North Dakota · research and development · ND-RD-001
Research Expense Credit
Publication revised September 24, 2026. Sourcebook page 215.
Credit amount / calculation
Regular method: 25% of the first $100,000 of research expenses above the base and 8% of the excess above $100,000. A separate alternative simplified method is available.
Business fit and eligible activity
Qualified North Dakota research can generate a state credit. Qualified research activity. Ordinary production, routine quality control and an equipment purchase alone do not qualify.
Illustrative business benefit
With $200,000 of North Dakota qualified research expenses above the regular-method base, the credit is $100,000 x 25% + $100,000 x 8% = $33,000 before tax limits.
Timing / first action
Tax-year claim: document the eligible expense, hire or placed-in-service date and meet any separate certification deadline. Identify the technical uncertainty and start contemporaneous project records before trying to calculate the credit.
Official sources
Related programs
Apprenticeship Tax Credit
10% of qualified apprentice compensation
Employers hiring qualifying apprentices can receive a state credit.
Automation Equipment Tax Credit
15% of qualifying automation purchases or capital-lease
Especially relevant to mills adding scanning, optimization, robotics or other qualifying automation.
Renaissance Zone Income Tax Benefit
Project-specific credit/exemption under Renaissance Zone
Fixed facilities in designated zones may receive tax benefits after certification.
Clean Electricity Investment Credit (Internal Revenue Code §48E)
Generally
Potentially relevant when a forest-products facility owns qualifying zero-emission generation or energy-storage property.
Credit for Increasing Research Activities (Internal Revenue Code §41)
Regular research-credit method
A sawmill, secondary manufacturer or biomass business can qualify when it performs genuine technological experimentation to improve a product or process.
Rehabilitation Credit (Internal Revenue Code §47)
Generally
A forest-products company rehabilitating a certified historic mill or industrial building for income-producing use may qualify.