Legislative Update – Nov. 26


Hello Sublette County, this is Albert

Sommers reporting to you on the interim

work of the Legislature. As the Legislature

nears its next session in January, committees

are finishing assigned study topics and

are examining bills to address those topics.

I serve on the Appropriations Committee,

which will meet the entire week of Dec.

10. This week the Joint Education and Revenue

Committees meet.

The Revenue Committee will meet for

three days, Nov. 28-30, and they will review

several taxation bill drafts. There are

four or five bill drafts that I would like Sublette

residents to contemplate. One of the

taxation ideas that I hear discussed most

among legislators is the concept of lowering

and broadening our sales tax. I have

been told that in the past, Wyoming commercial

transactions were comprised of

60-percent goods and 40-percent services.

That has shifted to 40-percent goods and

60-percent services.

However, Wyoming is one of the few

states that does not tax services such as

CPA fees, the mechanic’s labor charge or

someone who landscapes your yard. So,

as Wyoming’s economy has shifted, the

tax structure has not kept pace. The bill

being considered by the Revenue Committee

would lower the sales tax to 3.5 percent

from the current 4 percent, but would expand

the tax to many, but not all, services.

Services provided by health care, lawyers,

veterinarians and banking would not be

taxed.

This bill would also eliminate the top

three sales tax exemptions, which are the

tax on food, manufacturing and data centers.

Currently, there is no sales tax collected

on these three items. I remember

when food was taxed, but that was quite a

few years ago. This bill is not revenue neutral;

it would generate additional revenue to

the state.

Two bills would put more money to local

government. Remember, Wyoming commits

$105 million of General Fund dollars to local

governments, as the current taxing authority

has been inadequate to meet their needs.

These two bills were designed to wean local

governments off the General Fund by providing

them more taxing authority. One of

the two bills would raise the sales tax rate

1/2 of 1 percent, and distribute some of the

money on a needs-based approach. The other

bill would be a local option tax, allowing citizens

of municipalities the ability to decide

if they wanted to impose up to a 1-percent

sales tax increase to support towns’ general

fund and projects in the municipality.

Another bill the Revenue Committee will

hear was brought forward late last session,

but was not acted upon. This bill has been

discussed at length on the sidelines in the

Legislature, and would impose a 5-percent

lodging tax. Three percent of the tax would

be statewide, and would fund the Wyoming

Tourism Board, freeing up General Fund

dollars that currently fund the program. Two

percent of the tax would go to local governments

for tourism promotion. Currently, by

a vote of the people, local government can

impose up to a 4-percent lodging tax for

tourism promotion. This bill would mandate

2 percent and allow up to 2 percent more as

a local option tax.

Another bill before the Revenue Committee

would put mineral ad valorem taxes

(property tax) on a monthly payment schedule.

Currently, it takes about 18 months to

collect mineral ad valorem tax from the time

of production, and the accounting and adjustment

process can be a nightmare. I doubt if

this bill will pass, but I believe mineral ad

valorem taxes should at least be on the same

payment schedule as severance taxes. There

has also been discussion of a corporate gross

receipts tax on companies with more than

100 shareholders. Wyoming would allow

deductions for other taxes paid in the state.

The idea is to more effectively tax the big

box stores, like Wal-Mart and Kmart, which

pay few taxes to the state of Wyoming, although

their profits from sales in Wyoming

are taxed in their home state.

So, keep your eyes peeled for more news

as this committee works the tax bills. I can be

reached for comment at [email protected]

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