North Dakota has offered a state seed capital tax credit for investments in entrepreneur ventures since 1989, but was restricted to the long form until 2001. The 2003 and 2005 legislative sessions updated the law. 
 
If a North Dakota taxpayer makes a qualified investment in a qualified venture, the taxpayer is entitled to a credit against state income tax liability under section 57-38.5-03.   The credit to which a taxpayer is entitled is subject to the following:
 

1. 45% tax credit of the amount invested (increased from 30% in 2003)

2. Annual investment eligible for a tax credit shall not be more than $250,000 (increased from $50,000 in 2003)

3. One-third of the credit may be taken in a single taxable year (was 50%)

4. The unused credit may be carried forward up to 4 years (total 5 years)

5. Maximum aggregate amount of qualified investment in any one qualified venture is limited to $500,000

6. Investment must be at risk in the venture, and must remain in the venture for at least 3 years. (Investments in escrow do not qualify for credit)

7. Investment in a qualified business must be expended for plant, equipment, R&D, marketing & sales activity or working capital.

8. Taxpayer who owns a controlling interest in the qualified business, or who is full time with the company, is not entitled to a seed capital tax credit. And members of the immediate family of disqualified taxpayers are also disqualified. (Spouse, parent, sibling, child or spouse of child).

9. Venture needs to be qualified by the director of the North Dakota Department of Commerce, Division of Economic Development & Finance in Bismarck as a primary sector business.

10. Maximum statewide credit is $2.5 million per year (was $2.5 M per biennium until 2005)