North Dakota Used Car Tax: 5% Excise, Trade-Ins, Gifts and 30 Days

North Dakota charges a 5% motor vehicle excise tax on a used car, in place of sales tax, and it applies to private sales the same as dealer sales. The tax is figured on the purchase price minus any trade-in, no local tax is added, and gifts between close family members are exempt. You have 30 days after getting the signed title to apply for a new one. Miss the paperwork and the state adds a penalty of 5% of the tax or $5, whichever is more, plus 1% a month.

I read the North Dakota Tax Commissioner's motor vehicle excise tax guideline (revised June 2026), chapter 57-40.3 and section 39-05-17 of the Century Code, and the DOT's title application form SFN 2872 (April 2026 version) on Oct 20, 2026. The dollar examples are my own arithmetic.

How the 5% works

Century Code 57-40.3-02 imposes the excise tax "at the rate of five percent on the purchase price of any motor vehicle purchased or acquired either in or outside of the state" for use on North Dakota roads. The guideline says it's separate from the state sales tax, that no local tax applies to buying a vehicle, and that the DOT's Motor Vehicle Division collects it as an agent for the Tax Commissioner. Dealers often handle it for you; in a private sale you pay it when you title the car.

The purchase price is the total paid. The statute excludes manufacturer incentives and auction fees, and the guideline adds that title, registration and document fees aren't part of it, and neither is an extended warranty or service contract. So on a $12,000 private sale with no trade, you'd owe $600.

Trade-ins, cash sales and insurance payouts

If you trade in a vehicle, the trade-in allowance comes off the selling price before the 5% is applied. Buy a $20,000 car from a dealer with a $5,000 trade and the tax is figured on $15,000, which works out to $750. The guideline is explicit on one trap, though: a cash payment to an individual for your old car isn't a trade-in credit. Sell your car privately for $5,000 and buy the next one from a dealer, and you pay tax on the full $20,000.

A less known credit covers a car that was stolen or totaled. The guideline says insurance proceeds can be used as a trade-in credit if you present the insurer's notarized statement of loss, and that statement is good for three years. If the replacement costs less than the payout, you can apply the rest to another purchase.

Gifts and family transfers

The guideline exempts gifts between spouses, parents and children, grandparents and grandchildren, and siblings. You claim it with exemption number 1 on SFN 2872 and name the relationship. Other common exemptions include a transfer by inheritance or a deceased owner's trust, a transfer to a former spouse under a divorce decree within one year of the divorce, and a no-payment transfer to or from someone entering, serving in or just discharged from the military.

A gift outside those relationships isn't free. The statute says that when a vehicle changes hands as a gift or for "nominal or no monetary consideration," the purchase price includes the average value of similar vehicles from the DOT's standards and guides. So selling your neighbor a car for $1 means tax on what the book says it's worth.

Bought it in another state?

Under 57-40.3-09, if you paid sales, use or excise tax to another state that's less than North Dakota's, you pay the difference. If you paid the same or more, nothing more is due. The credit only applies if the other state gives a substantially similar credit for North Dakota's tax, and the Tax Commissioner can ask for written proof the tax was due and paid. A separate presumption in 57-40.3-08 says that if you apply for plates or a title within 30 days of buying the car, the state presumes you bought it for use in North Dakota, even if it was titled elsewhere first.

Deadlines, fees and penalties

Section 39-05-17 gives the seller 30 days from the sale to deliver the signed title, and gives you 30 days from receiving it to deliver it to the DOT with a $5 transfer fee and apply for a new title. Your registration can be suspended or revoked if you don't, and a violation of that section is a class B misdemeanor. SFN 2872 lists the $5 title fee, a $1.50 abandoned vehicle disposal fee on new and out-of-state vehicles titled in North Dakota for the first time, and an odometer reading required on vehicles 2011 and newer.

For the tax itself, 57-40.3-11 sets a penalty of 5% of the tax due or $5, whichever is greater, plus 1% of the tax for each month after the purchaser's certificate was due, if you don't file it or file a false one. The Tax Commissioner can waive it if the delay was excusable, but don't count on that. Our North Dakota title transfer guide walks through the form.

What the tax office won't catch

The DOT's job at the counter is the title and the tax, so finding a car's accident or flood past is on you. Check the VIN on NMVTIS, and if anything is branded, read our North Dakota salvage and rebuilt title rules. For how other states compare, see our used car sales tax overview.

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Sources

• ND Tax Commissioner: Motor vehicle excise tax guideline (rev. 6-2026)
• N.D. Century Code chapter 57-40.3 and chapter 39-05
• ND DOT: SFN 2872 title and registration application