How to Start a Contracting Business in North Dakota

Start with the $4,000 line and the class it puts you in

N.D.C.C. 43-07-02(1) sets the threshold in one sentence: a person may not engage in the business or act in the capacity of a contractor in North Dakota "when the cost, value, or price per job exceeds the sum of four thousand dollars ... without first having a license as provided in this chapter." The Secretary of State applies that to anyone "who engages in the business of construction" above that figure, and names subcontractors, general contractors, public contractors and nonresident contractors as covered.

The definition of contractor in N.D.C.C. 43-07-01(1) is wide and includes maintenance-type work: any person "engaged in the business of construction, repair, alteration, dismantling, or demolition" of bridges, highways, roads, streets, buildings, airports, dams, drainage or irrigation ditches, sewers, water or gas mains, water filters, tanks, towers, oil, gas, or water pipelines "and every other type of structure, project, development, or improvement coming within the definition of real or personal property," including construction, alteration or repair of property held for sale or rental, and expressly including subcontractors, public contractors and nonresident contractors.

Then choose a class, because North Dakota prices and limits the licence by the value of a single project. Under N.D.C.C. 43-07-07(1) a class A licence carries "no limitation as to the value of any single contract project," class B is capped at five hundred thousand dollars per project, class C at three hundred thousand, and class D at one hundred thousand. The fees follow in subsection (2): $450, $300, $225 and $100 to obtain, and subsection (3) sets renewals at $90, $60, $45 and $30.

The exceptions are short. N.D.C.C. 43-07-08 disapplies the chapter only to authorised representatives of the United States, the state, or a county, municipality, irrigation district, reclamation district or other political corporation, and to a person furnishing a fabricated or finished product, material or article of merchandise "that is not incorporated into or attached to real property by such person so as to become affixed thereto." Supplying is outside; installing what you supplied is not.

• Above $4,000 per job: state contractor licence required before the work.
• Class A: no project value limit. Class B: $500,000. Class C: $300,000. Class D: $100,000.
• Subcontractors, public contractors and nonresident contractors are all inside the requirement.
• Repair, alteration, dismantling and demolition all count as contracting.
• Supplying material you do not attach yourself is outside the chapter.

Official sources: N.D.C.C. Chapter 43-07 (Contractors), published by the North Dakota Legislative Branch; North Dakota Secretary of State: Contractors licensing

What the application asks for, and the two things it will not let you skip

N.D.C.C. 43-07-04(1) requires an applicant of eighteen or older to file, on forms the registrar prescribes, "an application under oath containing a statement of the applicant’s experience and qualifications as a contractor," specifying the class of licence sought. Two attachments come with it: a copy of a certificate of liability insurance, and "a statement from North Dakota workforce safety and insurance that the contractor has secured workforce safety and insurance coverage satisfactory to workforce safety and insurance." The Secretary of State adds that the liability certificate must name the Secretary of State as certificate holder.

The registrar may ask for more. The same subsection allows the registrar to require other information to determine eligibility, including criminal history record information of the applicant or of the officers, members or partners of the applicant, at the applicant’s expense. N.D.C.C. 43-07-04(2) requires written notice and a ten-day cure period if the licence is not granted, with an appeal to the district court of the applicant’s county of residence or Burleigh County.

A conviction is not automatically disqualifying. N.D.C.C. 43-07-04.1(2) provides that conviction of an offence does not make a person ineligible "unless, following conviction of any offense, the person is not sufficiently rehabilitated under section 12.1-33-02.1," while subsection (1) lets the registrar refuse or revoke for false or misleading application information, a conviction with direct bearing on the ability to serve the public as a contractor, or dishonest or fraudulent conduct the registrar finds injurious to the public.

One thing you will not be buying. N.D.C.C. 43-07-11, headed "Contractor’s bond - Requirements," reads "Repealed by S.L. 1995, ch. 397, sec. 9." There is no contractor bond requirement in the chapter, and we publish no North Dakota bond figure anywhere. Anything telling you otherwise is describing a section that has not existed for thirty years.

Official sources: N.D.C.C. Chapter 43-07 (Contractors), published by the North Dakota Legislative Branch; North Dakota Secretary of State: Contractors licensing

The entity, the trade name, and the way they can cost you the licence

North Dakota business registration runs through FirstStop, the Secretary of State’s online system, and the Secretary of State sets out four steps: determine your business structure, choose a name, select a registered agent, and file in FirstStop. Registration of a domestic or foreign LLC is $135, an amendment is $50, and termination or withdrawal is $20. A trade name registration is $25.

The recurring filing is annual and its date depends on what kind of entity you are. The Secretary of State states an annual report deadline of November 15 for a Business LLC or PLLC and April 15 for a Farm/Ranch LLC or ALF LLC, with the annual report fee at $50 for domestic and foreign LLCs. A professional LLC must file a Certificate of Professional License with its articles of organization, and from January 1, 2027 must include it annually with the report.

Here is where entity housekeeping stops being housekeeping. N.D.C.C. 43-07-04(3) lets the registrar classify a contractor licence as not in good standing where the contractor fails to maintain active corporation or limited liability company status or foreign registration, to file or renew a trade name registration under chapter 47-25, to file or renew a fictitious name certificate under chapter 45-11, or to maintain an LLP or limited partnership registration. Subsection (4) then requires the contractor to "cease soliciting or entering new contract projects," and directs the registrar to revoke the licence if the defect is not cured within thirty days of the notice or if the contractor takes new work while not in good standing.

A missed $50 annual report is therefore not a $50 problem in North Dakota. It is a route to a licence that is not in good standing, and a licence that is not in good standing is a step away from being deemed unlicensed under a chapter whose licence requirement is welded to the right to sue.

Official sources: North Dakota Secretary of State: Register a Business; North Dakota Secretary of State: Limited Liability Company (LLC); N.D.C.C. Chapter 43-07 (Contractors), published by the North Dakota Legislative Branch

Sales and use tax: you are the consumer, and you cannot show it as tax

North Dakota takes the opposite approach from a state that makes contractors collect tax from owners. The Office of State Tax Commissioner treats a contractor who incorporates tangible personal property into real property as the final user and consumer of that property, which makes the contractor liable for sales or use tax on the purchase price rather than the homeowner.

The billing consequence catches people who came from a retail background. The tax the contractor paid "can be passed to the customer as a materials cost. It cannot be itemized as a sales tax charge on the customer’s invoice." Putting a sales tax line on a construction invoice is therefore wrong in North Dakota even where the amount is right.

Two situations change the arithmetic. Where a contractor also runs a retail operation and pulls materials from stock bought for resale, the Tax Commissioner requires use tax on the contractor’s cost of those materials. Where materials were bought outside North Dakota, tax paid to the other state is credited: nothing further is due if the other state’s tax equalled or exceeded North Dakota’s, and the difference is due if it was less.

Public work adds a document. The Tax Commissioner requires a Contractor’s Clearance letter when bidding on state or local government contracts and states that these letters "automatically renew in November, unless the contractor has tax debt." That is separate from, and additional to, the tax-clearance condition in N.D.C.C. 43-07-11.1, which makes a contractor ineligible to enter a public contract until a satisfactory showing that all delinquent income, sales or use taxes have been paid, with a certificate from the tax commissioner satisfying the requirement.

Official sources: North Dakota Office of State Tax Commissioner: Tax Responsibilities for Contractors; North Dakota Office of State Tax Commissioner: Sales and Use Tax; North Dakota Office of State Tax Commissioner: Contractors; N.D.C.C. Chapter 43-07 (Contractors), published by the North Dakota Legislative Branch

Electrical and plumbing are licensed separately, by their own boards

A contractor licence under chapter 43-07 is about the value of your contracts, not about your trade. The trades are licensed under their own chapters, and one of the grounds for discipline in N.D.C.C. 43-07-14(1)(e) is "Engaging in work without any trade or professional license as required for the work pursuant to local, state, or federal law." The contractor licence does not cover the trade licence, and holding one while lacking the other is itself a complaint ground.

Electrical work sits under N.D.C.C. chapter 43-09. Section 43-09-09(1) provides that "A person may not undertake or plan to undertake with another person to plan, lay out, supervise, install, make additions, make alterations, or make repairs, in the installation of wiring, apparatus, or equipment for electric light, heat, or power or for a power limited system, unless licensed by the board." Section 43-09-10 names the classes: master electrician, journeyman electrician, class B electrician and power limited electrician. Section 43-09-11 sets the ladder, including eight thousand hours for a journeyman "which experience may not be obtained in less than three years," one year as a licensed journeyman before master, and eighteen months in farmstead or residential wiring for class B.

Chapter 43-09 also carries a rule that catches contractors who intend to sub the work out. Section 43-09-09.2(1) provides that where a licence is required, "a person may not advertise to contract for electrical services without being licensed as or being associated with a class B electrician, master electrician, or power limited electrician, unless that person intends to contract the electrical services with a licensed electrical contractor." Section 43-09-16 lists who is outside the chapter entirely, including utility employees up to the first point of service attachment, telecommunications and cable staff, appliance dealers connecting appliances to an existing receptacle, and an individual installing a nonelectrical system.

Plumbing sits under N.D.C.C. chapter 43-18, and its trigger is geographic. Section 43-18-11 provides that no person, firm, corporation or limited liability company "shall engage in the business of a master plumber, journeyman plumber, or plumber’s apprentice in any location of this state having a public system of waterworks or sewerage unless registered and licensed to do so by the board." Section 43-18-10 requires a firm installing plumbing in such a location to have a licensed master plumber in charge at all times, and adds that "In cities of less than one thousand population and in all rural areas, a licensed journeyman plumber may engage in the business of installing plumbing." Section 43-18-09 gives the state plumbing code "the force and effect of law."

We publish no electrical or plumbing board fee for North Dakota. N.D.C.C. 43-09-13 and 43-18-13 leave the amounts to the boards, and those boards publish their schedules on hosts that are not official government sites, so we do not carry the figures. Get them from the board itself.

Official sources: N.D.C.C. Chapter 43-09 (Electricians), published by the North Dakota Legislative Branch; N.D.C.C. Chapter 43-18 (Plumbing), published by the North Dakota Legislative Branch; N.D.C.C. Chapter 43-07 (Contractors), published by the North Dakota Legislative Branch

The North Dakota calendar, and why March is the month that matters

The contractor licence runs on its own year. N.D.C.C. 43-07-01(2) defines "contractor year" as "March second through March first," and N.D.C.C. 43-07-10(3) requires the renewal application to be made "before March second of each year." The Secretary of State states it as renewing "on or before March 1 of each year." N.D.C.C. 43-07-09 adds a small mercy for new licensees: an initial licence issued in January or February is valid until March first of the following year rather than expiring weeks later.

Renewal is not just a payment. N.D.C.C. 43-07-10(1) requires the application to list "each project, contract, or subcontract completed by the licensee during the preceding calendar year in this state over the amount of fifty thousand dollars and the nature of the work," which the registrar forwards to the state tax commissioner. It also requires a current certificate of liability insurance naming the registrar as certificate holder, and a certification that all payroll taxes, including North Dakota income tax, workforce safety and insurance premiums and unemployment insurance premiums, have been submitted.

Missing it escalates on a fixed schedule. Under N.D.C.C. 43-07-10(3), a contractor who misses the March first deadline is not in good standing and "is deemed to be unlicensed within the meaning of section 43-07-02," which is the section carrying both the criminal penalty and the bar on suing. The registrar must notify by mail within sixty days after March first, and the contractor then has until June first to renew by paying a fifty dollar penalty fee plus the renewal fee and filing the application. "After the June first deadline any licenses not renewed are expired."

The entity calendar is separate again. The Secretary of State sets the LLC annual report at November 15 for a Business LLC or PLLC and April 15 for a Farm/Ranch or ALF LLC, at a $50 fee. We publish no unemployment insurance date for North Dakota at all, because Job Service North Dakota does not publish on an official government host and we will not print a date we cannot source there.

Official sources: N.D.C.C. Chapter 43-07 (Contractors), published by the North Dakota Legislative Branch; North Dakota Secretary of State: Contractors licensing; North Dakota Secretary of State: Limited Liability Company (LLC)

Public work adds three requirements a private job does not have

First, the class has to fit. N.D.C.C. 43-07-12(1) bars award of a public contract "to any contractor unless the contractor is the holder of a license in the class within which the value of the project falls." A class C holder cannot take a $400,000 public project by underbidding it.

Second, the timing has to fit. The same subsection requires a contractor to hold the licence "at least ten days before the date set for receiving bids, to be a qualified bidder," and requires a copy of the licence or the current contractor year certificate to be enclosed in the required bid bond envelope. A bid without it "may not be read or considered and must be returned to the bidder." Subsection (2) exempts bids to the department of transportation, to the public service commission, and for federal aid highway fund work.

Third, the tax record has to be clean. N.D.C.C. 43-07-11.1 makes a contractor, resident or nonresident, ineligible to enter a public contract with the state or any political or governmental subdivision "until satisfactory showing is made that the contractor has paid all delinquent income, sales or use taxes," with a certificate from the tax commissioner satisfying the requirement and a refusal to execute the contract if none is filed. Separately, the Office of State Tax Commissioner requires a Contractor’s Clearance letter when bidding on state or local government contracts, and states these "automatically renew in November, unless the contractor has tax debt."

N.D.C.C. 43-07-06 also lets any body with power to enter public contracts "impose reasonable requirements and conditions as conditions precedent to the awarding of a contract," in addition to the chapter. The state licence is a floor for public work, not a ceiling.

Official sources: N.D.C.C. Chapter 43-07 (Contractors), published by the North Dakota Legislative Branch; North Dakota Office of State Tax Commissioner: Contractors

Check the official page yourself before you file or sign

North Dakota is unusually well documented compared with most states in this library: the contractor licence classes, the fees, the thresholds and the penalties are all in the statute itself rather than in an agency fee schedule, and chapter 43-07 can be read end to end in one sitting. That is a good reason to read it rather than to trust a summary, including this one.

Three limits on what you just read. We publish no bond figure, because N.D.C.C. 43-07-11 was repealed in 1995 and no bond requirement survives in the chapter. We publish no electrical or plumbing board fee, because the statutes leave those to the boards and the boards publish on hosts that are not official government sites. And we publish no unemployment insurance date or figure, and no municipal fee, bond, threshold or renewal cycle for any North Dakota city or county, because we could not source the first on an official host and our own rules bar the second while no local jurisdiction has cleared publication review.

Official sources: N.D.C.C. Chapter 43-07 (Contractors), published by the North Dakota Legislative Branch; North Dakota Secretary of State: Contractors licensing