North Dakota isn’t particularly lenient or strict with their liquor laws. Their rules and regulations are somewhat standard although they are much clearer than other states.

To help you understand what is expected of North Dakota liquor businesses, we have grouped the most important rules and regulations.

Laws, Taxes, And Licensing Requirements By Type

Depending on the type of business you’re creating, the licensing and permits required will be different. The same can be said for taxation.

Brewer Taproom

A brewer taproom is a beer manufacturer that sells its product onsite and to retailers. Selling onsite doesn’t make them a bar, but a tasting room.

Brewer taprooms need a Brewer Taproom License, as well as a North Dakota Sales, Use, and Gross Receipts Tax Permit. You’ll also need the Federal Basic Permit. The annual fee for these licenses is $500.

This will give the company the ability to sell its product at wholesale and retail prices, however, it cannot sell more than 25,000 barrels of beer per year.

Anything sold or used as free samples must be taxed under the wholesale excise tax. The amount of taxation depends on the gallonage and containers.

Bulk containers such as kegs or barrels will be taxed at $0.08 per wine gallon or $0.21 per liter. Beer sold in cans or bottles will be taxed at $0.16 per wine gallon or $0.42 per liter.

There will also be an alcoholic beverage gross receipts tax of 7% and any additional sales such as glasses or literature are taxed at 5%. This is across all alcoholic beverages sales.

Domestic Winery

A domestic winery is a manufacturer which creates wine. There are no ingredient restrictions for wine creation in North Dakota. A domestic winery can offer sales on location and tasting sessions.

To create a domestic winery, you’ll need an annual North Dakota Domestic Winery License. This license grants you the ability to create and sell wine at retail and wholesale prices.

Each winery will need a license per location. The term “domestic” means in North Dakota.

Another permit you’ll need is the Basic Permit under Federal Alcohol Administration Act (Federal Basic Permit).

The fee for this license is $100 per year.

With the licenses in place, you can produce wine at retail and wholesale prices. However, the winery cannot produce more than 25,000 gallons of wine per year.

You can purchase up to 4,000 gallons of unfinished wine per calendar year, and this wine doesn’t need to be in label-approved containers.

Anything sold or used as free samples are eligible for the whole excise tax. The tax must be paid annually but is calculated as follows:

Any wine (including sparkling) which contains less than 17% alcohol by volume is taxed at $0.5 per wine gallon or $0.132 per liter.

Any wine containing between 17% and 24% alcohol volume will be taxed at $0.60 per wine gallon or $0.159 per liter.

Domestic Distillery

A domestic distillery is located in North Dakota and produces 50% or more of its product using North Dakota farms. This doesn’t include water. These distilleries must have both a tasting room and a manufacturing facility in the same location.

To create a domestic distillery, your company needs the North Dakota Domestic Distillery License. It’s an annual license that allows the company to sell distillery products at retail and wholesale prices.

Each distillery must have a license per location. The Federal Basic Permit is also required.

The North Dakota Domestic Distillery License costs $100 per year, and you’ll need to send in a blueprint of the premises to obtain the license.

With the license, you can produce distilled spirits, but cannot produce more than 25,000 gallons per year. These spirits also need to contain no less than 51% of North Dakota farm products.

If you produce less than 12,000 proof gallons a year, you can sell and deliver the spirits to licensed retailers.

All spirits made and sold, including free samples, come under the wholesale excise tax. The tax is measured at $2.50 per wine gallon or $0.66 per liter.

Manufacturing Distillery

A manufacturing distillery has one location which manufactures the product and a secondary or satellite location for selling and tasting the product.

To be licensed as a manufacturing distillery your company needs a North Dakota Manufacturing Distillery License. This is an annual license that costs $100 a year per manufacturing location and $100 a year per satellite location.

Along with the North Dakota Manufacturing Distillery License, you’ll also need the Federal Basic Permit.

Once the licensing has been approved, your company can produce distilled spirits of no more than 25,000 gallons. These spirits must be manufactured using no less than 51% of North Dakota farm products.

The company can sell the manufactured spirits directly to licensed North Dakota retailers as long as they’re producing no more than 12,000 proof gallons per year.

The wholesale excise tax includes all spirits sold and manufactured, including free samples. The tax fee is $2.50 per wine gallon or $0.66 per liter.

Microbrew Pub

A microbrew pub can create its own product but must use a wholesaler to distribute the product. To gain permission for this manufacturing type, the company needs a North Dakota Microbrew Pub License.

The fee for this license is $500 per year, and a blueprint of the premises is needed for the license to be approved.

You will also need the Federal Basic Permit.

With the North Dakota Microbrew Pub License, the microbrew pub cannot produce more than 10,000 barrels of beer per year.

However, they can transfer the beer to an affiliated microbrew pub as long as they have at least 85% ownership in that company.

The microbrew pub receiving the beer must produce no less than 5,000 gallons of beer in the previous year.

The beer is taxed at $0.80 per wine gallon or $0.21 per liter if sold in bulk containers such as kegs or barrels. In bottles the tax changes to $0.16 per wine gallon or $0.42 per liter.

Just Manufacturing

If your company isn’t selling onsite or doesn’t require a tasting room, you can choose the North Dakota Alcoholic Beverage Manufacturing License. It costs $100 per year and still requires a Federal Basic Permit.

The license allows the production of all alcoholic beverages but can only be sold to a licensed North Dakota wholesaler.

Final Thoughts

North Dakota has very clear licensing requirements, laws, and fees. They are easy to find and simple to follow, preventing fines through misunderstandings.