If the amount on page 1, line 1 includes any between corporations included in the combined gain, either ordinary or capital, from property report. Also exclude from each factor amounts Line 10 subjected to eminent domain sale or transfer, attributable to allocable income. Interest on United States such gain is not taxable and must be entered on Obligations this line. If the amount of any factor’s denominator is zero, exclude that factor from the calculation. If Enter the following on this line: • Safe harbor leases a corporation owns an interest in a passthrough The safe harbor lease provisions in § 168(f) • Interest income from U.S. obligations. entity and includes the distributable share (8) of the IRC of 1954, as amended, are not of income from the passthrough entity in its • Interest income from other securities that is adopted in North Dakota in those instances apportionable business income, include in the specifically exempted from state income tax by where the minimum investment by the lessor is factors the corporation’s proportionate share of the federal statute. less than one hundred percent (100%). Enter passthrough entity’s apportionment factors. amounts on line 15. Not all interest income from securities issued  Special apportionment rules may apply in the by federal government agencies is includable Seller/Lessee: interest income and depreciation expense (for assets placed in case of certain industries or unique circumstances. on this line. Examples of interest income not For example, special apportionment rules apply includable on this line are from certain mortgage service between January 1, 1981 and the end of the 1982 taxable year, use methods to financial institutions, as provided under N.D. backed securities of the Federal Home Loan Admin. Code ch. 81-03-09.1. For additional Mortgage Corporation, Federal National Mortgage allowed under the IRC as of December 30, 1980. For assets placed in service after the information on the apportionment factor, see N.D. Association, Government National Mortgage Admin. Code ch. 81-03-09. Association and interest received from a federal 1982 taxable year, use ACRS depreciation). tax refund.  Buyer/Lessor: rental income. Page 7 2018 North Dakota Corporation Income Tax Return Instructions

Financial Institutions Specific line instructions Sales Factor For any corporation that meets the definition The following line instructions apply to either of a financial institution, special apportionment Schedule FACT or Schedule CR, Part II, Line 9 provisions apply for the property and sales factors. whichever schedule applies. The line items for Everywhere sales These apportionment provisions are included the “Everywhere” amounts on the two schedules Enter the corporation’s total sales or receipts, in N.D. Admin. Code ch. 81-03-09.1 and are correspond to each other. If applicable, also see after returns or allowances, for the tax year. Sales identical to the provisions that existed for financial the general instructions for Schedule CR, Part II, generally means all gross receipts of a corporation. institutions that were subject to the financial on page 8. However, the types of sales or gross receipts institution tax and filed Form 35 for years prior included in the sales factor depend on the nature to 2013. Loans and receivables of a financial Property Factor of the corporation’s regular business activities and institution that are included in the property factor may include amounts other than sales reported on should be reported on the “Other assets” line and Lines 1 through 6 Form 1120, line 1. If sales other than Form 1120, a supporting schedule should be attached. Please Owned and rented property line 1 are entered as everywhere sales, attach a contact our office if there are questions regarding schedule listing the sales types and amounts. these special apportionment provisions. Enter on the applicable line the average value of real and tangible personal property owned and Line 10 Sales Factor Weighting Election rented by the corporation. For owned property, North Dakota sales Beginning with tax year 2016, a corporation this generally means the average of the original may elect to weight its sales factor more heavily. cost (before depreciation) used for federal income For sales of tangible property, the sale is assigned The following provisions apply to a sales factor tax purposes. For rented property, this generally to North Dakota if the destination of the property weighting election: means the amount of rent paid multiplied by eight. is in North Dakota, regardless of the shipping Certain property items are subject to special rules. terms. For sales of other than tangible property, the • Applicable weightings for a year covered by an Do not include amounts related to construction in sale is assigned to North Dakota if the income- election: progress. A corporation’s share of a passthrough producing activity which gave rise to the receipt entity’s apportionment factors should be included is performed in North Dakota. For more complete o Tax year 2018 on line 5. information, see N.D. Admin. Code §§ 81-03-09-26 through 31 and 34. Property 12.5% The average value of owned and rented property Payroll 12.5% is assigned to North Dakota if the property is Sales 75% located in North Dakota. The amount attributable Line 11 o Tax years 2019 and after to mobile property is generally assignable to Throwback sales North Dakota based on a ratio of the property’s Sales 100% Enter the amount of sales shipped from a location time spent in North Dakota. For more complete in North Dakota that are delivered to the U.S. • The election must be made on an original, information on the property factor, see N.D. government or to another state or country where timely filed return. Admin. Code §§ 81-03-09-15 through 21 and 33. the corporation is not subject to a tax measured • The election is made by marking the box on by income in that jurisdiction. For more complete Schedule FACT, line 15a or Schedule CR, Payroll Factor information, see N.D. Admin. Code Part II, line 15a, depending on the filing §§ 81-03-09-29 and 30. method. Line 8 • The election applies to all companies included Enter the amount of total compensation paid to Line 14 in a unitary group and to all companies filing employees for the tax year. This includes gross Apportionment factor a consolidated North Dakota return. See wages, salaries, commissions, and any other Schedule CR, Part II, line 15a. form of remuneration paid to the employees. If making a sales factor weighting election, skip this line and go to line 15. • The election is binding for five consecutive Use the amount before deductions for deferred tax years, starting with the year for which the compensation, flexible spending plans, and other Otherwise, divide line 13 by the number of factors election is made. payroll deductions. Do not include amounts paid having an amount greater than zero in column 1 on for employee benefit plans that are not considered lines 7, 8, and 12. Enter the result on this line and • After the fifth year of an election, if a new taxable wages to the employee. An employee is an on page 1, line 5. Do not complete lines 15 and 16. election is not made (for year 6), the equally- individual treated as an employee under the usual weighted three-factor apportionment formula common law rules, which generally mirror an must be used for at least three years before individual’s status for purposes of unemployment Sales Factor Weighting Election another election can be made. compensation and the Federal Insurance Apportionment Factor Contribution Act. The application of special industry apportionment Line 15 provisions in N.D. Admin. Code ch. 81-03-09 Compensation of an employee’s services does not preclude making a sales factor weighting performed entirely within North Dakota are If making a sales factor weighting election, mark election. If a corporation’s apportionment factors assigned to North Dakota. For an employee whose the box on line 15a. See “Sales factor weighting include amounts attributable to a passthrough services are performed in more than one state, election” for more information. entity, the election applies to the calculation of the compensation is generally assigned to North On line 15b, indicate the year within the five-year corporation’s apportionment factors, as adjusted Dakota based on the amount of compensation election period for which this return is being filed to include the passthrough entity amounts. (Note: reported to North Dakota for unemployment by entering a number from 1 to 5. Entering year 2 The passthrough entity itself may not make a sales compensation purposes. Whether or not state or 3 does not constitute a new five year election. factor weighting election.) For more information income tax was withheld from an employee’s on the sales factor weighting election, see N.D. compensation does not affect where the Line 16 Admin. Code ch. 81-03-09.2. compensation is assigned for apportionment factor purposes. For more complete information Unless one of the exceptions below applies, from on the payroll factor, see N.D. Admin. Code column 3, take line 12 times 6 and add the result to Note: A corporation that does not make a sales lines 7 and 8, divide the result by 8. factor weighting election for 2016 or 2017 is §§ 81‑03‑09‑22 through 25. not precluded from making one for 2018 or in a If one of the following exceptions applies, the future year. amount to enter on this line must be calculated as described under the exception. Exception 1. If column 1, line 7 or 8 is zero, take column 3, line 12 times 6 and add to lines 7 and 8, divide the result by 7. 2018 North Dakota Corporation Income Tax Return Instructions Page 8

Exception 2. If column 1, both line 7 and line 8 Line 5. Wind energy device credit generated after are zero, enter the amount from column 3, line 12. December 31, 2014 and before January 1, 2017. Specific instructions Exception 3. If column 1, line 12, is zero, divide Line 6. Employment of the individuals with line 13 by the number of factors having an amount developmental disabilities or chronically mentally for Schedule CR greater than zero in column 1, lines 7 and 8. ill credit. Schedule CR is a worksheet to compute the Line 7. Research and experimental expenditure North Dakota tax liability of multiple nexus credits generated by taxpayer. companies in one unitary group on one North Dakota “consolidated” return. The tax liabilities Line 8. Research and experimental expenditure are computed for each company apportioning Specific instructions credits purchased by taxpayer. its income to North Dakota, added together, and for Schedule TC Line 9. Renaissance Zone credits. the total carried to page 1. Before you begin to complete the CR schedules, you must complete Line 10. Biodiesel or green diesel fuel production lines 1-4, page 1. Each company separately Lines 1 through 3 credit. listed on Schedule CR, including those with a Nonprofit private school tax credit zero apportionment factor, will be considered a Line 11. Soybean and canola crushing equipment taxpayer for purposes of having filed a return. Tax credits are allowed for contributions to costs credit. qualifying nonprofit private primary, secondary Schedule CR has three parts: and higher education schools located in North Line 12. Seed capital business investment credit. Dakota. A separate credit is allowed for each Line 13. Biodiesel or green diesel fuel blending Schedule CR, Part I calculates the tax liability of category of school. To qualify, a contribution credit. each company. must be made directly to or specifically designated for the exclusive use of a qualifying school. If a Line 14. Biodiesel or green diesel fuel sales • Line 4 - Enter the amount from page 1, line 4 contribution is made to an account, fund, or entity equipment costs credit. (enter the same amount for each company). benefiting both qualifying and nonqualifying Line 15. Agricultural commodity processing Schedule CR, Part II calculates the North Dakota schools, it qualifies for the credit only if the entity apportionment factor for each nexus company. provides the donor with a statement showing the facility investment credit. amount specifically designated for the use of the Line 16. Endowment fund contribution credit. • Each company computes its separate North qualifying school or other documentation for non- Dakota apportionment factor using the cash contributions. A list of qualifying schools Line 17. Internship employment credit. total everywhere property, payroll, and can be found in the Corporate Income Tax Credit sales of the entire unitary group for the Booklet on our website at Line 18. Angel fund investment credit carried denominators. Each company uses its own www.nd.gov/tax/corp/forms. forward. separate North Dakota property, payroll, and Line 19. Angel fund investment credit purchased sales as the numerator. If a contribution is made to a qualifying school carried forward. that provides education in one or more grades • Line 5 - Enter the factor as calculated for in both the primary school category (K through Line 20. Workforce recruitment credit. each company on Schedule CR, Part II, 8th grades) and secondary school category (9th line 15. through 12th grades), a separate credit is allowed Line 21. Wages paid to a mobilized military for the amount contributed to each category of employee credit. Schedule CR, Part III reports the tax credits available for each company. school. Unless the school provides the donor Line 22. Housing incentive fund credit carried with a statement showing the amount specifically forward. • The tax credits are calculated for each designated for the use of each category of school, company and totaled on Line 25. The total one-half of the contribution will be deemed to Line 23. Automation manufacturing equipment is carried to line 19 of Schedule CR, Part I. have been made to each category of school. A purchase credit carried forward. After all tax credits are reported on Schedule corporation may elect to treat a contribution as CR, Part III, each tax credit is totaled for all having been made during a tax year if made on or Line 24. Contributions to Rural Leadership ND companies and reported on Schedule TC on before the due date, including extensions, for filing scholarship program credit. page 4. Form 40 for that tax year. If a credit is being claimed on Schedule TC or After Schedule CR has been completed and each The credit allowed for each category of school Schedule CR Part III, line 7 – 15, 17 – 20, or 23, separate company that apportions its income to equals the lesser of (1) 50% of the contributions a local tax clearance is required for each county North Dakota has computed its North Dakota tax made to eligible schools within the category (2) the corporation has 50% or more interest in real liability and net income tax due, page 1, lines 5-20 20% of the corporation’s total income tax, or (3) property in North Dakota. The tax clearance are completed as follows: $2,500. requirement also applies to any officer(s) responsible for the corporation’s state tax filing or 1. Copy the apportionment factor from Enter on line 1 the credit for nonprofit private payment obligations. The tax incentives listed may Schedule CR, Part II, line 15a or line 16a, if colleges. Enter on line 2 the credit for nonprofit not be granted, or claimed by, a taxpayer who is the sales factor weighting election is made, private high schools. Enter on line 3 the credit for delinquent on property tax owed on real property to page 1, line 5. nonprofit private primary schools. in North Dakota or is delinquent on any state or 2. Add together all the separate companies’ For each contribution, attach a copy of a receipt local tax obligation. amounts for lines 6 through 19 on from the nonprofit private institution or a copy Schedule CR, Part I and copy the total of a cancelled check (front and back) or other To satisfy the property tax clearance requirement, of each line for all companies to the documentation for non-cash contributions. a Property Tax Clearance Record form is required corresponding line on page 1. for each county in which the corporation or responsible officer(s) holds a 50 percent or more 3. Complete Schedule TC. The total credits Lines 4-24 ownership interest. A new Property Tax Clearance for all companies included on Schedule Instructions for the following tax credits can be Record form must be obtained and attached to CR must equal the credits reported on found in the Corporate Income Tax Credit Booklet the Form 40 for each year a listed income tax Schedule TC. on our website at www.nd.gov/tax/corp/forms. incentive is claimed. The form and instructions are available on our website. 4. Copy the amount from Schedule CR, Part I, Line 4. Geothermal, solar, wind, biomass energy line 20a to page 1, line 20. device credits (prior to January 1, 2015). Attach the completed Schedule CR to Form 40 when filed. Taxpayer Bill of Rights

You may obtain a copy of the North Dakota Taxpayer Bill of Rights by contacting the Office of State Tax Commissioner or visiting our website at www.nd.gov/tax

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If speech or hearing impaired, Corporate Income Tax Section call us through Relay North Dakota: 1.800.366.6888 State Capitol, 16th Floor Monday through Friday Visit our website 8:00 a.m. to 5:00 p.m. On our website, you will find the following resources: • Tax forms Write

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• Income tax statutes and regulations 600 E. Boulevard Ave. Dept. 127 • Calendar of due dates, public meetings, and Bismarck, ND 58505-0599 workshops • Press releases • On-line message service E-mail us Request forms, ask us a question, or send a message Our website address is: to us via email at: [email protected] www.nd.gov/tax Fax You may fax your request or question to 701.328.1942