Brrr: Taxing ice houses and snowmobiles in North Dakota

It must be only the hardiest of individuals who take up ice fishing and snowmobiling in North Dakota: Average temperatures throughout the winter months are well below freezing. Yet it’s not for vendors of snowmobiles and ice houses to wonder why their customers like that sort of thing. They may, however, need to know how their customers will use such items in order to correctly tax them.

The taxability of a snowmobile depends on how it’s used — or rather, where it’s used. Those used exclusively on land owned or leased by the snowmobile owner don’t need to be registered or titled with the state. Sales tax applies to the sale of these snowmobiles.

If the owner will take the snowmobile to other parts of the state, even to a neighbor’s property, it must be registered and titled by the Department of Transportation and is subject to the state’s 5 percent motor vehicle excise tax. However, sales tax doesn’t apply.

Farm machinery qualifies for a reduced rate of tax in North Dakota (a 3 percent farm machinery gross receipts tax), but the Tax Commission points out that snowmobiles don’t qualify for it. Presumably this holds true even if it used as farm machinery.

For ice houses, taxability depends more on amenities. A basic fishing shelter — the kind that’s easily transportable and provides a modicum of protection from the biting cold and wind — is subject to North Dakota sales tax.

Not so for premium ice houses, the kind that more closely resemble an RV than a shack. According to the North Dakota State Tax Commission, “A premium ice fishing house that is a trailer with features such as a bed or bunk, stove or cooktop, refrigerator or heating system” are exempt from sales and use tax. However, they must be registered as a vehicle and are therefore subject to the state’s 5 percent motor vehicle excise tax.

Additional details are available from the North Dakota State Tax Commission.

Find local sales tax rates in North Dakota here.