57-40.3-04. Exemptions

57-40.3-04. Exemptions

There are specifically exempted from the provisions of this chapter and from computation of

the amount of tax imposed by it the following:

1. Any motor vehicle acquired by, or leased and in the possession of, a resident disabled

veteran under the provisions of Pub. L. 79-663 [38 U.S.C. 3901], a resident disabled

veteran who has a one hundred percent service-connected disability as determined by

the department of veterans' affairs, or a resident disabled veteran who has an

extra-schedular rating to include individual unemployability which results in the veteran

being paid at the one hundred percent rate as determined by the department of

veterans' affairs who registers, or is eligible to register, the vehicle with a distinctive

license plate issued by the department of transportation under subdivision j of

subsection 2 of section 39-04-18. A surviving spouse who is receiving United States

department of veterans affairs dependency and indemnity compensation is eligible for

the exemption in this subsection. If the determination of disability or service-connected

death occurs subsequent to the qualifying veteran's death through application of a law

that renders a surviving spouse of a qualifying veteran eligible for United States

department of veterans affairs disability and indemnity compensation, the

determination for purposes of the exemption under this subsection is presumed to

precede the veteran's death. Sufficient proof of receipt of United States department of

veterans affairs dependency and indemnity compensation includes correspondence

directed to a surviving spouse of a qualifying veteran by the United States department

of veterans affairs which indicates the surviving spouse is a survivor of the qualifying

veteran and is in receipt of United States department of veterans affairs dependency

and indemnity compensation.

2. a. Any motor vehicle procured by, owned, or in possession of:

(1) The federal government;

(2) The state government;

(3) A political subdivision of this state;

(4) A tribal government of a federally recognized Indian tribe within the

boundaries of any reservation in this state; or

(5) A person on behalf of the North Dakota lottery when the motor vehicle is to

be awarded as a prize in a game or promotion.

b. For purposes of this subsection, an "Indian tribe" means a tribal government

agency, instrumentality, or political subdivision that performs essential

government functions. The term does not include a business entity or agency with

the primary purpose of operating a business enterprise.

3. Motor carrier vehicles in excess of twenty thousand pounds [9071.85 kilograms] gross

weight, whether owned or leased, engaged in interstate commerce but only to the

extent their fleet miles outside North Dakota bear to their total fleet miles. For the

purposes of this subsection, "fleet miles" means those miles reported in accordance

with the international registration plan and must coincide with the mileage reporting

period required by the plan. For the purposes of this subsection, "motor carrier

vehicles" means any vehicles used upon public streets or highways for the purpose of

transporting persons or property for commercial purposes. To claim this exemption, the

motor carrier's vehicles must be both titled and registered in this state.

4. Any motor vehicle transferred without consideration to or from a person within thirty

days prior to that person entering into the armed services of the United States or within

thirty days after discharge therefrom or while serving in the armed services of the

United States; provided the person certifies to the director of the department of

transportation that the transfer is made only by reason of entering into, serving in, or

being discharged from the armed services of the United States.

5. a. A motor vehicle acquired by inheritance from, by bequest of, or operation of a

days after discharge therefrom or while serving in the armed services of the

United States; provided the person certifies to the director of the department of

transportation that the transfer is made only by reason of entering into, serving in, or

being discharged from the armed services of the United States.

5. a. A motor vehicle acquired by inheritance from, by bequest of, or operation of a

trust created by a decedent who owned it;

b. The transfer of a motor vehicle that was previously titled or licensed in the name

of an individual or in the names of two or more joint tenants and subsequently

transferred without monetary consideration to one or more joint tenants, including

a transfer into a trust in which one or more of the joint tenants is beneficiary or

trustee;

c. The transfer of a motor vehicle by way of gift between a husband and wife, parent

and child, grandparent and grandchild, or brothers and sisters, including a

transfer into a trust in which the trustor and beneficiary occupy one of these

relationships;

d. The transfer of a motor vehicle without monetary consideration into a trust in

which the beneficiary is the person in whose name the motor vehicle was

previously titled or licensed;

e. The transfer of a motor vehicle to reflect a new name of the owner caused by a

business reorganization in which the ownership of the reorganized business

remains in the same person or persons as before the reorganization, if the title

transfer is completed within one hundred eighty days from the effective date of

the reorganization;

f. The transfer of a motor vehicle previously transferred under subdivision e which

returns ownership to the previous owner; and

g. The transfer of a motor vehicle without monetary consideration from a revocable

living trust to the trustor or to the spouse, child, or sibling of the trustor.

6. Motor vehicles transferred between a lessee and lessor; provided, that the lessee has

been in continuous possession of such vehicle for a period of one year or longer, and

further provided that the lessor has paid either the tax imposed under section

57-40.3-02 at the time of titling or licensing the vehicle in this state or the use tax

imposed by chapter 57-40.2.

7. Any motor vehicle in the possession of and used exclusively by a nonprofit senior

citizens' or handicapped persons' corporation for transportation of the elderly or

disabled; provided, that the motor vehicle may not be used for commercial activities.

8. Any motor vehicle that does not exceed ten thousand pounds [4535.92 kilograms]

gross weight and which is acquired by, or leased and in the possession of, a

permanently physically disabled, licensed driver who is restricted to operating only

motor vehicles equipped with special controls to compensate for the disability, or by

permanently physically disabled individuals who have either surrendered or who have

been denied a driver's license because of a permanent physical disability, provided the

individuals obtain from the director of the department of transportation or the director's

authorized representative a statement that the individual has a restricted driver's

license or has either surrendered or has not been issued a driver's license because of

a permanent physical disability; a copy of the statement must be attached to the

application for registration of the title to the motor vehicle for which the exemption from

tax under this chapter is claimed. If the applicant does not have the statement at the

time of application for registration of the title, motor vehicle excise tax is due and must

be paid. However, if the applicant provides the statement to the director of the

department of transportation, the applicant may apply for a refund of the taxes paid in

the manner provided in chapter 57-40.4. Any motor vehicle acquired subject to this

exemption must be disposed of either by transfer to another permanently physically

ration of the title, motor vehicle excise tax is due and must

be paid. However, if the applicant provides the statement to the director of the

department of transportation, the applicant may apply for a refund of the taxes paid in

the manner provided in chapter 57-40.4. Any motor vehicle acquired subject to this

exemption must be disposed of either by transfer to another permanently physically

disabled person or by a trade-in on another exempt sale or by a transfer involving a

sale subject to sales or use tax before another motor vehicle can be acquired subject

to the benefits of this exemption clause.

9. Any motor vehicle registered under chapter 39-04 for the first time by a person other

than a manufacturer of motor vehicles, as defined in section 39-01-01, who assembled

the motor vehicle for that person's own use.

10. Motor vehicles acquired by, or leased and in the possession of, any parochial or

private nonprofit school to be used for the transportation of students; provided, that to

qualify a school must normally maintain a regular faculty and curriculum and must

have a regularly organized body of students in attendance, and provided that the

vehicles are not to be used for commercial activities.

11. Any motor vehicle with a gross vehicle weight of at least a class six, seven, or eight

chassis, purchased for installation or assembly of heavy duty equipment by a person

engaged in the business of installing or assembling the equipment, which when

completed forms an integral part of a vehicle, has limited marketability, and is not

normally sold to the general public. This exemption applies only when the

manufacturer's statement of origin is reassigned to the installer or assembler by a

licensed new motor vehicle dealer on a form prescribed by the tax commissioner. The

motor vehicle and installed equipment must be sold as a unit when completed. "Heavy

duty equipment" includes fuel delivery tanks, refuse bodies, cranes, aerial bucket

devices, bus bodies regardless of gross vehicle weight, and digger derricks.

12. Motor vehicles acquired through purchase or gift by any nonprofit county and local

historical societies that are exempt from federal income taxation under section 501(c)

(3) of the United States Internal Revenue Code [26 U.S.C. 501(c)(3)].

13. Any motor vehicle acquired by, or leased and in the possession of, a resident who was

a prisoner of war and who registers the vehicle with a distinctive license plate issued

by the department of transportation under subdivision o of subsection 2 of section