TAXES & INCENTIVES
Everything You Need to Expand or Relocate
A Bustling, Business-Friendly Community
Grand Forks is more than a great place to do business; it’s a community built to help businesses grow. The Grand Forks Region Economic Development Corporation works directly with companies to identify financing packages, connect them with incentive programs, and cut through complexity so your expansion or start-up can move forward with confidence. From North Dakota’s low corporate tax rates and generous exemptions to locally-administered financing tools like PACE and the EDA Revolving Loan Fund, the Greater Grand Forks region gives your business a structural advantage from day one. Let’s put North Dakota’s economic strengths to work for you.
FAST FACTS
Direct Financing Programs
PACE - FlexPACE
Interest Rate Buy Down: 5% Below Rate*
The PACE and FlexPACE programs combine resources from the local community and the Bank of North Dakota PACE Fund to buy down the interest rate on a loan through a lead lender, making capital more accessible for qualifying businesses.
PACE Qualifications: Primary Sector Certified business, must meet minimum investment or jobs created criteria.
FlexPACE Qualifications: Must be within a priority business area of the City of Grand Forks Growth Fund: childcare, rural development opportunities, or unique quality of life offering.
EDA RLF: Economic Development Authority Revolving Loan Fund
Leverage Financing at a Rate of 2:1
Economic Development Authority Revolving Loan Fund supports land and equipment/machinery purchases, inventory and other working capital, and construction.
Loan Policies: Adequately collateralized, the interest rate is either 400 basis points lower than the prime interest rate or 75% of the prime interest rate listed in the Wall Street Journal.
ND Development Fund
Flexible Gap Financing Averaging $250,000
The North Dakota Development Fund provides flexible gap financing through debt and equity investments for new or expanding ND primary sector businesses.
Guidelines
- Entrepreneur has realistic financial commitment at stake and principal shareholders required to guarantee debt.
- Eligible purchases include building, machinery & equipment, working capital, land purchase, construction.
LIFT: Legacy Investment for Technology Fund
5-Year Loan Usually Between $250,000 – $500,000 With 0% Interest For 3 years
The Legacy Investment for Technology Fund supports innovative businesses that diversify and strengthen North Dakota’s economy through low-interest debt financing.
Qualifications
- Deliver applied research or operational testing within specified sectors.
- Anticipated outcome of commercialization or patent of innovative technology solution.
- Expansion or creation of new company diversifying state’s economy through products, investments, jobs.
Investors & Grants
APUC: Ag Products Utilization Commission
Up to $250,000 Grant for Research, Marketing, Diversification, and More Relating to Ag Products
Creates new wealth and employment opportunities through the development of new and expanded uses of North Dakota’s agricultural products.
Project Criteria
- Demonstrate high level of profitability for jobs & wealth creation.
- Scientific & technical merit of research.
- Shared commitment for funds from other sources.
- Value-added agriculture – utilizing agricultural products.
ADD: Ag Diversification & Development Fund
Up to $250,000 Grant for Research, Marketing, Diversification, and More Relating to Ag Products
Supports new or expanding value-added agriculture businesses that demonstrate financial feasibility, enhance profitability for farmers and ranchers, create jobs and grow North Dakota’s economy through a grant program.
Eligibility
- Seeking funding for facilities for food/feed production or processing, agriculture product manufacturing, etc.
- Demonstrate high level of profitability for jobs & wealth creation.
- Commitment for funding from applicant or other sources.
ND Growth Fund: 50 South Capital
Investment for Equity Geared Toward Entrepreneurs Advancing Innovation
A $100-million multi-stage investment fund that works with smaller venture capital firms to invest in North Dakota entrepreneurs for equity in a company.
Angel Match Program
One-to-one Matching Funds up to $250,000 for Convertible Security or Direct Equity Investment
The Angel Match Program supports North Dakota entrepreneurs who are actively raising a private funding round and need additional capital to grow a scalable, primary sector business.
Eligibility: must be headquartered in North Dakota, a high-growth, early-stage startup with a path to exit in 5-10 years.
Wonderfund ND
Investment for Equity Supporting Small Businesses and Startup Companies
Team Wonderful, O’Leary Ventures, has partnered with North Dakota to invest $45 million into early-stage companies, providing valuable programs and dynamic services that meet the criteria as set forth by the US Department of Treasury’s State Small Business Credit Initiative (SSBCI).
Eligibility
- Potential for profitability and scale.
- ESG and DEI considerations.
- Economic impact in North Dakota.
Tax Exemptions & Zones
Renaissance Zone
Companies that expand into the Grand Forks designated Renaissance Zone may qualify for state and local incentives for 5 years to purchase, lease, or improve real estate property within the zone.
FTZ: Foreign Trade Zone
Within the FTZ, foreign goods are considered international commerce and are not subject to customs duties unless or until they enter the U.S. In addition, raw materials, parts, and components can enter duty-free. Goods can then be assembled, manufactured or processed – and the final product reexported – without paying customs duties.
Property Tax Exemption
The City of Grand Forks has a commercial property tax exemption where the incremental value derived from buildings, renovations, and expansions are exempt from taxation for 5 years to encourage improvements, renovations, or expansion to existing commercial real estate.
Automation Tax Credit
The state offers an income tax credit to taxpayers for the purchase or capital lease of machinery and equipment to automate a manufacturing or animal agricultural process.
Sales & Use Tax Exemption
The state offers a tax exemption on purchases of machinery or equipment used for manufacturing, agricultural commodity processing, or recycling as well as computer and telecommunications equipment, qualified data centers, construction materials for ag processing, and more. Companies have up to 1 year after equipment has been put into production to claim the exemption.
Corporate Income Tax Exemption
The state offers a New or Expanding Business Income Tax Exemption for up to 5 years.
Workforce Programs
InternGF
Up to $3,500 to Offset the Cost of Intern’s Wages.
Provides funding and support from the UND Center for Innovation to support new internships, expanding opportunities for UND students.
ND New Jobs Training Program
Cost of Training New Employees is Covered Through the Capture of Income Tax Withholdings.
Assists new or expanding primary sector businesses with training new employees. Obtain funds through a loan, reimbursement grant, or self-financing option. Funds are paid for in whole or in part with the income tax withheld from new employees.
Operation Intern
Businesses Receive Up to $4,000 in Matching Funds for Internships
Provides funding from the Department of Commerce to support internships for in-demand career fields. Funds can be used for items like wages, tools and equipment, essential training, or tuition reimbursement.
ND Career Builders Scholarship & Loan Repayment
Matching Funds to Help Pay for Education Needed for High-Need and Emerging Occupations.
Provides $1 of state funds for each $1 of matching funds, up to $17,000 per recipient. Receive a scholarship while enrolled in college or student loan repayment once recipient has finished their program of study and are seeking employment in an in-demand occupation within North Dakota.
DoD Skillbridge
Cost of Salary and Benefits of a Separating Military Service Member is Covered by the DOD
The DOD SkillBridge program is an opportunity for military service members to gain valuable civilian work experience through specific industry training, apprenticeships, or internships during the last 180 days of service.
CONTACT US
Want to learn more about taxes and incentives in Grand Forks, ND? Reach out to our team for additional resources and answers to your questions.
Becca Cruger
Director of Economic Development
Phone: 701.738.0009
Email: BeccaC@grandforks.org
Closing the Financial Gap
EDA Revolving Loan Fund
- Businesses may receive a low-interest loan, up to $400,000*, through the Grand Forks Growth Fund, for working capital or to purchase machinery, equipment, and real property in Grand Forks County. Federal requirements may apply to loan eligibility.
MATCH Loan
- The loan carries an interest rate equal to the equivalent term U.S. Treasury Note rate plus .25 – .5 percent. You must have a “BBB” rating or letter of credit to qualify. Loan amount is determined based on site of project. The term varies up to 20 years.
North Dakota Development Fund
- Provides gap financing to primary sector businesses through loans not available from most conventional lenders. Loan funds may be used for real estate, equipment, and working capital.
*Dollar amount varies by year and by amount revolved back into the fund.
Setting the PACE
PACE Loan
- Through the Participating in Assisting Community Expansion (PACE) program, the Grand Forks Growth Fund may provide a no-interest, deferred loan up to $269,000 to leverage a Bank of North Dakota grant up to $500,000 to collectively reduce the interest paid on a loan used to acquire land or equipment or for working capital. New job-creating projects are eligible for PACE funding.
Flex PACE
- Don’t fit the traditional definition for the PACE program? FlexPACE may be an option! The Grand Forks Growth Fund may provide a loan up to $107,000 to leverage Bank of North Dakota support up to $200,000.
- Flex PACE Daycare
- Licensed, non-residential child care projects in Grand Forks County may qualify for this targeted program intended to encourage retention and expansion of child care availability in the region. The Grand Forks Growth Fund may provide a loan up to $161,000 to leverage BND support up to $300,000.
- Other PACE
- Through the Bank of North Dakota, there are also PACE programs to support nontraditional agriculture activities as well as a program for biodiesel and ethanol production and livestock operations.
- Flex PACE Daycare
Cutting Your Tax Bill
Corporate Income Tax
- The state of North Dakota may abate taxes for 5 years on increased income realized from a new or expanding primary sector business that produces new wealth in the state.
Computer Equipment
- The state offers an exemption to purchase non-replacement computer and telecommunications equipment integral to operating a new or expanding primary sector business.
Manufacturing Equipment
- Equipment for manufacturing, agricultural processing or recycling may qualify for a sales and use tax exemption. The expansion must increase production volume, employment or types of products to be manufactured/processed.
Real Estate
- The City of Grand Forks has an approximate commercial/industrial tax rate of 1.9 percent of land and building market value. The City of Grand Forks may consider a five-year declining abatement on the incremental value for new or expansion construction for primary sector businesses. Approval, which may take up to 60 days, must be obtained before the project begins.
Research Expense
- Companies conducting new, qualified research in North Dakota may qualify for tax credits of 25 percent for the first $100,000 and 8 percent for amounts exceeding $100,000. Credit may be carried forward and/or transferred.
Workforce Recruitment
- A tax credit may be available for companies that employ extraordinary recruitment methods to recruit and hire employees for hard-to-fill positions.
Supporting Grand Forks’ Next Generation
- This local program is a partnership with the University of North Dakota to provide EDC investors or early-stage companies matching funds up to $3,500 for new internships. This may be paired with a state program, Operation Intern.
New Jobs Training
- This fund may offset the cost of training for newly hired employees for a primary sector business expansion or start-up. Funds are made available through the capture of the state income tax withholding generated from permanent, full-time new positions. Approval must be obtained prior to hiring.
Federal Programs
- Companies may also qualify for federal Work Opportunity Tax Credit and On-the-Job Training programs.
Operation Intern
Get More by Growing in Grand Forks
New Venture Capital Fund
- An innovative program that provides flexible financing through equity investments to early-stage companies that have completed product development and have established market acceptance. The program may invest up to $300,000 with appropriate capital structures.
Renaissance Zone
- Companies that expand into the Grand Forks designated Renaissance Zone may qualify for state and local incentives for five years to purchase, lease or improve real estate property within the zone.
Red River Corridor Fund
- This fund may provide small businesses a credit guarantee and/or angel investment, providing greater access to capital and minimizing a bank’s risk for loans to support a company’s growth.
Closing the Financial Gap
EDA Revolving Loan Fund
- Businesses may receive a low-interest loan, up to $400,000*, through the Grand Forks Growth Fund, for working capital or to purchase machinery, equipment, and real property in Grand Forks County. Federal requirements may apply to loan eligibility.
MATCH Loan
- The loan carries an interest rate equal to the equivalent term U.S. Treasury Note rate plus .25 – .5 percent. You must have a “BBB” rating or letter of credit to qualify. Loan amount is determined based on site of project. The term varies up to 20 years.
North Dakota Development Fund
- Provides gap financing to primary sector businesses through loans not available from most conventional lenders. Loan funds may be used for real estate, equipment, and working capital.
*Dollar amount varies by year and by amount revolved back into the fund.
Setting the PACE
PACE Loan
- Through the Participating in Assisting Community Expansion (PACE) program, the Grand Forks Growth Fund may provide a no-interest, deferred loan up to $269,000 to leverage a Bank of North Dakota grant up to $500,000 to collectively reduce the interest paid on a loan used to acquire land or equipment or for working capital. New job-creating projects are eligible for PACE funding.
Flex PACE
- Don’t fit the traditional definition for the PACE program? FlexPACE may be an option! The Grand Forks Growth Fund may provide a loan up to $107,000 to leverage Bank of North Dakota support up to $200,000.
- Flex PACE Daycare
- Licensed, non-residential child care projects in Grand Forks County may qualify for this targeted program intended to encourage retention and expansion of child care availability in the region. The Grand Forks Growth Fund may provide a loan up to $161,000 to leverage BND support up to $300,000.
- Other PACE
- Through the Bank of North Dakota, there are also PACE programs to support nontraditional agriculture activities as well as a program for biodiesel and ethanol production and livestock operations.
- Flex PACE Daycare
Cutting Your Tax Bill
Corporate Income Tax
- The state of North Dakota may abate taxes for 5 years on increased income realized from a new or expanding primary sector business that produces new wealth in the state.
Computer Equipment
- The state offers an exemption to purchase non-replacement computer and telecommunications equipment integral to operating a new or expanding primary sector business.
Manufacturing Equipment
- Equipment for manufacturing, agricultural processing or recycling may qualify for a sales and use tax exemption. The expansion must increase production volume, employment or types of products to be manufactured/processed.
Real Estate
- The City of Grand Forks has an approximate commercial/industrial tax rate of 1.9 percent of land and building market value. The City of Grand Forks may consider a five-year declining abatement on the incremental value for new or expansion construction for primary sector businesses. Approval, which may take up to 60 days, must be obtained before the project begins.
Research Expense
- Companies conducting new, qualified research in North Dakota may qualify for tax credits of 25 percent for the first $100,000 and 8 percent for amounts exceeding $100,000. Credit may be carried forward and/or transferred.
Workforce Recruitment
- A tax credit may be available for companies that employ extraordinary recruitment methods to recruit and hire employees for hard-to-fill positions.
Supporting Grand Forks’ Next Generation
- This local program is a partnership with the University of North Dakota to provide EDC investors or early-stage companies matching funds up to $3,500 for new internships. This may be paired with a state program, Operation Intern.
New Jobs Training
- This fund may offset the cost of training for newly hired employees for a primary sector business expansion or start-up. Funds are made available through the capture of the state income tax withholding generated from permanent, full-time new positions. Approval must be obtained prior to hiring.
Federal Programs
- Companies may also qualify for federal Work Opportunity Tax Credit and On-the-Job Training programs.
Operation Intern
Get More by Growing in Grand Forks
New Venture Capital Fund
- An innovative program that provides flexible financing through equity investments to early-stage companies that have completed product development and have established market acceptance. The program may invest up to $300,000 with appropriate capital structures.
Renaissance Zone
- Companies that expand into the Grand Forks designated Renaissance Zone may qualify for state and local incentives for five years to purchase, lease or improve real estate property within the zone.
Red River Corridor Fund
- This fund may provide small businesses a credit guarantee and/or angel investment, providing greater access to capital and minimizing a bank’s risk for loans to support a company’s growth.
STAY INFORMED
Stay up to date with the latest information from the Grand Forks Region Economic Development Corporation.