HOW NORTH DAKOTA INCENTIVIZES BUSINESSES LARGE AND SMALL.
One way that North Dakota supports business expansion is through its wide array of innovative and aggressive incentives programs.
The Department of Commerce states: “We go beyond traditional approaches, offering innovative programs that directly target high-growth industries and long-term competitiveness. These strategies set the state apart from others by combining aggressive tax policy with unique, business-friendly frameworks that accelerate investment and expansion.”
North Dakota’s business environment is so friendly that CNBC last year ranked the Peace Garden State No. 1 in Business Friendliness in the nation. CNBC specifically cited North Dakota’s low corporate tax rates (ranging from 1.41% to 4.31%) and its minimal regulation.
While North Dakota already ranks as one of the lowest-cost states for operating a business, Commerce uses its many incentive programs to help drive fast-growing companies to establish operations in North Dakota. The state specifically outlines these target industry sectors: manufacturing and technology; energy and mining; and agriculture and value-added agriculture.
Incentive programs are administered through the Economic Development & Finance office of Commerce. This division was set up by the state to coordinate the state’s economic development resources to attract, retain and expand wealth-creating ventures.
The crown jewel of these programs is the North Dakota Development Fund. NDDF was created in 1991 to offer flexible funding for new or expanding North Dakota businesses. It provides “flexible gap financing” through loans and equity investments that are not available from most conventional lenders or investors. Funds are available to new and expanding North Dakota primary sector businesses.
NDDF makes investments of up to $3 million through innovative financing mechanisms including direct loans, participation loans, and subordinated debt and equity investments. NDDF also administers the Regional Rural Revolving Loan Fund, the Angel Match Program and the Child Care Loan Program.
In 2024 and 2025, Commerce used NDDF to facilitate some of the biggest deals in state history. For example, Cerilon GTL was awarded a $32 million loan from NDDF for building the first large-scale, natural gas-fed gas-to-liquids (GTL) facility in North America in Trenton in Williams County. Upon completion, the facility will have a daily processing capacity of 24,000 barrels and will use a cutting-edge carbon capture and storage technology, making it the first of its kind globally. The competitive project by Calgary-based Cerilon represents a $3.2 billion capital investment that upon completion in 2030 will employ at least 100 full-time workers.
A large grain elevator in Napoleon, North Dakota, reflects the status of agriculture as one of the state’s target industries.
Photo by Poppy Mills courtesy of North Dakota DOT
Cerilon also received a $9.5 million grant from the North Dakota Industrial Commission and an $8.5 million loan issued through the Clean Sustainable Energy Authority. Separately, Williams County issued $16 million in low-interest loans to Cerilon; and neighboring McKenzie County approved a $5 million loan to Cerilon via the county’s Jobs Development Authority.
Also in the energy sector, Williston-based Valence Natural Gas Solutions secured a $3 million loan from NDDF to support the completion of six micro flare gas capture units around the state. The new facilities are designed to reduce emissions and capture valuable natural gas resources.
Help for Small Businesses
While large projects like these garner headlines, smaller investors also may qualify for state assistance. For example, last January, the North Dakota Department of Commerce announced that four smaller companies had been approved to receive a total of $3 million in funding through NDDF:
Airtonomy Inc., doing business as Thread, received a $2 million investment for working capital.
Little Miracles Learning Center LLC was approved for a $340,000 loan to expand an existing child care facility and increase capacity.
A $1 million SAFE investment for working capital was approved for Checkable Medical Inc.
Shining Lights Children’s Program LLC was approved for a $160,000 loan to purchase a property for expansion.
Firing Up Data Centers
North Dakota has also identified data centers as a sector worth attracting and growing. To facilitate that, the state passed landmark data center incentive legislation last year.
It did not take long for the new law to reel in a big catch. In late 2025, Los Angeles-based Critical Data House selected a site in Williston for a $10 billion, 455-MW data center complex in part because of the state’s newly enacted data center incentives legislation. According to the act passed in 2025, the bill provides a sales and use tax exemption for enterprise information technology equipment and computer software purchased for use in a qualified data center.
The law defines a qualified data center as “a facility that serves as a centralized repository for the storage, management, and dissemination of electronic data and information, located on a single parcel or contiguous parcels, comprised of one or more buildings consisting of a minimum aggregate amount of 15,000 square feet, of which no fewer than 50% is used for data processing, and which was newly constructed or substantially refurbished after December 31, 2020. The data center must be certified by the Tax Commissioner as a qualified data center and have a sophisticated fire suppression and prevention system and enhanced security features.”
Competitive Incentive Programs
NDDF and the new data center law are just two of the many tools used by North Dakota to recruit growing companies. Others include:
Bank of North Dakota (BND): Unique state-owned bank providing low-interest loans, such as PACE and Flex PACE, to buy down interest rates.
Innovate ND: A voucher-based reimbursement program offering up to $50,000 for entrepreneurs to validate business ideas.
Tax Incentives: They include 5-year property tax exemptions, Renaissance Zones, and specialized sales/use tax exemptions for manufacturers and primary sector businesses.
Advance ND: Provides deal-closing low-interest loans up to $20 million for large industrial projects.
Automation Tax Credit: A taxpayer is allowed an income tax credit for the purchase or capital lease of machinery and equipment to automate a manufacturing or animal agricultural process in North Dakota. The business must be certified as a primary sector business. The credit is equal to up to 15% of the cost of the machinery and equipment.
Corporate Income Tax Exemption: New corporations that qualify as primary sector businesses may pay $0 in corporate income taxes for the first five years of their existence in North Dakota, if they apply for and are granted an exemption through the State Board of Equalization.
Property Tax Exemption: Personal property is exempt from taxation with the exception of certain oil and gas refineries and utilities in North Dakota. This means there is no property tax on items such as office equipment, inventory, accounts receivable or materials.
Research Expense Credit: An individual, estate, trust, partnership, corporation or limited liability company is allowed an income tax credit for conducting research in North Dakota. The credit is equal to a percentage of the excess of qualified research expenses in North Dakota over the base period research expenses.
RESOURCES
To learn more about each of these programs and how to apply for funding, go to:
https://www.commerce.nd.gov/economic-development-finance/finance-and-incentives/tax-incentives
Commerce says its strategic goal is to create “financial packages and tax incentives to assist new and expanding businesses to enhance profitability. The state has specifically designed its business and investment programs to deliver quicker, quality service along with more capital during a company’s start-up, expansion or relocation.”
To learn more about tax incentives available to qualifying investors in North Dakota, go to:
https://www.tax.nd.gov/tax-exemptions-credits
A detailed overview of every North Dakota incentive program can be downloaded here:
https://www.commerce.nd.gov/economic-development-finance/finance-and-incentives
