North Dakota Code 57-39.5-01.1 – Trade-in deduction
1. When tangible personal property is taken in trade or in a series of trades as a credit or partial payment of a retail sale or lease agreement which is taxable under this chapter, if the tangible personal property traded in will be subject to gross receipts taxes imposed by this chapter, sales taxes imposed by chapter 57-39.2, or motor vehicle excise taxes imposed by chapter 57-40.3, or if the tangible personal property traded in is used farm machinery or used irrigation equipment, the credit or trade-in value allowed by the retailer is not gross receipts.
Terms Used In North Dakota Code 57-39.5-01.1
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Person: means an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
- Personal property: All property that is not real property.
- Personal property: includes money, goods, chattels, things in action, and evidences of debt. See North Dakota Code 1-01-49
- Property: includes property, real and personal. See North Dakota Code 1-01-49
2. Tangible personal property owned or leased and in possession of a farmer may be used as a trade-in to reduce the taxable purchase price of farm machinery or irrigation equipment used exclusively for agricultural purposes if:
a. The retailer selling farm machinery or irrigation equipment to a lessor, for the purpose of leasing to a farmer, also purchases the machinery or equipment owned or leased and in possession of the farmer. The purchase price paid by the retailer for the equipment owned or leased and in the possession of a farmer is the trade-in value for purposes of this section; b. The retailer’s sale of farm machinery or irrigation equipment to a lessor for the purpose of leasing to a farmer and the retailer’s purchase of equipment owned or leased and in the possession of a farmer are documented by an invoice or other documents prepared by the retailer to substantiate the trade-in relationship; c. The lessor purchasing the farm machinery or irrigation equipment for the purpose of leasing to a farmer pays the taxes imposed under this chapter on the purchase price of the equipment less the trade-in value in subdivision a; and
d. The retailer and the lessor maintain records documenting compliance with the requirements in subdivisions a, b, and c.
3. For purposes of this section, “farmer” means any person that leases farm machinery as defined in this chapter or irrigation equipment to be used exclusively for agricultural purposes.