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North Dakota adopts single sales factor election and changes to Multistate Tax Compact

On April 20, North Dakota Gov. Jack Dalrymple signed legislation allowing taxpayers to elect to apportion their income to North Dakota based on an apportionment method that phases in the use of the single sales factor. Taxpayers who choose not to make the election will be required to continue to apportion their income to North Dakota based on the equally weighted three-factor apportionment formula, including the requirement to throwback sales and the use of the cost of performance method to calculate the sales factor for services. In addition, the legislation makes several changes to the state’s adopted version of the Multistate Tax Compact, including elimination of the historic provisions contained in the Uniform Division of Income for Tax Purposes Act.

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