PROPERTY TAXES

Statutory Background and Basis of Property Valuation

Article 15, Section 1 of the State of Wyoming Constitution, states that “All lands and improvements thereon shall be listed for assessment, valued for taxation and assessed separately.”

Article 15, Section 11(a), adopted November, 1988, requires uniformity of assessment. All property, except that which the constitution otherwise provides, shall be uniformly valued at its full value as defined by the legislature. Clause (b) exempts agriculture and grazing lands from the full value requirement and directs that the lands be valued according to the capability of the land to produce agricultural products under normal conditions. The Wyoming legislature felt it important to maintain the lands for ranching and agriculture and believed valuing them at full value could lead to the breakup of agricultural lands into other uses.

The Wyoming State Legislature established in § 39-13-103(b)(B)(ii) that all taxable property shall be annually valued at its fair market value. § 39-13-103(b)(B)(x) states the taxable value of agricultural land is to be based on the current use of the land, and the capacity of the land to produce agricultural products, including grazing and forage, based on average yields of lands of the same classification under normal conditions.

To be considered agricultural land, the land must be used primarily for the purpose of obtaining a monetary profit from agriculture pursuits, and unless legally zoned otherwise. It must be used for agriculture for two years.

The Article 15, Section 11(a)(i-iii) of the constitution prescribes three classes of property: (i) gross production of minerals and mine products in lieu of taxes on the land where produced; (ii) property used for industrial purposes as defined by the legislature; and (iii) all other property, real and personal. The legislature is not allowed to create new classes or sub classes.

The Wyoming Constitution states in Article 15, Section 3 that mines and mining claims, …shall be taxed in addition to the surface improvements, and in lieu of taxes on the lands, on the gross product thereof, as may be prescribed by law; provided, that the product of all mines shall be taxed in proportion to the value thereof.

The state legislature enacted in Wyoming § 39‑11‑101(xiv) that those properties used or held for industrial use are:

(A)Manufacturing, milling, converting, producing, processing or fabricating materials;

(B)The extraction or processing of minerals;

(C)The mechanical, chemical or electronic transformation of property into new products.

Property belonging to non-industrial businesses is classified as commercial property, and along with property owned by agriculture interests and residential real property is considered all other property, real and personal. Wyoming § 39-11-105(a)(xi) excludes all residential personal property from property taxation except mobile homes.[1]

All tangible personal property used in a business is taxable including but not limited to: all furniture, fixtures, machines, computers, software, equipment, telephone systems, tools manuals or libraries, unlicensed vehicles, mobile machinery, along with any small items used in a business. It depends on its use, industrial or commercial, as to how it is assessed. Leasehold improvements must be reported and listed separately. Leased equipment must be listed in detail along with the name and address of the leasing company.

The legislature is to prescribe the percentage of value to be assessed against each class of property. There cannot be more than one rate for each class of property and the taxation is to be equal and uniform within each class of property. Wyoming State Constitution Article 15, Section 11 (b).

Wyoming § 39-13-103(b)(A)(i) states that except as otherwise provided that all taxable property shall be annually listed, valued and assessed for taxation in the county in which located and in the name of the owner of the property on January 1;”

Assessment Ratios of Property

Wyoming § 39-11-101 (xvii) establishes the assessment ratio to determine the taxable or assessment value for the 3 classes of property:

Beginning January 1, 1989 "Taxable value" means a percent of the fair market and production value of property in a particular class as follows:

(A)Gross product of minerals and mine products, one hundred percent (100%);

(B)Property used for industrial purposes, eleven and one‑half percent (11.5 percent);

The property of commercial businesses is valued at 9.5 percent of fair market value for tax purposes. Residential real property, mobile homes, improvements on agricultural land, and agricultural equipment fall in the latter category. Agricultural land is valued at 9.5 percent of productive value..

These ratios were established by the legislatures according to Cynthia Lummis[2], State Treasure and past state representative, for various reasons. Minerals were to be assessed at 100 percent because they are only taxed once whereas other real and personal property is taxed year after year. Industrial property is taxed only two basis point higher than other property to comply with the Federal 4R Act. This act limits the disparity between the taxing of railroads and other property by state governments. Article 15, Section II of the Wyoming constitution meets this requirement by providing that the percentage of value prescribed for industrial property shall not be more than 40 percent higher nor more than (4) percentage points prescribed for property other than minerals. Commercial property is not assessed at the same percentage as industrial property because of the impact on small business. The legislature also felt the percentage for residential properties should be less than industrial in order to mitigate the possibility of a regressive tax.

Property Tax Exemptions and Relief Measures

Exemptions

Wyoming’s property tax exemptions are listed below.

Article 15, Section 12 of the Wyoming State Constitution exempts the property of the United States, state, counties, cities, towns, school districts and municipal corporations used primarily for governmental purposes. Public libraries, lots and buildings used for religious worship, church parsonages, church schools and public cemeteries are also exempt from taxation. The constitution gives the power to the legislature to exempt other property by statute.

Wyoming § 39-11-105 more specifically exempts the above property and those properties exempted by the legislature. These exemptions include: property of non-profit water utilities, fire departments, museums, hospital, water and sewer, water conservancy and irrigation districts.

Property of charitable entities is excluded as long as it is used for non-profit purposes. Property of charitable entities more specifically defined includes that of schools, orphanages, hospitals, secret, benevolent and fraternal organizations, senior citizen centers, and facilities of corporations providing services for the disabled, mentally ill, substance abusers or victims of family violence.

Property owned by non-profit entities used for community fine art’s presentations is exempted. Improvements to residential property are not taxed if they are meant to provide access for handicapped persons. Specific exemptions are given by statute to property owned by the Wyoming Community Development Authority and the Black Hills Joint Power Commission.

Personal property that is excluded includes property held for personal or family use, inventories, in transit property, intangible personal property, livestock, property designed and used underground for mining purposes, pollution control equipment, and fire suppression equipment.

Certain property is excluded because taxes or fees from another source are paid on it. This property includes snowmobiles, mobile machinery if registered and real property owned by the Wyoming Game and Fish Commission.

Relief Measures

1. Veteran’s Exemption - Wyoming § 39‑13-105 allows the exemption for veterans of World War I&II, Korean War, and the Vietnam War. In addition, the exemption is allowed for veterans participating in several foreign military operations including the recent Persian Gulf-Desert Storm operation. The total tax exemption is $800.00. It can be used against county property taxes at a rate of two-thousand assessed dollars per year (depending on mill levies, this equates to approximately $150 per year) or against the county fees for vehicle registration ( up to $60 per year). In all cases the property or vehicles must be deeded or titled in the veteran’s or his spouse’s name. Once the $800 is used, the exemption continues only if the veteran has a service related disability. If the veteran is deceased, the exemption continues for the spouse if they do not remarry and continue to reside in Wyoming. The state appropriates money each biennium to reimburse county governments for veterans’ exemptions.

2. Homestead Exemption – Wyoming § 39-13-109(d)(i) allows for the property of owner occupied dwellings with an assessment value of between $1.00 and $5,850.00 to apply for this exemption which is a credit against the homeowner’s taxes. The county where the exemption is claimed is then reimbursed by the state for the total amount of the exemptions claimed. In order for the exemption to be allowed, the state legislature must appropriate the reimbursements to the counties. The exemption has not been funded since 1990.

3. Property Tax Relief - Wyoming § 39-13-109(iii) allows a taxpayer to apply to the county treasurer for a property tax refund from property taxes paid on time for the preceding calendar year upon his principal residence including the land upon which the residence is located not to exceed two (2) acres. The tax relief is granted to those individuals who meet the poverty guidelines outlined in the statute. The maximum reimbursement allowed is $500.00. This provision sunsets January 1, 2003 unless extended by the legislature.

4. Property Tax Deferral – Wyoming § 39‑13-107 (b)(iii) allows a qualified taxpayer to apply to the board of county commissioners for deferral of the collection of not to exceed one‑half (1/2) of any real estate ad valorem taxes owed by the property owner on his principal residence. The deferral becomes a tax lien against the property with interest accruing on any tax collection deferral at a compounded rate of 4 percent per year. The taxpayer must qualify annually for a continual deferral. Once the taxpayer’s financial condition improves arrangements are made to repay the taxes deferred. If the property is sold, the taxes deferred are deducted from the sale proceeds. This program is a county option. Teton, Sublette, and Sheridan counties currently have the program approved and in place. Teton County is the only county with participants.

Mill Levies

Assessed or taxable value is determined by multiplying the fair market production value of property times the assessment ratio for the property class. A mill is .001 of $1.00 (or 1.00 per $1000 of assessed value). A mill is multiplied by the taxable or assessed value of property to determine the taxes due.

Fair Market or Production Value X Assessment ratio = Taxable Value X .001 = Tax rate/ mill assessed.

$80,000. X 9.5% = $7,600 X. 001 = $7.60

The Wyoming Constitution states the maximum number of mills the governmental entities in the state can assess. The actual number of mills used is at the discretion of the governing body of the governmental entity and depends on the anticipated expenditures that must be funded by the entity for the next fiscal year.

State government can assess up to four mills on the state’s total assessed valuation but these mills have not been levied since 1969, the year the legislature passed the minerals severance tax. There is currently no statutory mechanism to enact the tax. County governments can assess up to twelve mills on the taxable value of the county. Cities and towns are limited to eight mills assessed on the taxable value of the property located in municipal limits.

Both state and local governments collect property taxes for support of schools. The State constitution provides that the state should collect up to twelve mills for schools on the assessed value of all property in the state, the county up to six mills on property in the county. The Constitution in Article 7, Section 9 allows the legislature to make further provision for schools through taxation. § 21‑13‑102 provides that a unified school district can levy up to twenty-five mills and a K-8 district up to twenty mills on the valuation of property within the district. An additional six mills were allowed at the option of the school districts by this statute until the adoption of the new school funding measure was passed by the 1998 Legislature.

In addition, mill levies are assessed by special districts in Wyoming. The mill levies that are allowed for special districts are stated in Wyoming § 39-13-104 (e). Special districts are allowed by state statute to provide special services. School districts are a form of special districts. Wyoming has statutes that allow for the creation of twenty special districts. The creation of a district is usually by vote of the residents residing in the proposed boundaries of the district. Districts are governed by an elected or an appointed board. The maximum number of mills a district can levy is stated in statute. Table 3A describes the districts allowed by statute, their statute citation and the maximum number of mills allowed.

TABLE 3A

District	Statute	Mill Levy Limitation
Cemetery	35-8	3 Mills
Community College	21-18	10 Mills
Conservation District	11-16	1 Mill
County or Municipal Health District	35-1	1 Mill
Downtown Development Authority	15-9	30 Mills
Drainage District	41-9	At discretion of county commissioners
Fire Protection District	35-9	3 Mills
Flood Control District	41-3	12 Mills on real property, only
Hospital District	35-2	6 Mills
Improvement and Service Districts	18-12	At the discretion of property owners residing in the district for bonds and interest.
Irrigation District	41-7	At discretion of county commissioners
Local Improvement District ( public utilities)	37-13	Mills assessed to meet bonding needs.
Museum	18-10	1 Mill
Rural Health Care District	35-2	2 Mills
Sanitary and Improvement District	35-3	1 Mill
Senior Citizen District	18-15	1 Mill
Solid Waste District	18-11	3 Mills
Water and Sewer District	41-10	8 Mills
Water Conservancy District	41-3	1 Mill
Weed and Pest Districts	11-5	2 Mills

Levies are made to pay principal and interest for bonded indebtedness approved by the voters of a jurisdiction for capital improvements. A school district’s debt limit is 10 percent of the assessed valuation if it is a unified district or 6 percent if it is K-8 district. Cities and towns are limited to 4 percent and counties to 2 percent of the assessed value. Certain special districts can assume bonded debt and the limit is between 1 percent and 10 percent of the assessed value depending on the district.

The average number of mills levied in Wyoming in 1998 was 73.3. Taxes on the $80,000. home shown on page 5 would be $557.00 (7.60 X 73.3). The average mills assessed by each type of jurisdiction between 1983-1998 are shown in Table 3B.

TABLE 3B[3]

Mill Levy	1983	1987	1991	1994	1995	1996	1997	1998	Change from 83-98
All Purpose/Statewide	88.542	77.427	76.780	78.016	77.158	77.860	78.551	73.303	7.0%
State	0	0	0	0	0	0	0	0
State School Foundation	12	12	12.00	12	12	12	12	12	0%
County Tax	12.697	11.578	11.721	11.628	11.578	11.567	11.531	11.526	-9.2%
Municipal Tax	8.854	8.061	7.510	7.266	7.279	7.311	7.292	7.303	-17.5%
School Tax	35.867	38.660	39.336	40.304	39.639	40.514	41.893	37.858	5.6%
Special District	10.873	11.211	3.934	4.330	4.542	4.692	4.56	4.616	-57.6%

Administration

Unless provided by law for specific property, the statutes provide that the Wyoming Department of Revenue shall prescribe by rule and regulation the appraisal methods and systems for determining fair market value using generally accepted appraisal techniques. Wyoming Department of Revenue Rules and Regulations establishes the sources by which property tax appraisers can value property.

Wyoming § 39-13-102 (m)(i) through (viii) gives the power of valuation of certain industrial property (state assessed property) to the Wyoming Department of Revenue.

The Department of Revenue shall annually value and assess the following property at its fair market value for taxation:

The gross product of all mines and mining claims; property of pipeline companies; property of electric utilities; property of railroad companies; property of rail car companies; property of telephone and telegraph companies which have more than two thousand dollars ($2,000.00) in assessed value; property of other public utilities; leased property consisting of warehouses, storage facilities and office structures and any other property that is in support of or which is used or held for use for the activities listed in this subsection. If leased property is assessed to the lessee it shall not be assessed to the property owner.

All other industrial property, including above ground improvements and equipment belonging to the mining and oil and gas industries, is valued by local county assessors. The county assessors also value residential, commercial and agricultural property.

State Assessed

Chapter 7 of the Wyoming Department of Revenue’s Rules and Regulations describes the valuation methodology used to determine the taxable value of state assessed public utility and railroad property. The operating section of the Ad Valorem Tax Division of the Department of Revenue is the State Assessment Section delegated the authority to appraise and value all state assessed property. All real and tangible property existing on January 1 of each year shall be subject to assessment except that property exempt by statute.

The reporting of taxable property is the responsibility of the taxpayer. Wyoming § 39-13-107 (b)(ii) requires on or before the dates shown below that any person whose property is state assessed shall sign under oath and submit a statement to the department listing the information necessary to assess the property:

(ii) May 1, rail car companies (see section car companies);

(iii) April 1, pipeline companies, electric utilities, telephone and telegraph companies and other public utilities;

(iv) May 1, railroad companies.

Mineral production reports for gross products (ad valorem) tax valuations are due to the Minerals Tax Division of the Department of Revenue by February 25 per § 39-14.

If a report is not filed or if it is incomplete, the State Assessment section will appraise the company by a best information available method as described in the Department of Revenues Rules and Regulations and subject those companies to the penalties specified in § 39-13-108(c)(ii).

The State Assessment section appraisers utilize three distinct appraisal techniques to estimate fair market value: 1) sales comparison approaches; 2) cost approaches to Value; and 3) income capitalization to value approaches. Section 6 of Chapter 7 of the Department of Revenue’s Rules and Regulations describe these appraisal techniques. One or more of these approaches shall be used to determine fair market value. The property shall fit the assumptions inherent in the appraisal approach, and the appraisal approach should consider the nature of the property or industry, and the regulatory and economic environment within which the property operates.

Once the values are determined by the above approaches, the appraiser shall reconcile the approaches by considering the relative significance, applicability and appropriateness of the indications of value. The appraiser will place the most consideration and reliance on the value indicator which, in his professional judgment, best approximates the value of the subject property.

All interstate public utilities or railroads use a unitary value system.[4] An allocation process is used to reasonably allocate property values in Wyoming. Apportionment is used to distribute the values of state assessed properties among counties or taxing districts. This is especially important for non-situs property, property not defined by legal description, (i.e. miles of pipeline, wire miles, cable miles, transmission lines, and others) and specific investment accounting assets segregated by the above items.

Accurate reporting of company operations for tax assessment is the responsibility of the business entity. Once every four years, the Department of Revenue’s Rules and Regulations requires the Ad Valorem Division, State Assessment Section to physically inspect state assessed properties or a representative sample of such properties. Entities who fail to file the necessary reports for assessment purposes can be charged penalties according to Wyoming § 39-13-108(c)(i)(A-C).

The taxpayer whose property is appraised is notified of a preliminary estimate of fair market value of their property. If the taxpayer has objections to the assessment, within ten days of receipt of his preliminary estimate of value, he may request an informal conference with the Department of Revenue, Ad Valorem Division, to provide information as to any error of fact for the company.

A formal notification of assessed value is required by Wyoming § 39-13-102 (n). If the taxpayer feels the values established in this notice are incorrect, an appeal can be filed within 30 days of the postmark of the notification with the State Board of Equalization.

Wyoming § 39-13-102 (o) establishes dates by which the State Assessment Section and the Minerals Tax Division must certify to county assessors the valuations determined by the department for state assessed real and personal property:

(i) June 1 and no later than July 1, mines and mining claims, pipeline companies, electric utilities and other public utilities;

(ii) First Monday in June, telephone and telegraph companies;

(iii) First Monday in July, railroad companies.

County Treasurers are responsible for collecting the property taxes generated by the assessment value of state assessed real and personal property except for rail cars

Car Companies

Wyoming § 39‑13‑103(b)(xvi) legislates the method by which rail cars are to be valued and taxed. Chapter 8 of the Department of Revenues Rules and Regulations describes the annual reporting requirements of rail car companies, the valuation methods and tax billing and collection procedures. The State Assessment Section of the Ad Valorem Division of the Department of Revenue is the operating section for the valuation of rail cars. There are three major differences between the property tax procedures for rail cars and those of other state assessed industrial properties:

1) Valuation is to be fair market value for each particular class of car. Fair market value is determined by using the market information available, class specific costs, sales and income information submitted by taxpayers, data from surrounding state governments, and recognized value publications.

Each car owned is not valued separately. The number of cars for which each company is assessed is determined by the average number of cars necessary to make the Wyoming miles. Chapter 8, Section 6(iii) of the Department Rules and Regulations details the information and formula used to determine the number of cars assessed.

2) Rail cars are industrial property. The level of assessment is determined by multiplying 11.5 percent times the fair market value. The amount of tax due is determined by multiplying the assessed value times the statewide average mill levy as specified in Wyoming § 39-13-104 (g).

The department shall each year make a levy equal to the statewide average county, school district and state levy for the year immediately preceding against the values assessed for each of the counties through which the rail cars may have been operated.

3) The Department of Revenue collects the tax due from each taxpayer rather than the county treasurers and then through the state treasurer distributes the taxes collected to the respective county treasurers. Wyoming § 39-13-104 (g) continues:

When the tax due is determined, the department shall send to each owner a statement of the amount of the assessment, the rate of levy and the amount of tax due, which shall be paid to the Department of Revenue. When all these taxes have been collected the state treasurer shall pay to the respective county treasurers the amount due their counties.

The amount paid each county is determined by the track mileage in the county. The county treasurer distributes the car company taxes received per Wyoming § 39-13-111(a)(iii).

The county treasurer shall credit all these taxes to an account within the trust and agency fund and after the regular state, county and school district levies are made, distribute them in the same manner property taxes are distributed.

Motor Vehicle Property Taxes

Wyoming residents and businesses pay a county property tax on motor vehicles and trailers owned and operated for road use. The tax rate is 3 percent of the factory cost of the vehicle or trailer adjusted for its age. The tax is the county registration fee and is in addition to the sales tax paid on the vehicle at the time of purchase.

Wyoming residents pay the tax in the county treasurer’s office when the vehicle is registered and it is renewed annually. The county treasurer also collects the state registration fee which is a flat fee varying according to the type of vehicle being registered.

The county treasurer credits the county registration fees to an account within the trust and agency fund and after the regular state, county, and school district levies are set, distributes them in the same manner as property taxes.

Locally Assessed Properties

Wyoming § 18-3 outlines the duties of county assessors. Assessors determine the fair market value for local assessed properties annually and commercial personal property, maintain a current record of property characteristics and veterans’ exemption records, research public records to determine ownership, review mobile homes annually and perform or contract out locally assessed industrial appraisals. The county assessor maps all tax district boundaries and agricultural land based on use and soil. The assessor has the authority to grant or deny exemption status to locally assessed property. They administer state assessments and defend values and testify in appeals.

The Wyoming Department of Revenue, Ad Valorem Division provides support functions to local assessors:

The Department prescribes appraisal methods and systems for determining fair market value. The Department maintains a computer assisted mass appraisal (CAMA) system housed on the State of Wyoming main frame for this purpose. The Department is responsible for programming and the assessors maintain and input data. Assessors have the option of determining fair market value by using the BOECKH program based on cost (WYS system) or the CLT based cost system (MAS system). Eleven counties use WYS and 12 counties MAS. Both systems are capable of using multiple regression analysis (MRA), sales ratio analysis and vertical and horizontal assessment adjustment system (VHAAS) to arrive at market value.

The department downloads values to the assessor’s computer system in order to generate assessment schedules, compile the abstract and provide the tax roll to the treasurer’s office.

The department publishes rules covering all aspects of the valuation and assessment systems and provides for uniform interpretation of the statutes among counties. The department produces the “Wyoming Personal Property Valuation Manual”, the “Wyoming Appraisal Manual”, “Mapping and Agricultural Manual” and the “Tax District Designation Manual”.

The department monitors work in progress for each county assessor’s office to determine that procedures and formulas promulgated are being strictly applied.

During their 1988 session, the legislature adopted education requirements for local county assessors and each person in the assessor’s office. The assessors and their employees are required to be certified as property tax appraisers and receive annual training to maintain certification. The Department of Revenue funds the cost of the courses for certification. County governments are required to provide travel expenses.

The State Board of Equalization establishes the standards and procedures that the county assessors use in equalizing values across counties within the state. They also act as the hearing board for appeals from County Boards of Equalization and the Department of Revenue. They promulgate the rules to establish procedures for processing information disclosed in the statement of consideration. This document must be completed at the time of transfer of all real estate to disclose the sale price and sale provisions to the county assessors office and is used in the process of determining fair market values.

As is the case with state assessed industrial property, the responsibility of reporting commercial, agricultural and locally assessed industrial taxable property is that of the taxpayer. County assessors are required to review all properties every 4 years.

The taxpayer must submit a statement to the county assessor of taxable personal property by March 1 of each year. The Department of Revenue, Ad Valorem Division, does have forms that county assessors can use for taxpayers to meet the reporting requirements. There are individual forms for oil field equipment and drilling/well service work over/seismic rigs. All other commercial, agricultural and locally assessed industrial personal properties are reported on the “Statement of Personal Property, Tax Year 19--, Merchants, Manufacturing, Construction, Equipment, Professional”. County assessors can develop and use their own forms.

Once initial personal property information is received from the taxpayer, the county assessor can enter it into the Computer Assisted Mass Appraisal (CAMA) sub system developed by the Department of Revenue. The information contained in this file is used to generate letters and forms sent to businesses each year requesting updated reports/renditions of personal property. The forms, sent in January or before, include an itemized listing of the personal property previously reported. The taxpayer is asked to correct, delete, or add new items and return it to the assessor by the due date.

The county assessor can use their own developed appraisal systems with the Department of Revenue’s prior approval or under written agreement with the Ad Valorem Division, the CAMA system. The system values all real and personal property except property for which narrative appraisal or other recognized approaches to value are used as a substitute to the CAMA system.

Fair market value is determined by utilizing three approaches to value: 1) sales comparison approaches; 2) cost approaches to Value; and 3) income capitalization to value approaches. Section 6 of Chapter 9 of the Department of Revenue’s Rules and Regulations describe these appraisal techniques. One or more of these approaches shall be used to determine fair market value. The property shall fit the assumptions inherent in the appraisal approach, and the appraisal approach should consider the nature of the property or industry and the regulatory and economic environment within which the property operates.

In addition, the valuation methodology for personal property must reflect the trade level at which personal property is found and shall account for factors influencing the value in place including utility, usefulness to the owner or the actual income produced. The “Wyoming Personal Property Valuation Manual” aids county assessors in the valuation process and does include a mobile/manufactured home index for determining the fair market value of mobile homes.

The taxable value of agricultural land is based upon the current use of the land and the capacity of the land to produce agricultural products, including grazing and forage, based on average yields of land of the same classification under normal conditions. It is the Ad Valorem Divisions responsibility to determine the taxable value of agricultural land. Valuation figures for agricultural land for assessment purposes shall be based upon the Department of Revenue’s “Mapping and Agricultural Manual” which is published annually by the Department.

It is the County Assessor’s responsibility to determine the type or class of agricultural land to be valued. To this end, the assessor has the statutory discretion to determine the productivity value within the appropriate high or low ranges based on, but not limited to: local review of agricultural land property, productivity conditions; mapped soil classifications; land resource areas; tabulated acreage; and actual conditions.

Once the fair market value of residential, industrial, personal and commercial property and the productive value for agricultural lands is determined, the appropriate percentage is applied to generate taxable value: 11.5 percent for industrial and industrial personal property and 9.5 percent for all other personal property. Wyoming § 39-13-103(a)(vii)-(viii)establishes the procedure by which the taxpayer is notified of the taxable value of his property.

The county assessor on or before the fourth Monday in April, or as soon thereafter as practical, shall mail assessment schedules to all taxpayers except those with state assessed valued property. The assessment schedules shall contain the property’s estimated fair market value for the current and previous year. It shall also contain the assessment ratio; the amount of taxes assessed from the previous year and an estimate of the taxes due based on the previous year’s mill levies. The statement must inform the taxpayer how he can contest his property assessment.

Tax Payment

Ad valorem taxes, for local and state assessed property except car companies, are billed from and paid to each Wyoming’s county treasurer’s office. Each treasurer is required by Wyoming § 39-13-107 (b)(i)(C), after receiving the tax list from the county assessor, to send a statement to each tax payer on or before October 10. Taxes can be paid in two installments or in one payment. If the installment option is chosen the first installment is due between September 1 and November 10, the second installment is due between March 1 and May 10. If the entire tax is paid on or before December 31, there will be no interest or penalty charged.

Enforcement

If taxes are not paid by May 11, the county treasurers can initiate enforcement measures.

County treasurer declares taxes not paid as delinquent as of the day they were payable and assesses interest of 18 percent per annum until paid or collected.

Taxes upon real property are a perpetual lien upon the property against all persons excluding the United States government and the State of Wyoming. Taxes upon personal property are lien upon the personal property owned by the person against whom the taxes were assessed. If the property is transferred before the taxes are paid, the taxes can be collected from other real or personal property of the transferor or from the proceeds of the sale of the property.

Real and personal property can be sold by the county for failure to pay taxes, interest and penalties. The party that purchases the property is given a certificate of purchase which entitles them to control of the property until they can apply for a tax deed, which gives them ownership of the property. During the time they have control of the property, they must continue to pay the taxes on the property. The procedures for tax sales are set forth in Wyoming § 39-13-108.

Taxpayer Remedies

To contest a property assessment, the taxpayer must file not later than thirty (30) days after the postmark date of the assessment schedule, a statement with the county assessor. The county assessor and the taxpayer will attempt to settle their disagreements over the taxable value. If they are not successful, the issue is brought before the County’s Board of Equalization for settlement. The county commissioners sit as the County Board of Equalization. Rulings of the County Board of Equalization can be appealed to the State Board of Equalization and from there to the Wyoming court system.

Taxpayers who have over paid their taxes or who have paid their taxes and who upon appeal have had their taxes reduced can be granted refunds by order of the county commissioners. A refund can also be in the form of a credit against future tax payments for a period not to exceed five years.

Taxpayers who have had real property sold at a tax sale do have six years in which to redeem their property. This provision also applies to lien holders of the property. The parties redeeming the property must not only pay all past due property taxes, but the interest and penalties that have accrued. In addition, the certificate of purchase holder on the property must also be reimbursed for their expenses.

Taxpayers who have paid taxes under protest subject to an appeal before the State Board of Equalization or competent jurisdiction, must have the taxes under appeal placed in an interest bearing escrow account by the county treasurer. To the extent that the taxpayer prevails, the county treasurer is to refund the taxes plus interest within thirty days of the decision.

All personal property taxes not collected within ten years from the time they were levied shall be cancelled and consider uncollectable. Property that has been omitted from the tax roll and later discovered by the county assessor can only be assessed back taxes for a period of five years.

Collections and Distribution

Tax Collections

Property tax plays an important role in financing local governments in Wyoming. More so in Wyoming than in surrounding states. The map below shows the property tax revenue in surrounding states and Wyoming as a percent of the total of three tax revenues, sales tax, property tax, and income tax.

27.7%

30.3%

36.0%

45.9%

40.5%

34.8%

64.3%/

54.8%

57.2%/

44.3%

Wyoming does not have an income tax and Montana does not have a personal sales tax.

The first number showing on the map of Wyoming is the percentage of property tax collected from the total of property and sales taxes. The second number includes the mineral severance tax as the third tax. Wyoming is more in line with surrounding states when this tax is included. The first figure on the Montana map is the percentage of property tax collected from the total of property and income tax collected. The second figure includes the business sales taxes including severance taxes as the third tax. Even with these taxes, Montana’s property tax percentage of tax revenues is high.

The assessed value of minerals is the predominant source of property taxes in Wyoming.

The Table 3C below shows the history of the assessed value of minerals in relation to the state’s total assessed values. It also depicts total taxes collected and the portion attributed to minerals. The assessed valuation shown was determined the year prior to when the tax

TABLE 3C

Year Assessed	Total Assessed Value	Assessed Value from Minerals	Mineral Values as a % of total values	Year taxes paid	Total Property Taxes	Taxes Collected from minerals and mineral related	Taxes from minerals as % of total taxes
1969	1,317,876,063.00			1970	78,273,440.00	25,667,876.00	32.79%
1974	2,168,456,373.00			1975	131,082,890.00	56,781,222.00	43.32%
1979	4,515,133,799.00			1980	298,415,206.00	162,726,224.00	54.53%
1984	8,389,156,815.00	5,987,627,146.00	71.40%	1985	565,740,057.00	393,652,409.00	69.58%
1989	6,074,431,051.00	3,772,814,316.00	62.10%	1990	412,013,986.00	247,692,543.00	60.01%
1993	6,291,213,307.00	3,523,774,856.00	56.01%	1994	436,644,341.00	237,229,568.00	54.33%
1994	6,231,754,659.00	3,316,362,145.00	53.22%	1995	430,007,453.00	221,575,958.00	51.53%
1995	6,423,400,855.00	3,298,317,781.00	51.35%	1996	450,010,743.00	223,879,371.00	49.75%
1996	7,145,869,312.00	3,876,129,226.00	54.24%	1997	509,052,515.00	267,438,424.00	52.54%
1997	7,441,470,939.00	4,017,611,483.00	53.99%	1998	500,551,425.00	263,271,161.00	52.60%

was actually collected. The peak year for minerals was 1985. Since that year there has been a sharp decrease in property taxes collected on minerals due to a decrease in oil exploration and production and lower market prices for oil and gas, coal and other minerals.

Chart 3A graphs the sources of Wyoming’s assessed value from 1985 to 1998 using percentages. In the mid-eighties, mineral production accounted for over 70 percent of the total assessed value. This percentage has continuously decreased since 1985. In 1996, mineral and non-mineral production was almost equal. This is further supported by the lines at the bottom of the chart which depict the assessed value of specific minerals and other types of property. Coal assessed values have remained relatively stable since 1987 with a slight downturn in 1997. The price per ton of coal continues to decrease, though production has increased.

On the other hand, residential values increased from 1994 to 1996 and leveled off in 1997. One reason for this is that the Department of Revenue and the State Board of Equalization has been working with county assessors to assure that taxation is equal and uniform within the residential type of property. This means that residential property throughout the state is valued by all county assessors at full market value. Agricultural values, industrial values and commercial values all took decreases from 1996-1997.

Chart

3B

It is interesting to note in Chart 3A that up until 1993, total assessed valuation and mineral valuations followed the path of oil production. After 1993, total assessed valuation increases every year but mineral valuation and oil valuation decrease with a slight increase in 1997.

Mineral production has amounted to over 50 percent of the states total assessed valuation. What is also notable is the assessed valuation of improvements and personal property owned by mineral related businesses. Table 3E shows the breakdown of locally assessed values between mineral related businesses and all other industrial property from 1994-1997.

TABLE 3D

	Total Assessed Value Locally Assessed Industrial Property	Assessed Value of Locally Assessed Mineral Related Property	Mineral Related Percentage of Total
1994	631,666,203.00	476,495,394.00	75.43%
1995	615,519,991.00	471,306,480.00	76.57%
1996	630,199,311.00	555,434,756.00	88.14%
1997	639,622,556.00	570,874,410.00	89.25%
1998	659,506,197.00	571,355,813.00	86.63%

Tax Distribution

Property Tax Distributions can first be considered by understanding what levels of government receive property taxes, and then by seeing within each level how the taxes are distributed among the individual entities.

Chart 3B depicts what levels of government were funded by property taxes in 1998.

The four mills authorized by the Wyoming constitution have not been authorized by the State Legislature since 1969. The State general fund does not receive any revenues from property taxes. School district’s are the chief benefactor of property taxes in Wyoming. They received 12 mills from a statewide levy, 6 mills from a county levy and 25 mills from a school district levy for a total of 43 mills. The percentage shown in Chart 3B reflects the taxes generated by the optional 6 mills school districts could assess at this time and the tax revenues from locally approved mills for bond and interest used to fund capital construction.

The percentage shown for counties reflects the 12 mills counties can levy as authorized by the Wyoming Constitution. The city/town percentage is the 8 mills allowed.

CHART 3B

PROPERTY TAXES
All Governments
1998

State Government	0.00
County Government	88,187,397.00
City/Town government	12,373,623.00
School Districts/Higher Education	377,916,476.00
Special Districts	26,194,556.44

There is a large difference between taxes distributed to counties and those distributed to cities even though there is only a 4 mill levy difference. The assessed valuation of cities does not include mineral valuations since the mining of minerals takes place outside city limits. School districts, counties, special districts and community colleges all do benefit from mineral production.

The legislature cannot increase the amount of mill levies allowed cities and towns since they are established by the constitution. To counteract this problem, the legislature has diverted sales tax and severance tax revenues as well as federal mineral royalties to cities and towns. This may also account for the growth in the adoption of the local option sales taxes.

In some instances proliferation of special districts with independent taxing authority is another way in which mill levy limits of cities, towns, and counties have been skirted. Special districts received 5 percent of property tax distributions, third highest of all levels of government. Add to this what is distributed to community college districts, the percentage increases to 12.2 percent, a little over one-percent point behind counties. Table 3F compares municipal valuations to county valuations and includes the number of special district in each county in 1998

TABLE 3E

County	Assessed Valuation	Number of Municipalities	Valuation of Municipalities	% of County	Number of Special Districts
Albany	149,948,849	2	95,331,533	63.58%	5
Big Horn	129,577,299	9	17,331,448	13.38%	26
Campbell	1,495,260,165	2	70,509,564	4.72%	9
Carbon	357,009,725	10	41,793,173	11.71%	14
Converse	286,990,621	4	23,658,637	8.24%	7
Crook	86,103,328	4	10,314,907	11.98%	2
Fremont	288,982,662	6	70,611,686	24.43%	27
Goshen	70,791,567	5	21,549,617	30.44%	23
Hot Springs	92,180,926	2	11,252,011	12.21%	7
Johnson	79,671,264	2	16,999,226	21.34%	7
Laramie	396,377,730	4	248,195,742	62.62%	17
Lincoln	445,074,789	8	24,243,547	5.45%	20
Natrona	416,733,395	6	173,052,445	41.53%	11
Niobrara	33,275,890	3	4,970,655	14.94%	4
Park	319,181,952	4	67,492,894	21.15%	20
Platte	125,945,935	5	48,503,672	38.51%	8
Sheridan	124,588,912	4	4,006,748	27.30%	9
Sublette	376,372,632	3	12,117,201	3.22%	9
Sweetwater	1,167,481,755	6	160,016,277	13.71%	16
Teton	379,656,703	1	89,777,763	23.65%	7
Uinta	462,868,967	3	44,956,067	9.71%	9
Washakie	96,244,905	2	24,403,843	25.36%	9
Weston	61,148,238	2	10,151,209	16.60%	6
Total	7,441,468,209	97	1,321,239,865	17.76%	272

Within each level of government, taxes are distributed based upon the assessed valuation of the geographical boundaries of the specific governmental entity. As discussed above, cities and towns do not generate assessed valuation from minerals. Their tax base is primarily limited to residential properties with some contribution from commercial properties. Counties, special districts, community colleges and school districts all do benefit from mineral production, but not equitably. Wyoming’s mineral production is not spread evenly throughout the state.

Table 3F on page 22 compares the 1998 property tax capacity across county lines. It displays what one mill generates in total taxes and in non-mineral taxes. It shows the percentage for assessed valuation from minerals and from non-minerals. It ranks counties in four categories.

Though, mineral production represents over half of Wyoming’s property tax base, reliance on mineral production varies widely from county to county – from over 80 percent of Campbell County’s assessed value to just one-tenth of one percent of Teton County’s tax base. Relative tax capacity also varies dramatically among Wyoming counties. In Campbell County, for example, one mill raises almost $1.5 million, while Niobrara County can generate only $33,275. This may be one reason a few counties and special districts have not had to use their total mill levy capacity as allowed by the Constitution. Table 3F shows the mill levies adopted by counties in 1998 total taxes, tax per mill levy and tax per capita. There is a tremendous variation between the dollar amount of taxes generated per mill and the taxes per capita for each county.

TABLE 3F

COUNTY	1998 Estimated Population	1998 County Mill Levies	1997 Total Assessed Value	1998 Total Taxes	Property Tax Revenue Per Capita	Tax Value Per Mill
Albany	31,130.00	12.000	149,948,849	1,799,386.19	58.04	149,948.85
Big Horn	11,490.00	12.000	129,577,299	1,554,927.59	141.36	129,577.30
Campbell	32,450.00	11.038	1,495,260,165	16,504,681.70	532.41	1,495,260.17
Carbon	15,830.00	12.000	357,009,725	4,284,116.70	267.76	357,009.73
Converse	12,150.00	12.000	286,990,621	3,443,887.45	286.99	286,990.62
Crook	5,810.00	12.000	86,103,328	1,033,239.94	172.21	86,103.33
Fremont	36,500.00	12.000	288,982,662	3,467,791.94	99.08	288,982.66
Goshen	12,790.00	12.000	70,791,567	849,498.80	65.35	70,791.57
Hot Springs	4,660.00	12.000	92,180,926	1,106,171.11	221.23	92,180.93
Johnson	6,800.00	12.000	79,671,264	956,055.17	136.58	79,671.26
Laramie	80,420.00	12.000	396,377,730	4,756,532.76	60.98	396,377.73
Lincoln	14,140.00	9.369	445,074,789	4,169,905.70	297.85	445,074.79
Natrona	64,520.00	12.000	416,733,395	5,000,800.74	78.14	416,733.40
Niobrara	2,660.00	12.000	33,275,890	399,310.68	133.10	33,275.89
Park	25,850.00	12.000	319,181,952	3,830,183.42	153.21	319,181.95
Platte	8,540.00	12.000	125,945,935	1,511,351.22	188.92	125,945.94
Sheridan	25,580.00	12.000	124,588,912	1,495,066.94	59.80	124,588.91
Sublette	5,710.00	10.266	376,372,632	3,863,841.44	772.77	376,372.63
Sweetwater	40,450.00	12.000	1,167,481,755	14,009,781.06	341.70	1,167,481.76
Teton	13,950.00	9.110	379,656,703	3,458,672.56	266.05	379,656.70
Uinta	20,490.00	12.000	462,868,967	5,554,427.60	277.72	462,868.97
Washakie	8,720.00	14.939*	96,244,905	1,437,802.64	159.76	96,244.91
Weston	6,570.00	12.000	61,148,238	733,778.86	104.83	61,148.24
	487,210.00		7,145,869,313.00	85,221,212.22	177.91	323,542.10
* Includes 12.000 county mills and 2.939 county bonds and interest.

MINERAL TAXES

Statutory Background and Basis of Property Valuation

Wyoming is one of few states that levies both a property tax and as a privilege to extract or severance tax on minerals. The property tax on minerals was considered generally in the previous section. The discussion that follows considers the severance tax on minerals and relates the similarities and non-similarities of the two mineral taxes.

A severance tax according to Wyoming § 39-11-101(a)(ix) defines severance tax as an excise tax imposed on the present and continuing privilege of removing, extracting, severing or producing any mineral in this State.

Chapter 14 of Title 39 dictates the procedures for the collection of mineral taxes in Wyoming. There are 7 articles in this chapter, each dealing with a specific mineral. The minerals are: 1) coal 2) oil and gas 3) trona 4) bentonite 5) uranium 6) sand and gravel and 7) other valuable deposits. Each article is further divided into eleven (11) sections that address specific procedures as they apply to each mineral. These sections are 101) Definitions, 102) Administration, confidentiality, 103) Imposition, 104) Tax Rate, 105) Exemptions, 106) Licenses, Permits, 107) Compliance; collection procedures, 108) Enforcement, 109) Taxpayer remedies, 110) Statute Limitation and 111) Distribution.

The determination for the imposition of taxes is the same for both ad valorem (gross product) and severance taxes. The primary difference between the valuation of minerals for ad valorem and severance taxes is the time of reporting and payment. Ad Valorem taxes are figured on the total production of the previous year. Severance taxes are figured and reported on the current month’s production.

The point of valuation for oil and gas is at the wellhead. Valuation is made prior to any processing or transportation expense. If the product is not sold prior to the point of valuation in a bona-fide arms length sale or if used without sale, valuation is determined by using one of the following methods: 1) comparable sales, 2) comparable value, 3) net back, 4) proportional profits or 5) method agreed upon between the operator/owner and the Wyoming Department of Revenue. Net back is an allowable method for production years prior to 1990 and is an allowable method for production years beginning in 1990 with the exception of gas processed from joint venture owned gas plants. The methods are described in the department’s Rules, Chapter 6 Section 10; and in Wyoming § 39-14-203.

Valuation of coal sold at the mouth of the mine without further movement or processing is the fair cash market value as established by a bona-fide arms length sale less exempt royalties. Exempt royalties are those royalties for interests owned by the United States, State of Wyoming or an Indian tribe.

For coal sold away from the mouth of the mine in a bona-fide arms length sale, ad valorem, all royalties, production taxes, severance taxes, black long excise taxes, and abandoned mine land fees are deducted from the F.O.B. mine sales price. The resulting price is then multiplied by the ratio of direct mining costs to the total direct costs. To the resulting amount non-exempt royalties, ad valorem, production taxes, severance taxes, black lung excise taxes, and abandoned mine land fees are added back to determine the fair market value of coal.

The sales value of coal, used without sale or not sold pursuant to an arms length agreement, is the same as coal that is comparable in quality, quantity, terms, and conditions which is sold both in the spot market and through long-term agreements negotiated within the previous twelve months. This value is multiplied by the respective number of tons used or sold for each reporting period.

The determination of the 100 percent fair cash market value of the gross product of other minerals is determined at the point at which the mining or production of the mineral is completed, usually the mouth of the mine. When a solid mineral is sold at the point of valuation pursuant to a bona-fide arms length sale, the sales price shall be the fair cash market value. When a solid mineral is sold at a point other than the point of valuation, the fair cash market value shall be determined in accordance with recognized appraisal techniques. These techniques include the cost approach and the comparison approach and are described in Section 10, Chapter 6 of the Department of Revenues Rules and Regulations. Specific rules for valuation are provided for trona, uranium and bentonite.

Rates

The ad valorem taxes paid on minerals are determined as was discussed in the property tax appendix of this report. The 100 percent fair market cash values as determined above are multiplied by the mill levies of the appropriate taxing jurisdiction.

Article 15, Section 19 of the Wyoming Constitution states that the legislature shall provide by law for an excise tax on the privilege of extracting minerals of 1.5 percent on the gross value of the mineral extracted. Minerals subject to the tax are coal, petroleum, natural gas, oil shale and others as prescribed by the legislature. Such tax is in addition to any other excise, severance or ad valorem tax on the minerals. Severance tax rates will vary depending on the mineral produced. The following table presents the tax rates for each class of mineral including the constitutionally required 1.5 percent rate:

TABLE 4A

Coal	Surface coal – (i) 1.5% (ii) .5% (iii) 2.0% (iv) 1.5% (v) 1.0% (vi) .5% - Total 7% Underground coal- (i) 1.5% (ii) 1.25% (iii) 1.0% - Total 3.75%
Oil and Gas	(i) 1.5% (ii) .5 % (iii) 2.0%(1.0% if oil is $20.00 or less per barrel between 1/1/99-12/31/00) (iv) 2.0% (1.0% if oil is $20.00or less per barrel between 1/1/99-12/31/00) Total 6% (4% if oil is $20.00 or less per barrel between 1/1/99-12/31/00)
Trona	(i) 2.0% (ii) 2.0% - Total 4%
Bentonite	(a) 2.0%
Uranium	(i) 2.0% (ii) 2.0%-Total 4%
Sand and Gravel	(a) 2.0%
Other Valuable Deposits	(a) 2.0%

Exemptions, Incentives and Relief Measures

Coal

(i) Ad valorem and severance taxes

a. Coal has no value if it is consumed prior to sale for the purpose of treating or processing coal produced from the same mine.

(ii) Severance taxes

a. If the severance tax on a ton of coal exceeds .60 per ton for surface-mined coal and .30 per ton for underground coal, the coal is exempt from the tax which exceeds the maximum amount per ton.

1. New contracts or modification of an existing contract if entered into between March 31, 1987 and December 31, 2003.

2. This exception is subject to meeting certain conditions.

a.) The coal is consumed outside of the state, or meets certain production requirements if consumed within the state, or if consumed within the state replaces a coal source from outside the state.

b.) The new contract is not the result of replacing the contract of another Wyoming producer.

Oil and Gas

(i) Severance Taxes

a. Stripper 15 production is exempt from (iii) providing for a 4 percent tax rate on production less than 15 barrels per day when the average prices is less than $20 per barrel.

b. Crude oil extracted from collection wells prior to January 1, 1999 is exempt from (ii),(iii) & (iv) for a net tax of 1.5 percent.

c. Tertiary production after July 1, 1985 and before March 31, 2003 is exempt for (iii) for the first five years of production for a net tax of 4 percent.

d. If carbon dioxide gas is used in the production of crude oil by tertiary techniques, the severance tax paid on the carbon dioxide gas is deducted from the tax due on the crude oil production.

e. Crude oil or gas produced by a wildcat well between January 1, 1991 and December 31, 1994 is exempt from (iii) and (iv) for four years from the first date of production for a net tax of 2 percent.

f. Crude oil or natural gas produced other than from collection wells between July 1, 1993 and March 31, 2001 is exempt from (iii) and (iv) for 2 years providing up to 60 barrels oil per day or 6 MCF of gas per day or until the price of oil equals or exceeds $22.00 per barrel or the price of gas exceeds $2.75 per MCF for the preceding six months. The net rate is 2 percent and this exemption cannot be used if c. or e. above is used.

g. Incremental crude oil or natural gas production resulting from a work-over or re-completion of an oil or gas well between Jan. 1, 1997 and March 31, 2001 is exempt from (iii) and (iv) for 2 years. The net rate is 2 percent and this exemption cannot be used if c. or e. above is used.

h. Crude oil produced from previously shut in wells is exempt from (ii), (iii) and (iv) for a period of 5 years or until the cost of a barrel of oil equals or exceeds $25.00 for the previous 6 months. The net tax is 1.5 percent.

i. Natural gas vented or flared or which is re-injected or consumed for the production of crude oil or natural gas on the same lease is not taxed.

j. Natural gas that is produced under a certified gas research project is entitled to a 50 percent tax credit under (i), (ii) and (iii). Credit is limited to 50 percent of qualified expenditures with such expenditures not exceeding $2MM per taxpayer. Credit would then be limited to $1MM.

Trona

(i) Ad valorem and severance taxes – no exemptions, incentives or relief measures.

Bentonite

(i) Ad valorem and severance taxes – no exemptions, incentives or relief measures.

Uranium

(i) Severance taxes

a. There is no severance tax on uranium production between January 1, 1995 and March 31, 2003 if the price of uranium is below $14.00 per pound

1. If the price is between $14.00 and $15.00 per pound the tax is 1 percent.

2. If the price is between $15.01 and $16.00 per pound the tax is 2 percent.

3. If the price is between $16.01 and $17.99 per pound the tax is 3 percent.

4. If the price is between over $18.00 per pound, the tax is 4 percent.

Sand and Gravel

(i) Gravel owned and used by governmental entities for governmental purposes is exempt.