Primary Sector Certification

Most of the state's economic development tools and incentives are targeted toward primary sector businesses. In fact, legislation for several of these incentives specifies that a business must be 'certified' as a primary sector business by the director of the Economic Development & Finance Division of the North Dakota Department of Commerce. Certification does not guarantee receipt of any incentive, but being certified as a primary sector business can be an important first step in the process.

"Primary sector business" means an individual, corporation, limited liability company, partnership, or association which through the employment of knowledge or labor adds value to a product, process, or service that results in the creation of new wealth. The term includes tourism but does not include production agriculture.

Programs and incentives that may require certification include:

• New Jobs Training

• Research and Development Company Certification to
  Sell, Transfer or Assign Unused Tax Credit

• Sales Tax Exemption on Computer and Telecommunications Equipment

• Seed Capital Investment Tax Credit

A taxpayer is entitled to a credit against state income tax liability if they make a qualified investment in a "qualified business" for the Seed Capital Tax Credit.
 

A taxpayer is entitled to a credit against state income tax liability if there is a qualified investment in a "qualified business" for the Agricultural Business Tax Credit.
 

To be eligible for the Angel Investor Tax Credit, an angel fund must be certified by the North Dakota Department of Commerce. Criteria for certification can be found in the certification form, as well as in N.D.C.C. 57-38-01.26 at http://www.legis.nd.gov/cencode/t57c38.pdf#nameddest=57-38-01p26.  

Effective July 1, 2017, angel funds must meet new conditions to become certified and for investors to receive the Angel Investor Tax Credit against their income tax liability.  Applications for certification must be approved prior to a fund investing in a qualified business for which investors intend to submit claims for a tax credit.
 
SEE ALSO: QUALIFIED BUSINESS FOR THE ANGEL INVESTOR TAX CREDIT

Recent legislative changes also include criteria for investments into an in-state or out-of-state “qualified business”. These businesses must  be certified by the North Dakota Department of Commerce prior to receiving investment dollars from a certified angel fund.

Use this form only for application for a life science animal-use certified company in the state of North Dakota by the North Dakota Department of Commerce Division of Economic Development and Finance as defined in N.D.C.C. 54-34.3-16. 
 

Certification as an entrepreneurial center provides access to the Technology-based Entrepreneurship Grant Program, administered by the North Dakota Department of Commerce. Certification as an entrepreneurial center does not guarantee funding. An entity already certified as an entrepreneurial center for the New Venture Capital Program is already eligible for the Technology-based Entrepreneurship Grant Program and does not need to submit again."
 

A taxpayer that is a primary sector business is allowed a nonrefundable credit against the tax imposed under section 57-38-30 or 57-38-30.3 for purchases of manufacturing machinery and equipment for the purpose of automating manufacturing processes in this state.