Part III:

PROBLEMS WITH WYOMING'SCURRENT TAX SYSTEM

LACK OF EQUITY

Tax Revenue Comparison - 1995/1996
Wyoming Compared to Mineral Producting States																				New	North				West
														Wyoming	Alaska	Colorado	Kentucky	Louisiana	Montana	Mexico	Dakota	Oklahoma	Texas	Utah	Virginia
	Wyoming	Alaska	Colorado	Kentucky	Louisiana	Montana	New Mexico	North Dakota	Oklahoma	Texas	Utah	West Virginia	Asset Taxes	61.97%	75.43%	33.70%	23.27%	25.50%	55.46%	21.23%	37.38%	30.65%	42.79%	25.51%	29.53%
Asset Taxes													Income Taxes	0.00%	14.18%	27.33%	35.77%	18.07%	28.06%	21.66%	16.80%	26.19%	4.07%	31.18%	27.30%
Property Tax	435,421,000	680,212,000	2,840,547,000	1,410,855,000	1,358,570,000	775,828,000	473,620,000	412,478,000	1,013,876,000	15,247,508,000	1,008,092,000	726,765,000	Consumption Taxes	38.03%	10.39%	38.97%	40.96%	56.42%	16.48%	57.12%	45.82%	43.16%	53.14%	43.31%	43.17%

Tax Revenue Comparison - 1995/1996
Wyoming Compared to Mineral Producting States

	Wyoming	Alaska	Colorado	Kentucky	Louisiana	Montana	New Mexico	North Dakota	Oklahoma	Texas	Utah	West Virginia
Asset Taxes
Property Tax	435,421,000	680,212,000	2,840,547,000	1,410,855,000	1,358,570,000	775,828,000	473,620,000	412,478,000	1,013,876,000	15,247,508,000	1,008,092,000	726,765,000
Severance Tax	229,444,428	1,018,206,989	30,274,345	168,745,701	349,069,000	60,208,207	183,900,000	50,650,000	315,549,773	824,076,948	21,400,000	180,238,000
Intangibles Tax
Corporate Franchise	3,000,000				233,516,000			1,417,000	36,264,543			82,197,000
Real Estate Transfer									67,881,873
Estate/Inheritance Tax	4,559,572	1,658,011	34,630,793	81,441,427	58,307,000	15,404,110	13,200,000		6,604,369	160,143,199
Motor Vehicles	49,401,000	35,901,000	153,281,000	183,868,000	99,868,000	55,443,000	119,648,000	38,095,000	521,391,000	988,998,000	46,964,000	77,411,000
Total Asset Taxes	721,826,000	1,735,978,000	3,058,733,138	1,844,910,128	2,099,330,000	906,883,317	790,368,000	502,640,000	1,961,567,558	17,220,726,147	1,076,456,000	1,066,611,000

Income Tax
Dividends and Interest
Corporate Income		326,270,000	205,700,000	284,733,000	327,543,000	75,762,000	163,402,000	74,299,000	163,734,000		176,781,000	235,123,000
Business Profits
Corporate Franchise										1,639,015,429
Individual Income			2,274,401,000	2,551,688,000	1,160,262,000	383,092,000	643,024,000	151,592,000	1,512,410,000		1,139,080,000	750,889,000
Total Income Taxes	-	326,270,000	2,480,101,000	2,836,421,000	1,487,805,000	458,854,000	806,426,000	225,891,000	1,676,144,000	1,639,015,429	1,315,861,000	986,012,000

Consumption Taxes
Sales/Gross Receipts	370,272,000	108,820,000	2,610,399,000	1,784,031,000	3,550,146,000	-	1,586,215,000	312,341,000	2,023,406,000	13,898,855,661	1,417,562,000	797,289,000
Selective Sales Tax	72,743,000	130,294,000	925,787,926	1,463,273,049	1,094,283,000	269,478,000	540,429,000	303,722,000	738,293,000	7,490,591,000	409,908,000	761,781,000
Total Consumption Taxes	443,015,000	239,114,000	3,536,186,926	3,247,304,049	4,644,429,000	269,478,000	2,126,644,000	616,063,000	2,761,699,000	21,389,446,661	1,827,470,000	1,559,070,000

Total Tax Income	1,164,841,000	2,301,362,000	9,075,021,064	7,928,635,177	8,231,564,000	1,635,215,317	3,723,438,000	1,344,594,000	6,399,410,558	40,249,188,237	4,219,787,000	3,611,693,000

Tax Revenue Comparison - 1995/1996										Wyoming	Alaska	Florida	Nevada	New	South	Texas	Washington
Wyoming compared to States without an Individual Income Tax														Hampshire	Dakota

	Wyoming	Alaska	Florida	Nevada	New	South	Texas	Washington	Asset Taxes	61.97%	75.43%	44.26%	25.89%	73.46%	46.20%	42.79%	31.60%
					Hampshire	Dakota			Income Taxes	0.00%	14.18%	3.02%	0.00%	9.34%	2.80%	4.07%	0.00%
Asset Taxes									Consumption Taxes	38.03%	10.39%	52.72%	74.11%	17.20%	51.00%	53.14%	68.40%
Property Tax	435,421,000	680,212,000	11,812,880,000	878,568,000	1,765,906,000	557,761,000	15,247,508,000	4,672,882,000
Severance Tax	229,444,428	1,018,206,989	65,424,502			7,086,936	824,076,948	1,333,000
Intangibles Tax			879,744,840
Corporate Franchise	3,000,000
Real Estate Transfer			762,327,137					275,633,000
Estate/Inheritance Tax	4,559,572	1,658,011	421,097,860			22,235,799	160,143,199
Motor Vehicles	49,401,000	35,901,000	816,555,000	91,944,000	52,548,000	43,118,000	988,998,000	331,027,000
Total Asset Taxes	721,826,000	1,735,978,000	14,758,029,339	970,512,000	1,818,454,000	630,201,735	17,220,726,147	5,280,875,000

Income Tax
Dividends and Interest					51,548,000
Corporate Income		326,270,000	1,007,556,000			38,099,000
Business Profits					179,652,000
Corporate Franchise							1,639,015,429
Individual Income						136,000
Total Income Taxes	-	326,270,000	1,007,556,000	-	231,200,000	38,235,000	1,639,015,429	-

Consumption Taxes
Sales/Gross Receipts	370,272,000	108,820,000	11,785,007,000	1,654,667,000		504,414,000	13,898,855,661	9,324,435,000
Selective Sales Tax	72,743,000	130,294,000	5,793,483,000	1,122,987,000	425,740,000	191,334,000	7,490,591,000	2,107,227,000
Total Consumption Tax	443,015,000	239,114,000	17,578,490,000	2,777,654,000	425,740,000	695,748,000	21,389,446,661	11,431,662,000

Total Tax Income	1,164,841,000	2,301,362,000	33,344,075,339	3,748,166,000	2,475,394,000	1,364,184,735	40,249,188,237	16,712,537,000

Tax Revenue Comparison - 1995/1996
Wyoming Compared to Surrounding States									Wyoming	Colorado	Utah	Idaho	Montana	South Dakota	Nebraska
								Asset Taxes	61.97%	33.70%	25.51%	29.52%	55.46%	46.20%	64.18%
	Wyoming	Colorado	Utah	Idaho	Montana	South Dakota	Nebraska	Income Taxes	0.00%	27.33%	31.18%	33.33%	28.06%	2.80%	14.50%
Asset Taxes								Consumption Taxes	38.03%	38.97%	43.31%	37.15%	16.48%	51.00%	21.33%
Property Tax	435,421,000	2,840,547,000	1,008,092,000	651,733,000	775,828,000	557,761,000	4,181,433,000
Severance Tax	229,444,428	30,274,345	21,400,000	800,000	60,208,207	7,086,936	2,132,838
Intangibles Tax
Corporate Franchise	3,000,000
Real Estate Transfer
Estate/Inheritance Tax	4,559,572	34,630,793			15,404,110	22,235,799	12,957,588
Motor Vehicles	49,401,000	153,281,000	46,964,000	63,084,000	55,443,000	43,118,000	84,019,000
Total Asset Taxes	721,826,000	3,058,733,138	1,076,456,000	715,617,000	906,883,317	630,201,735	4,280,542,426

Income Tax
Dividends and Interest
Corporate Income		205,700,000	176,781,000	152,735,000	75,762,000	38,099,000	126,801,000
Business Profits
Corporate Franchise
Individual Income		2,274,401,000	1,139,080,000	655,163,000	383,092,000	136,000	840,210,000
Total Income Taxes	-	2,480,101,000	1,315,861,000	807,898,000	458,854,000	38,235,000	967,011,000

Consumption Taxes
Sales/Gross Receipts	370,272,000	2,610,399,000	1,417,562,000	598,804,000	-	504,414,000	957,911,000
Selective Sales Tax	72,743,000	925,787,926	409,908,000	301,601,000	269,478,000	191,334,000	464,526,745
Total Consumption Taxes	443,015,000	3,536,186,926	1,827,470,000	900,405,000	269,478,000	695,748,000	1,422,437,745

Total Tax Income	1,164,841,000	9,075,021,064	4,219,787,000	2,423,920,000	1,635,215,317	1,364,184,735	6,669,991,171

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.

Other Valuable Deposits

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

Administration

Administrator, Reporting and Payment Requirements

For Ad Valorem tax purposes, minerals are a state assessed property. The ad valorem tax relates to the ownership interest in the mineral removed, extracted, severed or produced, and the incidence of the tax is on all the interest owners in proportion to their ownership shares unless exempted by law. Annually, on or before February 25 of the year following the year of production, a signed sworn statement in a format prescribed by the department of revenue is submitted to the department. For solid mineral production the mine operator shall report the production and pay the taxes.

Royalty interest owners and non-operating working interest owners who do not elect to take their working interest share of production in-kind and market such production under a separate marketing arrangement are not allowed to separately report severance and gross products taxes. Such reporting resides with the operator. This also applies to any interest owner choosing to take in kind interest.[1] If the option to separately market is not exercised by the interest owner the operator shall report the interest owner’s portion of the production and pay the taxes. The interest owner instead of reporting and paying the taxes on the production he has taken in kind, himself, may request in writing to the operator, that the operator report and remit the taxes for him. Oil and gas operators can request in writing a sixty day reporting extension prior to the February 25 statutory due date. This usually occurs. Either way the operator is required to report to the department of revenue all reports and information required including the identity of interest owners electing to take production in kind and the actual quantity or volume of production taken in kind.

There is a special reporting provision that requires coal producers to submit a copy of all sales agreements in excess of 10,000 tons to the department of revenue within 18 months of the date of agreement, unless the agreement is not publicly available.

By June 1, or as soon thereafter as possible, (July 1 per Department Rules, Chapter 6, Section 7, H) the Department of Revenue, Minerals Division must certify to the each county assessor the assessed value of minerals in each county. Annually, on or before October 10, the county treasurer must send a written statement of the total tax due, itemized as to the property description, assessed value and mill levies to each taxpayer at their last known address. Ad valorem taxes are paid to the county treasurer’s office in which the taxes were levied. The taxes can be paid in two installments, the first installment is due by November 10, and the second installment is due May 10, of the following year. If the taxpayer elects to pay in one installment, it is due by December 31 of the assessment year. The time span for the reporting, assessing and the paying of ad valorem taxes can create problems when it comes to the collection of the tax. The time line on page 7 shows the time that lapses between the actual production of the minerals and the time when property taxes are paid.

The taxpayer both reports production and pays severance taxes to the Department of Revenue. Severance tax reports on the previous month’s production are due by the 25^th of each month along with payment for the taxes. An extension can be given, if the department receives a written request five days prior to the due date. If an extension is granted, 90 percent of the estimated tax must still be paid by the statutory due date, with the remaining tax to be remitted with the extended return. Monthly reporting is not required if the taxes are less the $30,000.00 in a calendar year. Annual reporting can then be used with the annual report due by February 25 on the previous year’s production. Tax payment must be made when the report is submitted.

For solid mineral production the mine operator shall report the production and pay the taxes. For oil and gas, the gross product attributable to an working or non-working interest owner shall be remitted by the interest owner or may be remitted on behalf or the interest owner in proportion to his ownership interest by the operator. This also applies to any interest owner choosing to take-in-kind interest. If the option to separately market is not exercised by the interest owner, the operator shall report the interest owner’s portion of the production and pay the taxes. The interest owner instead of reporting and paying the taxes on the production he has taken in kind, himself, may request in writing to the operator, that the operator report and remit the taxes for him. Either way the operator is required to report to the department of revenue all reports and information required including the identity of interest owners electing to take production in kind and the actual quantity or volume of production taken in kind.

For both ad valorem and severance tax reporting, in-kind production can create reconciliation problems. If the in-kind interest owner chooses to report his own gross value of production and pay his own taxes, many times the volume or quantity reported by the in-kind interest owners does not reconcile with the total reported by the operator. If the department cannot settle the difference, the matter will be heard by the Board of Equalization.

The form used to report production for ad valorem taxes is different from that used for severance taxes. The Mineral Tax Division staff reconcile volume and production information contained on the monthly severance returns with the same information reported on the annual gross products (ad valorem) return. This reconciliation effort takes place at three levels: Severance to Gross products match; Wyoming Oil and Gas Conservation Commission Form 2 to Annual Gross Products; and Operator/Take In-Kind Reconciliation. The Department of Audit performs audits of taxpayer returns. The scope of their audit includes the examination of return information in conjunction with production payment records of the taxpayer.

Enforcement Provisions

If the necessary reports are not received for either ad valorem or severance taxes, the Department of Revenue can value the property from the best information available to determine the its fair market value.

Penalties are imposed for failure to file reports. For ad valorem taxes the penalty is 1 percent of the taxable value of the production not to exceed $5,000.00 for each calendar month the report is late. The penalty for failure to file a monthly severance tax report is a maximum of $1,000.00. The penalty for failure to file an annual severance tax report is 5 percent of the taxes due for every thirty days the report is late. The penalty should not exceed 25 percent of the tax due. There is also penalties for a tax deficiency due to negligent or intentional disregard of rules and regulations. The department can waive severance tax and ad valorem penalties for good cause.

If severance taxes are not paid, the department can notify the purchaser of the mineral product to withhold and remit to the department the current taxes as they become due.

Ad valorem taxes become delinquent after the day on which they are due. County commissioners can calculate an interest rate of 18 percent on the net amount of deficient taxes due. The interest that accrues on delinquent severance taxes is the average prime interest rate as determined by the State Treasurer plus 4 percent. The interest rate will not be less than 12 percent or greater than 18 percent.

Liens can be filed for failure to remit taxes. For failure to remit payment of ad valorem taxes on minerals, a lien can be filed on the real and personal property owned by the person against whom the tax was assessed subject to all prior existing liens.

A lien for severance taxes is a lien superior to any other liens except federal liens, on the gross product, or sale proceeds therefrom, of the mine or mining claim from and after the time the minerals are extracted until the taxes are paid. There can also be a severance tax lien on the interest of any person extracting any valuable deposit from and after the time they are extracted until the taxes are paid. This tax lien shall have preference over all liens except any valid mortgage or other liens of record filed or recorded.

The Department of Revenue can request audits of companies reporting mineral production values to establish if; taxable volumes or values are accurately reported, clerical errors were made in determining taxable volumes or values, taxable values or volumes were not calculated following Wyoming statute or rules, and an additional payment for production was received and not reported. The Wyoming Department of Audit performs the audits requested. Any findings by the audit that results in a change in valuation must be certified to the county assessors.

The department must provide taxpayers with a 14 day written notice before an audit commences. Unless otherwise agreed to, the audit must be completed and findings reported to the taxpayer within two years after the audit begins. Any additional assessment, including penalties and interest, shall be issued within one year following the completion of the audit. The taxpayer after receiving the audit findings has 60 days to submit a response.

Taxpayer Remedies

The taxpayer can request a value determination from the department and propose a value determination method. A taxpayer can also request and receive from the department interpretations of statutes and rules.

Following determination of the assessed value of minerals for ad valorem purposes, the department shall notify the taxpayer of the value. The taxpayer has thirty days to file an objection with the Board of Equalization and must at the same time file objections with the county treasurer where the property is assessed. The treasurer must notify the county assessor and the county commissioners of the appeal and provide an estimate of taxes under appeal based upon the previous year’s tax levy.

A taxpayer can also appeal to the Board of Equalization the valuation of minerals for severance taxes. The appeal does not relieve the taxpayer from paying the taxes due nor does payment invalidate an appeal.

The Board of Equalization can hear appeals from affected taxpayers, boards of county commissioners and the Department of Revenue. Decision made by the Board of Equalization can be appealed to the district court of the county in which the property or some part of it is situated.

If ad valorem taxes are paid under protest with an appeal pending, the county treasurer should deposit the appealed amount in an interest bearing account and shall not distribute it until a decision is made. For appeals of severance taxes for which protest payment have been made, the state treasurer shall deposit the appealed amount in an interest bearing account until a decision is made.

The statutes provide for the distribution of refunds for overpayment of both ad valorem and severance taxes. The over-payment can be the result of refiled reports, determined by audit or be a result of the appeal process. Refunds can also be applied to future tax payments as prescribed by statute.

Collection and Distribution

Collection

The past collection history and significance of mineral taxes for ad valorem purposes is discussed in the section on property taxes. The taxes are collected by the county treasurers and distributed by the county treasurers to the various taxing jurisdictions within the county according to the mill levies allowed.

The production and value of minerals have increased dramatically over the years. Table 4B shows the growth of mineral production in Wyoming from 1974-1997. Just as important as the rise in mineral production, is the rise in the tax rates that have been implemented by the legislature over the years. Table 4C shows a history of the severance tax rates in Wyoming. During the late 60’s and early 70’s, severance taxation was the same for all minerals, 1 percent of the value. In 1969, minerals did receive a break when the state legislature no longer levied the statewide mill levies authorized by the state constitution. In 1973, the primary minerals, except oil, began to see an increase in production and in the same year the legislature increased the severance tax rates. Refer to chart A, page 13.

TABLE 4B

	Oil Barrels	Gas MCF	Coal Tons	Trona Tons	Uranium Ore-Tons	Yellowcake-Pounds
1974	127,555,252	265,600,635	20,649,754	7,070,617	2,287,697
1975	120,629,951	248,528,881	23,784,128	7,379,792	2,736,663
1976	120,571,157	260,752,431	31,085,412	8,800,607	3,302,422
1977	124,328,857	272,300,637	44,046,842	10,215,602	3,986,025
1978	122,799,348	273,724,975	58,174,825	9,974,237	5,517,070
1979	115,678,022	333,322,180	71,445,178	11,771,985	5,512,345
1980	114,284,682	349,634,385	94,986,433	12,159,241	5,352,337
1981	111,912,600	353,076,052	102,695,563	11,787,731	4,560,683
1982	108,055,462	351,192,737	107,954,583	10,073,690	3,895,510
1983	110,420,981	395,656,547	112,187,874	10,542,417	3,022,650
1984	117,289,568	447,515,295	130,745,779	10,971,209	1,634,262
1985	123,172,530	412,026,614	140,424,446	10,776,304	619,967
1986	111,148,577	352,799,892	128,145,751	11,919,530	226,821
1987	105,200,000	357,000,000	133,000,000	13,402,500	184,999
1988	111,207,959	471,363,924	163,801,374	15,114,169	280,749
1989	107,742,581	665,698,542	171,038,569	16,212,715		1,540,412
1990	86,388,844	690,356,068	183,908,400	16,231,527		1,331,935
1991	94,926,995	755,538,523	194,037,766	16,175,601		2,036,068
1992	84,640,058	765,253,721	190,025,252	16,407,911		1,606,438
1993	86,399,855	808,157,126	210,062,286	16,031,147		1,107,083
1994	75,963,900	884,365,795	236,948,922	16,128,501		1,207,421
1995	71,594,921	899,139,137	263,505,214	18,449,366		1,381,503
1996	68,905,892	907,954,365	278,272,409	18,550,633		1,911,514
1997	68,057,025	997,424,673	281,729,283	19,428,196		2,325,458

Most of the tax increases were put in place during the seventies. The year 1981 was the last year in which a mineral tax increases were enacted. Overall tax rates between 1981 and 1984 remained stable. In 1984 and 1985, rates were reduced for underground coal, oil collection wells, and tertiary oil production. In 1988, the coal severance rates for both strip mines and underground, and uranium were decreased. Several special exemptions, classifications and deductions were also enacted between 1985-1988, which have effectively reduced the tax burden to the mineral industry. Additional rate decreases and incentives were granted to the coal industry, trona industry and the petroleum industry in 1993. Though crude oil and uranium production continued to decrease, production of natural gas, coal and trona did steadily increase. The legislature was not responding to a decrease in mineral production when they decreased severance tax rates but to the market price of the mineral product. In 1999, the legislature gave additional rate decreases to the oil industry by allowing severance tax rate reductions for oil produced at $20.00 or less a barrel.

Chart 4B, page 13 shows the average price used to determine the assessed value of oil, gas, coal, trona and uranium between 1974 to 1997. The general trend of the market value of these minerals has been downward. The production of gas, coal, and trona, however, has continued to show annual increases. The actual severance tax collections since 1985 have decreased. This is portrayed in chart 4C, page 14. The primary reasons for this decrease are the decline in production and market price of crude oil and uranium and a reduction in the market price of gas, coal, and trona. The decline in the valuation of production, is due to factors which are for the most part, outside of the control of either the state of Wyoming or the producers inside the state’s boundaries.

TABLE 5B

The actual taxpayer is the purchaser of the good or service. The remitter of the tax in most instances is the vendor who sells the taxable good or provides the service. The vendor collects the tax on the sales price [6] from the purchaser at the time the good is sold or the service is rendered. By Wyoming § 39-15/16-107(b)(i), the sales or use tax is not to be collected by the vendor of a motor vehicle, house trailer, trailer coaches, trailers and semi-trailers. The purchaser must pay the tax directly to the county treasurer. Vendors who sell motorcycles, mopeds, boats, three and four-wheelers, and other off-road recreational vehicles are required to collect the sales tax at the time of sale.

In 1998, the legislature ratified by statute a practice of the Wyoming Department of Revenue of permitting certain large taxpayers to pay sales taxes directly to the Department of Revenue rather than remitting them first to a vendor for payment.

The purchaser is required to pay the use tax when the out-of-state vendor does not collect Wyoming sales tax. The purchaser does not have to pay a use tax if he pays the sales tax of the state of purchase. If the tax is less than Wyoming’s sales tax, the purchaser must pay the difference between the two taxes to the State of Wyoming as a use tax.

There are special requirements for contractors under Wyoming § 39-15/16-301/311. Any contractor, prime or sub, who furnishes tangible personal property under contract or in the development of real property, is the consumer or user of the tangible personal property within the sales tax laws of Wyoming. In other words, the contractor must pay sales tax on the materials, fixtures and supplies used in his work. Contractors do not pay sales tax on labor performed on real property but they do on labor performed on tangible personal property. The contractor can pay the sales tax to the vendor, or he can pay it directly to the Department of Revenue. Prime contractors are responsible for assuring that sub-contractors pay the taxes due.

Tax Exemptions

The State of Wyoming assesses sales and use taxes on the sale of tangible personal property and specified services. Specified services are primarily related to a service that is performed on tangible personal property. For example, the state taxes the labor a mechanic performs on the repair of an automobile. The law also states we must tax certain services even though they are not a service on tangible personal property. These services include taxation of telephone, telegraph, utility and transportation services, oilfield services and admissions and amusements.

With regards to sales and use tax exemptions, the difference must be explained between what is a specific written exemption and an exemption that is not written into the law, but because the law does not state it is to be taxed, receives exemption status. An example of a written exemption would be the wholesale sales and tangible personal property consumed in production.

Many services are not taxed because they do not fall in the category of those services “performed for the repair, alteration of improvement of tangible personal property” (Wyoming § 39-15-103(a)(i)(J)). They are considered exempt even though there is no written exemption. Examples of these services are professional services such as those performed by CPA’s and attorneys.

The written exemptions in the Wyoming’s Sales tax law are stated in Wyoming § 39-15-105 and 39-16-105. The Wyoming State Legislature classified these exemptions in 1994.

1) Sales of services and tangible personal property which are protected by the Constitutions of the United States or Wyoming.

2) Sales of services and tangible personal property protected by federal law:

a) Interstate transportation of freight or transportation.

b) Sales of transportation equipment (i.e. railroad rolling stock, aircraft, trucks, and tractor-trailer units) that operates in interstate commerce.

c) Leases of motor vehicles and trailers for which the rental is paid from the gross receipts of the operation and the operator holds an interstate authority or permit.

d) Sales to the Wyoming joint apprenticeship and training programs approved by the United States Department of Labor.

e) Sales of food purchased with food stamps.

3) Sales of services and tangible personal property consumed in production:

a) Sale of tangible personal property when it is to become an ingredient or component of tangible personal property that is going to be held for sale. The purchase of containers, labels or shipping cases for tangible personal property are not subject to sales taxation.

b) Sale of livestock is not taxed. Sales of feeds for use in the feeding of livestock or poultry for marketing purposes is exempt. The State exempts the sales of seeds, roots, bulbs, small plants and fertilizer planted or applied to land if the end products are to be sold or used subject to a state or federal crop set aside program.

c) Intrastate transportation of raw farm products to processing or manufacturing plants.

d) Sales of power or fuel to a person engaged in the manufacturing, processing, agriculture and oil field production when the power is consumed directly in manufacturing, processing, agriculture or oil production.

e) Sales of power or fuel to a person engaged in the transportation business when the same is consumed directly for actual transportation purposes. This exemption does not apply if the power or fuel is not taxed as gasoline, gasohol or special fuels and is used to propel a motor vehicle on the highway.

f) Wholesale sales.

4) Sales of services and tangible personal property sold to a government, nonprofit organization, irrigation districts and weed and pest control districts.

a) Sales to the State of Wyoming and its political subdivisions.

b) Sales made to religious or charitable organizations including non-profit senior citizen meal providers. The organization must be conducting religious, charitable or senior citizen functions. Sales of meals to senior citizens by senior citizen centers are not taxed.

c) Occasional sales made by religious or charitable organizations for fund raising purposes to conduct religious or charitable functions or activities.

d) Sales to joint powers board organized under the Wyoming Joint Powers Act.

e) Sales price of admission or user fees for county or municipal owned recreation facilities.

f) Labor or service charges, including transportation and travel, for the repair, alteration or improvement of real property or tangible personal property owned by, or incorporated in projects under contract to the State of Wyoming or any of its political subdivisions.

g) Sales to irrigation districts organized under state law.

h) Sales to weed and pest district organized under state law.

5) Sales of services and tangible personal property which are alternatively taxed:

a) Transportable mobile homes permanently attached to realty after the tax has once been paid.

b) Sales of gasoline, gasohol or special fuels. Sales tax is paid on the sales price of off-road diesel.

6) Sales of services and tangible personal property which are essential human goods and services:

a) Intrastate transportation of sick or deceased persons in a hearse or ambulance.

b) Sales of prescription drugs and other devices used for human relief, i.e. hearing aids, prosthetic devices, wheel chairs, crutches and eyeglasses.

c) Sales of all non-capitalized equipment and disposable supplies which are used in the direct medical or dental care of a patient.

7) Sales of services provided primarily to the following businesses:

a) Services provided for interstate or intrastate transportation of drilling rigs and for the loading, unloading and assembly of drilling rigs.

b) Persons engaged in the business of making loans or supervised financial institutions do not have to pay sales tax on vehicles they repossess for non-payment of a loan.

8) Exceptions of sales of tangible personal property or services for economic incentives:

a) Intrastate transportation by a public utility or others:

1. Employees to or from work when paid or contracted by the employee or employer.

2. Freight and property including oil and gas by pipeline.

b) Sales of the services of professional engineers, geologists or similar professions and charges made by contractors for oil or gas drilling activities for new exploration, or to deepen existing wells below the depth previously drilled or for drilling stratigraphic test or core holes to obtain geologic information.

c) Sales of newspapers and school annuals.

d) Sales of tangible personal property or sales for the repair, assembly, alteration or improvement of railroad moving stock.

e) Sales of carbon dioxide or other gases used in tertiary production.

f) Sales of lodging services provided by a person known to the trade and public as a guide or outfitter.

g) Sales of farm implements are not subject to the additional one percent statewide sales tax that went into effect July 1, 1993. Sales of farm implements are taxed at 3 percent plus any applicable optional sales taxes instead of the 4 percent statewide tax on tangible personal property and services.

h) Sale or lease of any aircraft and the tangible personal property permanently affixed or attached as a component part of the aircraft.

Wyoming does tax food purchases not purchased with food stamps. This is a common exemption adopted by many states. Twenty-seven of fifty states and the District of Columbia exempt food sales from taxation. Table 5E, page 12 under tax rates describes which states currently exempt food sales, prescription drugs and non-prescription drugs. Another common exemption that other states allow that Wyoming does tax is utility service to residences. Twenty-three states including Wyoming tax residential utility service for electricity, natural gas and other fuel.

Table 5C lists the services exempt from sales and use tax in Wyoming. [7]

If you combine the written exemptions and those considered exempt because they are not taxed by statute, there are over 100 exemptions and growing. Each time a new service is offered by some enterprising individual that is not performed on tangible personal property, it becomes exempt.

Table 5C

Rates

The first recorded sales tax in Wyoming history were limited to a four cents a gallon tax on the sale of gasoline and a tax of ten cents a pound on sales of vegetable oleomargarine.[8] Wyoming enacted its sales and use tax, largely in its present form in 1967. The tax rate prior to 1967 was 2.5 percent, moving to 3 percent in that year. On July 1, 1993, the tax rate was increased to 4 percent. This additional one-percent will terminate on June 30, 2002, unless it is extended by the state legislature (Wyoming § 39-15-104(c)).

In addition to the 4 percent statewide sales and use tax rates, in 1973 a sales and use tax option was made available to counties to be used for general revenue. Counties can levy the tax in increments of .5 percent not to exceed one-percent. Initially, the tax can be proposed by a petition presented to the county commissioners signed by 5 percent of the electorate of the county voting at the last general election or with approval of two-thirds of the governing bodies of the incorporated municipalities within the county. Once the tax is proposed, it must be approved by a majority of the electorate of the county. The tax can be renewed in one of two ways: (1) Depending on the original resolution, the tax can be renewed each general election, every two years or at every other general election, every four years, by a vote of the electorate of the county. (2) Once the tax is imposed by the vote of the electorate of the county, it can be renewed by a resolution approved by the governing board of the county and by an ordinance approved by the majority of the governing bodies of the municipalities within the county. Method two has never been used. (Wyoming § 39-15/16-201/211)(i).

In 1984, the legislature allowed counties upon majority vote of the electorate, to assess another one-percent sales tax for construction of capital facilities. The tax, when proposed, must be for specific construction projects and for a specific amount of time. The amount of time the tax is assessed is based upon the time it is estimated it will take to collect the tax to either pay for the projects or to pay off bonds issued for the projects. (Wyoming § 39-15/16-201/211)(iii).

An optional lodging tax was allowed in 1986 by the state legislature. Initially, the tax can be proposed by a petition presented to the county commissioners signed by 5 percent of the electorate of the county voting at the last general election or with approval of two-thirds of the governing bodies of the incorporated municipalities within the county. The tax must be adopted by the majority vote of the electorate of a Wyoming county or a municipality within the county. The tax can be levied in increments of one-percent not to exceed 4 percent. The tax is levied against lodging services[9] and is paid by transient guests [10]. (Wyoming § 39-15/16-201/211)(ii).

Until 1998, the tax collected was to be used only for travel and tourist promotion with the possibility of 10 percent of the revenues going to the general revenues of the governmental entity. The 1998 legislature allowed as much as 30 percent of the revenues generated to be used for the mitigation of visitor impact services. Depending on the percentage of the tax levied, a certain amount of lodging tax collections for the previous three years must be collected before the tax money can be used to defer tourism impacts.[11]

The lodging tax can be renewed by submitting it to the vote of the electorate at a general election held every four years.

Table 5D, page 11 issued by the Wyoming Department of Revenue, Excise Tax Division shows the sales tax rates for the individual Wyoming counties and towns as of January 1, 1999.

Table 5E, page 12 shows as of January 1, 1999 the sales tax rate in each state and the states that allow exemptions for food, prescription drugs and non-prescription drugs.[12] The tax rates shown only reflect the statewide rates for each state and do not include optional local sale tax rates.

Table 5D

WYOMING SALES AND USE TAX RATES

The tax rate table listed below is effective January 1, 1999.

Co#	County	Base State Tax Rate		General Purpose County Option Tax Rate		Specific Purpose Option Tax		Total Rate for General Sales	County/City/ Town Lodging Tax	Lodging Option Tax Rate		Total rate for Lodging and Sales
05	Albany	4%	+	1%	+	1%	=	6%	Albany	3%	=	9%
09	Big Horn	4%	+	1%	+		=	5%	Lovell, only Greybull,only	2% 2%	= =	7% 7%
17	Campbell	4%	+	1%	+		=	5%	Gillette, only	2%	=	7%
06	Carbon	4%	+	1%	+	1%	=	6%	Carbon	2%	=	8%
13	Converse	4%	+	1%	+		=	5%	Converse	2%	=	7%
18	Crook	4%	+	1%	+		=	5%	Crook	2%	=	7%
10	Fremont	4%	+		+	1%	=	5%	Fremont	2%	=	7%
07	Goshen	4%	+		+	1%	=	5%	Goshen	3%	=	8%
15	Hot Springs	4%	+	1%	+		=	5%	Hot Springs	2%	=	7%
16	Johnson	4%	+	1%	+		=	5%	Johnson	2%	=	7%
02	Laramie	4%	+	1%	+		=	5%	Laramie	2%	=	7%
12	Lincoln	4%	+	1%	+		=	5%	Cokeville, only Afton, only	2% 2%	= =	7% 7%
01	Natrona	4%	+	1%	+		=	5%	Natrona	2%	=	7%
14	Niobrara	4%	+	1%	+	1%	=	6%	Lusk, only	2%	=	8%
11	Park	4%	+		+		=	4%	Park	4%	=	8%
08	Platte	4%	+	1%	+		=	5%	Guernsey, only	2%	=	7%
03	Sheridan	4%	+	1%	+	1%	=	6%	Sheridan, only	2%	=	8%
04	Sweetwater	4%	+	1%	+		=	5%	Sweetwater	2%	=	7%
23	Sublette	4%	+		+		=	4%			=	4%
22	Teton	4%	+	1%	+	1%	=	6%			=	6%
19	Uinta	4%	+	1%	+		=	5%	Evanston, only	2%	=	7%
20	Washakie	4%	+		+		=	4%	Washakie	2%	=	6%
21	Weston	4%	+	1%	+		=	5%	Weston	2%	=	7%

TABLE 5E

State Sales Tax Rates

January 1, 1999

-- Exemptions --

State	Tax Rates	Food	Prescription Drugs	Non-prescription Drugs
ALABAMA	4		*
ALASKA	None
ARIZONA	5	*	*
ARKANSAS	4.625		*
CALIFORNIA	6	*	*
COLORADO	3	*	*
CONNECTICUT	6	*	*
DELAWARE	None
FLORIDA	6	*	*	*
GEORGIA	4	*		*
HAWAII	4		*
IDAHO	5		*
ILLINOIS	6.25	1%	1%	1%
INDIANA	5	*	*
IOWA	5	*	*
KANSAS	4.9		*
KENTUCKY	6	*	*
LOUISIANA	4		*
MAINE	5.5	*	*
MARYLAND	5	*	*	*
MASSACHUSETTS	5	*	*
MICHIGAN	6	*	*
MINNESOTA	6.5	*	*	*
MISSISSIPPI	7		*
MISSOURI	4.22	5	1.225%	*
MONTANA	None
NEBRASKA	4.5	*	*
NEVADA	6.5	*	*
NEW HAMPSHIRE	None
NEW JERSEY	6	*	*	*
NEW MEXICO	5		*
NEW YORK	4	*	*	*
NORTH CAROLINA	4		*
NORTH DAKOTA	5	*	*
OHIO	5	*	*
OKLAHOMA	4.5		*
OREGON	None
PENNSYLVANIA	6	*	*	*
RHODE ISLAND	7	*	*	*
SOUTH CAROLINA	5		*
SOUTH DAKOTA	4		*
TENNESSEE	6		*
TEXAS	6.25	*	*
UTAH	4.75		*
VERMONT	5	*	*
VIRGINIA	3.5		*	*
WASHINGTON	6.5	*	*
WEST VIRGINIA	6		*
WISCONSIN	5	*	*
WYOMING	4		*
DIST. OF COLUMBIA	5.75	*	*	*

Source: Compiled by FTA from various sources.

Administration

Licensing, Reporting and Payment

The Wyoming Department of Revenue, Excise Division, is the administrator of the Wyoming sales and use tax statutes. All taxes to be paid, except for those collected on the purchase of a motor vehicle, house trailer, trailer coaches, trailers and semi-trailers which are paid to the county treasurers, are paid to the Wyoming Department of Revenue, Excise Division.

All vendors, operating in the state and required to collect sales taxes in Wyoming, must be licensed to do so by the Department of Revenue prior to commencing business. Chapter 2, Section 5 of the department’s rules and regulation outlines the requirements for licensure. Applicants must complete an application, provide any necessary supporting documentation and pay a license fee of $60.00 before obtaining a license. Governmental entities that sell, rent or lease tangible personal property or perform taxable services must also collect the sales tax and be licensed. The department can enter into voluntary license agreements with out-of-state vendors who collect Wyoming sales tax on sales to Wyoming residents. A sales anduse tax license is not required of Indian tribes who do business on the Wind River Indian Reservation. Licenses are not transferable if the business is sold.

Contractors, who submit use tax payments on materials, fixtures and supplies directly to the department, are not considered vendors and do not have to be licensed. A contractor must be registered with the department and must disclose information about all projects prior to commencing work. Project disclosures must include the identification of all sub-contractors. Non-resident prime contractors must post a surety bond with the department equal to 4 percent of the contract price. Non-resident sub-contractors can also post a bond equal to 4 percent of their contract price with the prime contractor. Sub-contractors can post the bond to prevent the prime contractor from withholding use tax due to the department from each payment he makes to the sub-contractor. (Wyoming § 39-15/16-301/311)

The department permits taxpayers, who choose to pay the department directly for their sales tax liability. They are issued a direct payment permit. It is shown to the vendor at the time of the sale to prevent paying the sales tax.

Every vendor licensed with the Department of Revenue is required to submit a sales tax return on a form prescribed by the department on or before the last day of each month. The report states the preceding month’s gross sales and is accompanied by the tax payment. The department can authorize, if the total tax due is less than $150.00, a quarterly or annual return. Returns are due on or before the last day of the month following the end of the quarter or the year for which the tax is collected. Vendors going out of business must file a report within thirty days of discontinuing or selling their business.

Contractors must remit sales/use tax not paid to a vendor to the Department of Revenue by the last day of the month following the month of purchase. Prime contractors are ultimately responsible for the sales tax that is to be paid on purchases or services of their non-resident sub-contractors. They are required to withhold the 4 percent tax due from each payment made to the sub-contractor until the sub-contractor furnishes the prime contractor with a certificate issued by the department showing all sales/use taxes accruing have been paid. A bond filed with the department directly by the non-resident sub-contractor will also release the prime contractor of this obligation. Forms for reporting are provided by the department.

Direct pay taxpayers are required to report by the last day of the month to the department their purchases and services subject to the Wyoming sales and use tax for the previous month.

Taxpayers liable for use tax are required to make payment to the department on or before the last day of the month following the month of purchase. There is a specific form required to file a use tax return.

County treasurers are required to remit the sales taxes collected on motor vehicles, house trailers, trailer coaches, trailers and semi-trailers to the Department of Revenue once a month. The taxes are due by the 20^th of the month following the month of collection.

If a required report is not received by the date due, the department will give written notice by mail to the tax remitter to file a report on or before the last day of the month following the notice of delinquency. If a report is still not received, the department can prepare a report based upon the best information available. The tax due is based upon that report and will be assessed applicable interest and penalties.

Enforcement

Interest:

Interest is assessed on past due tax payments to the department at a rate of 4 percentage points over the prime interest rate as determined by the Wyoming State Treasurer. Interest is assessed beginning on the first day after which the tax payment was due.

County treasurer’s are required to collect interest on taxes due on motor vehicles, house trailers, trailer coaches, trailers and semi-trailer if the tax is not paid within forty-five days of the purchase of the vehicle. Interest is paid both to the Department of Revenue and the county in which the tax is paid. An interest rate of 3 percent per month accrues on the past due balance of tax. Once collected, the tax plus interest is submitted to the Department. The county is entitled to a 10 percent civil fee on the sales tax owed.

Penalties:

If any payment or reporting deficiency is due to negligent or intentional disregard of rules or regulations but without intent to defraud, a 10 percent penalty on the tax due can be assessed by the department. If the deficiency is due to fraud, the penalty on the tax due is 25 percent.

It is considered a misdemeanor if a vendor intentionally collects and keeps more than the tax that is due or submits a false or fraudulent return to the Department.

Vendor licenses can be revoked by the department for violation of any provision of the sales/use tax statutes. Department must first provide notice and an opportunity for a hearing. The department can after giving notice and an opportunity for a hearing, suspend the license of a vendor until he comes into compliance with the provisions of the statutes.

Every vendor is required to keep for three years at their principal place of business, records and books necessary to determine the amount of tax for which he is liable. The vendors must also preserve for three years invoices and books showing all merchandise purchased for resale. If a vendor fails to keep these records, he is required to bear the burden of proof in any legal action.

Liens:

Any tax due under this article is considered a debt to the state and becomes a lien against the real and personal property of the parties to the transaction, unless the purchaser can prove he paid the tax to the vendor. Notice of the lien is filed with the county clerk in the county in which the parties reside.

Tax Sales:

After the appropriate judicial proceedings, the department with Board of Equalization approval can seize and sell at public auction the property of any person owing taxes, interest and penalties.

Taxpayer Remedies

Taxpayers and tax remitters can make appeals of department administrative decisions to the State Board of Equalization. The decision of the board can be appealed to the state judicial system once all taxes, penalty and interest have been paid (Wyoming § 39-15/16-109 (a)). The court can for good cause stay enforcement of this provision, but it will not prevent interest from accruing.

Any tax, penalty or interest that has been paid in error is entitled to be refunded to the payer or credited again future tax returns. The request for the refund or credit must be made within three years from the date of overpayment.

The department must bring a court action to recover delinquent taxes, penalties and interest within three years following the delinquency. If the delinquency is discovered after an audit, the tax remitter has 30 days to pay the tax before the three-year period begins. Interest and penalty on an assessment generated by an audit begins to accrue from the filing period in which the taxes were originally due.

Tax Collections and Distributions

Tax Collections

Currently there are 5 states that do not have a statewide sales tax. These are Alaska, Delaware, Montana, New Hampshire and Oregon. Table 5F, page 17 compares the distribution of tax sources for all fifty states. General sales taxes include the gross receipts taxes assessed by states such as New Mexico and Hawaii. Selective sales taxes are excise taxes on specific products such as cigarettes, gasoline, special fuels and alcoholic beverages. Other taxes include severance and property taxes, as well franchise taxes. Sales tax collections in 1996 amounted to 33.7 percent of the total state tax revenues. This is very close to the United States average of 33.3 percent. Wyoming does not have a state individual and corporate income tax. It is one of six states who does not have a individual income tax and one of four states which does not have a corporate income tax. Wyoming collects most of its taxes from other tax sources. These sources are primarily mineral severance taxes and property taxes.[13]

A comparison of sales and use tax collections is best considered from 1993/94 fiscal year since July 1, 1993 is the date the statewide sales tax was increased from 3 percent to 4 percent. The fiscal year 1992-93 is included to show what difference was made with the one-percent increase. The table below includes only the state portion of the sales/use tax. Estimated sales/use tax collections for FY 1999 are $400 Million.

		Sales and Use Tax Collections
		% of		% of		% of Total
Fiscal Year	Sales Tax	Increase	Use Tax	Increase	Total	Increase
1993-3%	155,709,127.78		22,980,880.24		178,690,008.01
1994-4%	233,268,104.85	49.81%	34,459,185.83	49.95%	267,727,291.18	49.83%
1995-4%	251,738,878.46	7.92%	37,595,583.22	9.10%	289,334,461.76	8.07%
1996-4%	252,517,165.22	0.31%	38,933,791.00	3.56%	291,450,956.23	0.73%
1997-4%	261,820,773.09	3.68%	36,103,697.17	-7.27%	297,924,470.29	2.22%
1998-4%	294,135,686.05	12.34%	33,443,948.47	-7.37%	327,579,634.52	9.95%

There was a 49.83 percent increase in sales and use tax collections between fiscal year 1993 and fiscal year 1994 when the sales tax rate was increased. Since that time, the increases have been moderate. Collection of use tax has out performed collections of sales tax except in FY1997 and 1998 when there was a decrease. The collection of use tax is difficult. Many state residents do not know it is a law and do not understand its purpose. It is also easy to avoid. It is difficult for the Department of Revenue to enforce.

The increase in catalog and electronic sales has caused concern that overall sales and use tax collections will decrease due the use of these marketing mediums. Catalog and Internet sales

TABLE 5F

1998 State Tax Collection by Source

(Percentage of Total)

	Property	Sales		Selective Sales	Individual Income	Corporate Income	Other
ALABAMA	2.4	27.4		24.8	31.3	4.3	9.8
ALASKA	4.1		--	9.8	--	23.2	62.8
ARIZONA	3.6		43.9	13.8	26.8	7.6	4.3
ARKANSAS	0.2		37.3	14.5	34.3	6.2	7.5
CALIFORNIA	5.7		31.5	7.7	41.0	8.3	5.8
COLORADO	0.1		26.0	13.4	48.9	4.6	7.1
CONNECTICUT	0.03		2.3	18.0	36.3	5.7	7.8
DELAWARE	--		--	12.9	38.4	10.4	38.3
FLORIDA	4.4		57.4	17.8	--	5.6	14.8
GEORGIA	0.3		34.5	8.6	45.9	6.4	4.3
HAWAII	--		44.9	15.3	34.1	1.9	3.8
IDAHO	--		31.7	14.6	37.9	5.7	10.1
ILLINOIS	1.0		28.3	17.8	35.3	9.9	7.6
INDIANA	0.0		32.5	12.7	41.7	9.5	3.5
IOWA	--		31.8	14.3	38.3	4.1	11.5
KANSAS	1.0		34.8	12.0	37.5	6.6	8.1
KENTUCKY	5.1		27.8	17.9	34.0	4.7	10.4
LOUISIANA	0.4		32.6	20.0	23.9	5.9	17.3
MAINE	1.8		35.1	13.1	38.2	4.5	7.3
MARYLAND	2.6		23.5	18.3	45.0	4.1	6.4
MASSACHUSETTS	0.0		20.4	9.7	55.4	9.4	5.0
MICHIGAN	7.2		34.9	8.9	31.3	10.9	6.8
MINNESOTA	0.1		28.2	14.7	41.3	6.5	9.2
MISSISSIPPI	0.5		46.8	19.5	19.5	5.6	8.0
MISSOURI	0.2		32.0	14.3	41.0	4.4	8.2
MONTANA	15.7		--	20.3	35.3	6.8	21.8
NEBRASKA	0.2		34.9	15.1	37.0	5.4	7.4
NEVADA	2.2		54.9	30.0	--	--	12.8
NEW HAMPSHIRE	0.1		--	49.4	6.1	23.4	21.0
NEW JERSEY	0.0		30.5	18.5	35.8	7.5	7.6
NEW MEXICO	1.0		40.7	13.9	22.4	5.0	17.0
NEW YORK	--		21.1	13.3	50.6	8.7	6.4
NORTH CAROLINA	0.0		23.6	17.8	44.2	7.2	7.3
NORTH DAKOTA	0.2		28.7	27.9	16.5	7.7	19.1
OHIO	0.1		31.4	15.8	39.5	4.3	9.0
OKLAHOMA	--		25.1	12.9	35.6	4.2	22.3
OREGON	0.0		--	13.4	68.8	5.6	12.2
PENNSYLVANIA	0.7		30.6	16.4	29.2	7.6	15.5
RHODE ISLAND	0.1		29.5	18.9	41.2	3.9	6.4
SOUTH CAROLINA	0.2		38.1	12.9	36.7	3.8	8.4
SOUTH DAKOTA	--		53.1	26.2	--	4.6	16.1
TENNESSEE	--		57.6	18.5	2.3	8.7	13.0
TEXAS	--		50.6	30.1	--	--	19.3
UTAH	--		36.9	12.0	39.8	5.6	5.7
VERMONT	1.0		20.3	24.0	38.2	4.8	11.7
VIRGINIA	0.2		21.1	16.0	51.3	4.2	7.2
WASHINGTON	17.3		58.5	15.0	--	--	9.1
WEST VIRGINIA	0.1		28.4	23.3	28.8	7.4	12.1
WISCONSIN	0.7		27.3	13.8	45.3	6.1	6.8
WYOMING	11.6		39.2	7.9	--	--	41.4

US Totals	2.2		32.9	15.0	33.9	6.5	9.4

U.S. Bureau of the Census.

organizations must collect sales tax if they have nexus[14] within the state. They then submit the collections to the state. If there is no established nexus, the marketing organization does not have to collect the tax, and the purchaser must pay use tax. Not many purchasers comply with the law and knowing who they are so that the department can collect from them is difficult. This problem is receiving national attention and committee has been formed at the Federal level to find a nationwide solution.

The Wyoming Department of Administration and Information, Economic Analysis Division, annually publishes the Wyoming Sales, Use and Lodging Tax Revenue Report. This report contains collection data by industrial sector. The data is gathered from the payers of the actual sales taxes to the Department of Revenues. The payers include vendors, county treasurers (public administration), contractors, use tax payers, direct pay tax payers. There may be overlap in some categories. For example, the amount of sales tax paid by the agriculture sector would include the taxes submitted by vendors of agriculture goods such as ranch and farm equipment dealers and use taxes paid by agricultural interests, but it would not include the grocery sales to agriculture interests. These sales would be included in the wholesale/retail category. Table 5G, page 19 displays collections by Industrial Sector.

TABLE 5I

			FY 1998 Total Sales Tax Distributions
	States Portion	Local Portion	Optional 1%	Optional 1%	Lodging Tax	Total
	Of 4%	Of 4%	General Purpose	Special Purpose	Distributions

FY 1998	236,520,706.49	91,059,197.44	67,140,145.25	14,717,354.36	2,630,785.70	412,068,189.24

FY 1998	Collections attributed to Tourism			51,812,000.00
	% Of Total Sales Taxes attributed to Tourism.			12.57%

The tourism industry is an important contributor to sales tax collections in Wyoming. Morey and Associates and University of Wyoming, College of Business, Department of Economics and Finance prepared a report for the Wyoming Division of Tourism, Department of Commerce in 1998. This study estimated the collections received from sales taxes in FY 1998 from tourist related categories. Table 5H shows the results of this study. An estimated $51,812,000 was collected in sales taxes from tourists between July 1, 1994 and June 30, 1995. This tax collection includes the county option taxes as well as lodging taxes. The amount represents 33 percent of the total taxes collected in these categories.

Table 5I compares the taxes estimated to be collected from tourism to the total sales and use taxes collected statewide from all sources. Tourism in FY 1998 is estimated to represent 12.57 percent of all sales tax collections in the state. It must be understood that this figure does also include sales to Wyoming tourists travelling within the state.

Tax Distributions

The sales and use tax statutes describe how the statewide and optional local sales taxes are to be distributed. (Wyoming § 39-15/16-111/211/311). There is an administrative fee that is deducted from the collection of each type of sales and use tax and deposited to the state general fund.

A one-percent fee is deducted from the statewide 4 percent tax, and the one-percent general purpose and special purpose local option taxes. Two percent is deducted from the lodging tax collections for administration prior to distribution back to the cities and counties. The state treasurer deposits all license fees, penalties and interest collected by the Department of Revenue into the state’s general fund .

The statewide 4 percent sales tax is distributed between the state’s general fund and the cities and counties after the deduction of the administrative fee. Seventy-two percent is deposited to the general fund and 28 percent is returned counties to be shared between the county and municipalities within the county. The amount distributed to each county is determined by the amount of the sales tax collected in each county bears to the total of sales taxes collected in the state. Table 5J depicts the 4 percent sales collections by county in FY 1998.

Table 5J

	SALES / USE TAX COLLECTIONS BY COUNTY
		4% Statewide

			%
County		FY 1998	of Total
Albany		13,943,128.70	4.25%
Big Horn		5,354,646.33	1.63%
Campbell		34,472,711.11	10.52%
Carbon		10,809,870.77	3.30%
Converse		6,971,833.30	2.13%
Crook		2,830,993.41	0.86%
Fremont		18,918,878.12	5.77%
Goshen		4,830,907.17	1.47%
Hot Springs		2,606,601.12	0.80%
Johnson		3,476,736.73	1.06%
Laramie		41,079,633.78	12.53%
Lincoln		8,837,108.60	2.70%
Natrona		42,824,515.84	13.06%
Niobrara		1,010,311.71	0.31%
Park		17,121,120.40	5.22%
Platte		5,339,476.96	1.63%
Sheridan		12,170,013.16	3.71%
Sublette		7,768,397.27	2.37%
Sweetwater		40,028,193.28	12.21%
Teton		25,386,094.08	7.74%
Uinta		13,295,169.84	4.06%
Washakie		5,802,927.14	1.77%
Weston		2,925,109.48	0.89%
Total		327,804,378.30

Natrona County has the second largest county population and is centrally located. It hosts many statewide events. These are some reasons why it ranks first in sales tax collections. Laramie ranks second. It is the state’s largest county and the seat of state government. Sweetwater and Campbell rank third and fourth, respectively. Their high rankings are primarily due to the sales taxes collected from mineral industry related sales. Teton County’s sales tax collections are essentially due to the impact of tourism in the county.

Within the county, the sales tax is distributed to the cities and towns according to the portion that the population of each city and town bears to the total population of the county. That portion of the county’s population residing outside municipal limits determines the county’s share of sales tax money. The percentages are determined after each national census and remain the same until a new census is taken.

There is also a provision in the Wyoming § 39-15-111(c-d) that allows for sales tax funds that are distributed to the state general fund to be used to mitigate the impact effects of construction of large industrial projects within individual counties. Certain requirements must be meant by the project in order for the county to qualify for impact funds.

Local option sales taxes, after the administrative fee is deducted, are returned to the counties in which they are collected. The one-percent general purpose option sales tax is distributed within the county in the same manner as the 4 percent statewide sales tax. The one-percent special purpose option sales tax, after the deduction of the administrative costs, is returned to the county treasurer of the county in which it was collected. The treasurer distributes it to the sponsoring entities to pay for the special projects for which it was voted.

The lodging tax is also distributed to the county treasurer’s after the deduction of the administrative fee. The entity sponsoring the tax does have the option to keep 10 percent of the tax for general revenue. Many sponsoring entities do not exercise this option. The county treasurer distributes whatever is allowed to the sponsoring entity’s tourism joint powers board to be used for travel and tourism promotions. The members of the board are appointed by the sponsoring entities’ governing bodies and must include a representative from each governmental entity that collects the tax and the district representative to the Wyoming Travel commission. The majority of the board’s membership must be comprised of travel and tourism industry representatives.

Table 5K, page 24 shows the distributions of the statewide sales tax and the local option taxes to the counties for FY1998.

TABLE 5K

		SALES / USE TAX DISTRIBUTIONS BY COUNTY
				Fiscal Year 1998

		4% Statewide		1% General		1% Special	Lodging
		Sales Tax		Purpose Tax		Purpose Tax	Tax	Total
Albany	3,873,225.83		3,378,353.67		3,422,852.27		153,578.36		10,828,010.13
Big Horn	1,491,617.21		1,523,634.89		0.00		18,398.95	C	3,033,651.05
Campbell	9,592,175.56		8,500,900.34		0.00		128,349.47	F	18,221,425.37
Carbon	2,981,821.96		2,659,859.44		722,854.36		158,654.74		6,523,190.50
Converse	1,928,350.43		1,702,839.87		0.00		45,439.39		3,676,629.69
Crook	798,034.17		688,561.15		0.00		28,181.89		1,514,777.21
Fremont	5,234,245.72		0.00		10,154.37		135,291.75		5,379,691.84
Goshen	1,364,284.14		0.00		1,178,356.39		30,975.90		2,573,616.43
Hot Springs	719,210.22		731,868.55		0.00		47,838.55		1,498,917.32
Johnson	956,946.06		852,494.88		0.00		61,755.51		1,871,196.45
Laramie	11,450,013.13		9,966,363.02		23,902.39		314,532.77		21,754,811.31
Lincoln	2,480,687.48		2,188,920.46		1,711.76		10,672.35	D	4,681,992.05
Natrona	11,803,814.73		10,549,368.43		0.00		244,579.65		22,597,762.81
Niobrara	280,977.67		245,702.74		256,247.19		16,205.03	E	799,132.63
Park	4,768,069.52		0.00		0.00		738,013.90		5,506,083.42
Platte	1,515,402.90		1,298,391.02		0.00		5,056.58	B	2,818,850.50
Sheridan	3,390,515.20		2,956,220.51		2,973,367.77		125,149.85	A	9,445,253.33
Sublette	2,143,854.13		0.00		0.00				2,143,854.13
Sweetwater	11,102,080.47		9,790,434.39		0.00		232,425.32		21,124,940.18
Teton	7,028,484.63		6,121,489.91		6,127,907.86		0.00		19,277,882.40
Uinta	3,687,194.05		3,274,854.59		0.00		88,497.85	G	7,050,546.49
Washakie	1,643,111.34		0.00		0.00		25,088.56		1,668,199.90
Weston	824,810.89		709,887.39		0.00		22,099.33		1,556,797.61


(a) Lodging tax distributed to the city of Sheridan, only.
(b) Lodging tax distributed to the town of Guernsey, only.
(c) Lodging tax distributed to the towns of Greybull and Lovell, only
(d) Lodging tax distributed to the towns of Afton and Cokeville, only
(e) Lodging tax is distributed to the town of Lusk, only.
(f) Lodging tax is distributed to the City of Gillette, only
(g) Lodging tax is distributed to the City of Evanston, only

SALES AND USE TAX COMPOSITION

Statute Citations and Tax Basis – Sales and Use Tax

The Statute that governs the imposition, administration, exemptions, rates, collection and distribution of sale tax is Wyoming § 39-15-101/311. The Statute that governs the imposition, administration, exemptions, rates, collection and distribution of use tax is Wyoming § 39-16-101/311. Most taxpayers understand what a sales tax is but there is confusion as to what a use tax is and who pays it. The Wyoming Department of Revenue, Excise Division, Guide to Sales and Use Tax, states that the use tax is complimentary to the sales tax and is applied to out-of-state purchases. Use tax places Wyoming merchants on an equal footing with out-of-state vendors who do not collect Wyoming’s sales tax. Consumers making purchases outside the state must pay use tax if no sales tax is paid at the time of purchase in the state of purchase. This would include catalog and internet purchases for which there is no sales tax paid, as well as purchases made in states such as Montana who do not assess a sales tax and deliveries from out-of-state vendors to Wyoming residents for which a collection of sales tax was not made.

Both sales and use tax is an excise tax that is imposed on the retail sale of tangible personal property and certain services. The rental or lease fee of tangible personal property is assessed the excise tax. Motor vehicles, house trailers, trailer coaches, trailers or semi-trailers, computer hardware and operating and canned software are taxed.

Services that are taxed include the sale price paid for intrastate telephone and telegraph service, intrastate transportation of passengers, the provision of electrical and gas utility service, and restaurant and lodging services. The price of admission to places of amusement, entertainment, recreation, games or athletic events is taxed. Contracts for seismographic and geophysical surveying, geographical exploration for oil and gas and oil field services are specifically addressed for taxation. The price paid for services performed for the repair, alteration or improvement of tangible personal property is taxed. Charges for labor to alter, improve, or construct real property are not subject to the sales and use taxes.

Table 5A lists the services in Wyoming currently subject to sales and use tax.[15] These services are either specifically listed by statute to be taxed or fall into the category of “the price paid for services performed for the repair, alteration or improvement of tangible personal property”.

Table 5B presents information on the number of services each state taxes by service category.[16] According to the table, Wyoming taxes 63 services and ranks eighteenth in the nation for number of services taxed.

TABLE 5A

TABLE 5B

The actual taxpayer is the purchaser of the good or service. The remitter of the tax in most instances is the vendor who sells the taxable good or provides the service. The vendor collects the tax on the sales price [17] from the purchaser at the time the good is sold or the service is rendered. By Wyoming § 39-15/16-107(b)(i), the sales or use tax is not to be collected by the vendor of a motor vehicle, house trailer, trailer coaches, trailers and semi-trailers. The purchaser must pay the tax directly to the county treasurer. Vendors who sell motorcycles, mopeds, boats, three and four-wheelers, and other off-road recreational vehicles are required to collect the sales tax at the time of sale.

Tax Exemptions

The written exemptions in the Wyoming’s Sales tax law are stated in Wyoming § 39-15-105 and 39-16-105. The Wyoming State Legislature classified these exemptions in 1994.

3) Sales of services and tangible personal property which are protected by the Constitutions of the United States or Wyoming.

4) Sales of services and tangible personal property protected by federal law:

a) Interstate transportation of freight or transportation.

b) Sales of transportation equipment (i.e. railroad rolling stock, aircraft, trucks, and tractor-trailer units) that operates in interstate commerce.

c) Leases of motor vehicles and trailers for which the rental is paid from the gross receipts of the operation and the operator holds an interstate authority or permit.

d) Sales to the Wyoming joint apprenticeship and training programs approved by the United States Department of Labor.

f) Sales of food purchased with food stamps.

3) Sales of services and tangible personal property consumed in production:

g) Sale of tangible personal property when it is to become an ingredient or component of tangible personal property that is going to be held for sale. The purchase of containers, labels or shipping cases for tangible personal property are not subject to sales taxation.

h) Sale of livestock is not taxed. Sales of feeds for use in the feeding of livestock or poultry for marketing purposes is exempt. The State exempts the sales of seeds, roots, bulbs, small plants and fertilizer planted or applied to land if the end products are to be sold or used subject to a state or federal crop set aside program.

i) Intrastate transportation of raw farm products to processing or manufacturing plants.

j) Sales of power or fuel to a person engaged in the manufacturing, processing, agriculture and oil field production when the power is consumed directly in manufacturing, processing, agriculture or oil production.

k) Sales of power or fuel to a person engaged in the transportation business when the same is consumed directly for actual transportation purposes. This exemption does not apply if the power or fuel is not taxed as gasoline, gasohol or special fuels and is used to propel a motor vehicle on the highway.

l) Wholesale sales.

4) Sales of services and tangible personal property sold to a government, nonprofit organization, irrigation districts and weed and pest control districts.

i) Sales to the State of Wyoming and its political subdivisions.

j) Sales made to religious or charitable organizations including non-profit senior citizen meal providers. The organization must be conducting religious, charitable or senior citizen functions. Sales of meals to senior citizens by senior citizen centers are not taxed.

k) Occasional sales made by religious or charitable organizations for fund raising purposes to conduct religious or charitable functions or activities.

l) Sales to joint powers board organized under the Wyoming Joint Powers Act.

m) Sales price of admission or user fees for county or municipal owned recreation facilities.

n) Labor or service charges, including transportation and travel, for the repair, alteration or improvement of real property or tangible personal property owned by, or incorporated in projects under contract to the State of Wyoming or any of its political subdivisions.

o) Sales to irrigation districts organized under state law.

p) Sales to weed and pest district organized under state law.

5) Sales of services and tangible personal property which are alternatively taxed:

c) Transportable mobile homes permanently attached to realty after the tax has once been paid.

d) Sales of gasoline, gasohol or special fuels. Sales tax is paid on the sales price of off-road diesel.

9) Sales of services and tangible personal property which are essential human goods and services:

a) Intrastate transportation of sick or deceased persons in a hearse or ambulance.

d) Sales of prescription drugs and other devices used for human relief, i.e. hearing aids, prosthetic devices, wheel chairs, crutches and eyeglasses.

e) Sales of all non-capitalized equipment and disposable supplies which are used in the direct medical or dental care of a patient.

10) Sales of services provided primarily to the following businesses:

c) Services provided for interstate or intrastate transportation of drilling rigs and for the loading, unloading and assembly of drilling rigs.

d) Persons engaged in the business of making loans or supervised financial institutions do not have to pay sales tax on vehicles they repossess for non-payment of a loan.

11) Exceptions of sales of tangible personal property or services for economic incentives:

i) Intrastate transportation by a public utility or others:

3. Employees to or from work when paid or contracted by the employee or employer.

4. Freight and property including oil and gas by pipeline.

j) Sales of the services of professional engineers, geologists or similar professions and charges made by contractors for oil or gas drilling activities for new exploration, or to deepen existing wells below the depth previously drilled or for drilling stratigraphic test or core holes to obtain geologic information.

k) Sales of newspapers and school annuals.

l) Sales of tangible personal property or sales for the repair, assembly, alteration or improvement of railroad moving stock.

m) Sales of carbon dioxide or other gases used in tertiary production.

n) Sales of lodging services provided by a person known to the trade and public as a guide or outfitter.

o) Sales of farm implements are not subject to the additional one percent statewide sales tax that went into effect July 1, 1993. Sales of farm implements are taxed at 3 percent plus any applicable optional sales taxes instead of the 4 percent statewide tax on tangible personal property and services.

p) Sale or lease of any aircraft and the tangible personal property permanently affixed or attached as a component part of the aircraft.

Table 5C lists the services exempt from sales and use tax in Wyoming. [18]

Table 5C

Rates

The first recorded sales tax in Wyoming history were limited to a four cents a gallon tax on the sale of gasoline and a tax of ten cents a pound on sales of vegetable oleomargarine.[19] Wyoming enacted its sales and use tax, largely in its present form in 1967. The tax rate prior to 1967 was 2.5 percent, moving to 3 percent in that year. On July 1, 1993, the tax rate was increased to 4 percent. This additional one-percent will terminate on June 30, 2002, unless it is extended by the state legislature (Wyoming § 39-15-104(c)).

An optional lodging tax was allowed in 1986 by the state legislature. Initially, the tax can be proposed by a petition presented to the county commissioners signed by 5 percent of the electorate of the county voting at the last general election or with approval of two-thirds of the governing bodies of the incorporated municipalities within the county. The tax must be adopted by the majority vote of the electorate of a Wyoming county or a municipality within the county. The tax can be levied in increments of one-percent not to exceed 4 percent. The tax is levied against lodging services[20] and is paid by transient guests [21]. (Wyoming § 39-15/16-201/211)(ii).

The lodging tax can be renewed by submitting it to the vote of the electorate at a general election held every four years.

Table 5D, page 11 issued by the Wyoming Department of Revenue, Excise Tax Division shows the sales tax rates for the individual Wyoming counties and towns as of January 1, 1999.

Table 5E, page 12 shows as of January 1, 1999 the sales tax rate in each state and the states that allow exemptions for food, prescription drugs and non-prescription drugs.[23] The tax rates shown only reflect the statewide rates for each state and do not include optional local sale tax rates.

Table 5D

WYOMING SALES AND USE TAX RATES

The tax rate table listed below is effective January 1, 1999.

Co#	County	Base State Tax Rate		General Purpose County Option Tax Rate		Specific Purpose Option Tax		Total Rate for General Sales	County/City/ Town Lodging Tax	Lodging Option Tax Rate		Total rate for Lodging and Sales
05	Albany	4%	+	1%	+	1%	=	6%	Albany	3%	=	9%
09	Big Horn	4%	+	1%	+		=	5%	Lovell, only Greybull,only	2% 2%	= =	7% 7%
17	Campbell	4%	+	1%	+		=	5%	Gillette, only	2%	=	7%
06	Carbon	4%	+	1%	+	1%	=	6%	Carbon	2%	=	8%
13	Converse	4%	+	1%	+		=	5%	Converse	2%	=	7%
18	Crook	4%	+	1%	+		=	5%	Crook	2%	=	7%
10	Fremont	4%	+		+	1%	=	5%	Fremont	2%	=	7%
07	Goshen	4%	+		+	1%	=	5%	Goshen	3%	=	8%
15	Hot Springs	4%	+	1%	+		=	5%	Hot Springs	2%	=	7%
16	Johnson	4%	+	1%	+		=	5%	Johnson	2%	=	7%
02	Laramie	4%	+	1%	+		=	5%	Laramie	2%	=	7%
12	Lincoln	4%	+	1%	+		=	5%	Cokeville, only Afton, only	2% 2%	= =	7% 7%
01	Natrona	4%	+	1%	+		=	5%	Natrona	2%	=	7%
14	Niobrara	4%	+	1%	+	1%	=	6%	Lusk, only	2%	=	8%
11	Park	4%	+		+		=	4%	Park	4%	=	8%
08	Platte	4%	+	1%	+		=	5%	Guernsey, only	2%	=	7%
03	Sheridan	4%	+	1%	+	1%	=	6%	Sheridan, only	2%	=	8%
04	Sweetwater	4%	+	1%	+		=	5%	Sweetwater	2%	=	7%
23	Sublette	4%	+		+		=	4%			=	4%
22	Teton	4%	+	1%	+	1%	=	6%			=	6%
19	Uinta	4%	+	1%	+		=	5%	Evanston, only	2%	=	7%
20	Washakie	4%	+		+		=	4%	Washakie	2%	=	6%
21	Weston	4%	+	1%	+		=	5%	Weston	2%	=	7%

TABLE 5E

State Sales Tax Rates

January 1, 1999

-- Exemptions --

State	Tax Rates	Food	Prescription Drugs	Non-prescription Drugs
ALABAMA	4		*
ALASKA	None
ARIZONA	5	*	*
ARKANSAS	4.625		*
CALIFORNIA	6	*	*
COLORADO	3	*	*
CONNECTICUT	6	*	*
DELAWARE	None
FLORIDA	6	*	*	*
GEORGIA	4	*		*
HAWAII	4		*
IDAHO	5		*
ILLINOIS	6.25	1%	1%	1%
INDIANA	5	*	*
IOWA	5	*	*
KANSAS	4.9		*
KENTUCKY	6	*	*
LOUISIANA	4		*
MAINE	5.5	*	*
MARYLAND	5	*	*	*
MASSACHUSETTS	5	*	*
MICHIGAN	6	*	*
MINNESOTA	6.5	*	*	*
MISSISSIPPI	7		*
MISSOURI	4.22	5	1.225%	*
MONTANA	None
NEBRASKA	4.5	*	*
NEVADA	6.5	*	*
NEW HAMPSHIRE	None
NEW JERSEY	6	*	*	*
NEW MEXICO	5		*
NEW YORK	4	*	*	*
NORTH CAROLINA	4		*
NORTH DAKOTA	5	*	*
OHIO	5	*	*
OKLAHOMA	4.5		*
OREGON	None
PENNSYLVANIA	6	*	*	*
RHODE ISLAND	7	*	*	*
SOUTH CAROLINA	5		*
SOUTH DAKOTA	4		*
TENNESSEE	6		*
TEXAS	6.25	*	*
UTAH	4.75		*
VERMONT	5	*	*
VIRGINIA	3.5		*	*
WASHINGTON	6.5	*	*
WEST VIRGINIA	6		*
WISCONSIN	5	*	*
WYOMING	4		*
DIST. OF COLUMBIA	5.75	*	*	*

Source: Compiled by FTA from various sources.

Administration

Licensing, Reporting and Payment

Direct pay taxpayers are required to report by the last day of the month to the department their purchases and services subject to the Wyoming sales and use tax for the previous month.

Enforcement

Interest:

Penalties:

It is considered a misdemeanor if a vendor intentionally collects and keeps more than the tax that is due or submits a false or fraudulent return to the Department.

Liens:

Tax Sales:

After the appropriate judicial proceedings, the department with Board of Equalization approval can seize and sell at public auction the property of any person owing taxes, interest and penalties.

Taxpayer Remedies

Tax Collections and Distributions

Tax Collections

		Sales and Use Tax Collections
		% of		% of		% of Total
Fiscal Year	Sales Tax	Increase	Use Tax	Increase	Total	Increase
1993-3%	155,709,127.78		22,980,880.24		178,690,008.01
1994-4%	233,268,104.85	49.81%	34,459,185.83	49.95%	267,727,291.18	49.83%
1995-4%	251,738,878.46	7.92%	37,595,583.22	9.10%	289,334,461.76	8.07%
1996-4%	252,517,165.22	0.31%	38,933,791.00	3.56%	291,450,956.23	0.73%
1997-4%	261,820,773.09	3.68%	36,103,697.17	-7.27%	297,924,470.29	2.22%
1998-4%	294,135,686.05	12.34%	33,443,948.47	-7.37%	327,579,634.52	9.95%

The increase in catalog and electronic sales has caused concern that overall sales and use tax collections will decrease due the use of these marketing mediums. Catalog and Internet sales

TABLE 5F

1998 State Tax Collection by Source

(Percentage of Total)

	Property	Sales		Selective Sales	Individual Income	Corporate Income	Other
ALABAMA	2.4	27.4		24.8	31.3	4.3	9.8
ALASKA	4.1		--	9.8	--	23.2	62.8
ARIZONA	3.6		43.9	13.8	26.8	7.6	4.3
ARKANSAS	0.2		37.3	14.5	34.3	6.2	7.5
CALIFORNIA	5.7		31.5	7.7	41.0	8.3	5.8
COLORADO	0.1		26.0	13.4	48.9	4.6	7.1
CONNECTICUT	0.03		2.3	18.0	36.3	5.7	7.8
DELAWARE	--		--	12.9	38.4	10.4	38.3
FLORIDA	4.4		57.4	17.8	--	5.6	14.8
GEORGIA	0.3		34.5	8.6	45.9	6.4	4.3
HAWAII	--		44.9	15.3	34.1	1.9	3.8
IDAHO	--		31.7	14.6	37.9	5.7	10.1
ILLINOIS	1.0		28.3	17.8	35.3	9.9	7.6
INDIANA	0.0		32.5	12.7	41.7	9.5	3.5
IOWA	--		31.8	14.3	38.3	4.1	11.5
KANSAS	1.0		34.8	12.0	37.5	6.6	8.1
KENTUCKY	5.1		27.8	17.9	34.0	4.7	10.4
LOUISIANA	0.4		32.6	20.0	23.9	5.9	17.3
MAINE	1.8		35.1	13.1	38.2	4.5	7.3
MARYLAND	2.6		23.5	18.3	45.0	4.1	6.4
MASSACHUSETTS	0.0		20.4	9.7	55.4	9.4	5.0
MICHIGAN	7.2		34.9	8.9	31.3	10.9	6.8
MINNESOTA	0.1		28.2	14.7	41.3	6.5	9.2
MISSISSIPPI	0.5		46.8	19.5	19.5	5.6	8.0
MISSOURI	0.2		32.0	14.3	41.0	4.4	8.2
MONTANA	15.7		--	20.3	35.3	6.8	21.8
NEBRASKA	0.2		34.9	15.1	37.0	5.4	7.4
NEVADA	2.2		54.9	30.0	--	--	12.8
NEW HAMPSHIRE	0.1		--	49.4	6.1	23.4	21.0
NEW JERSEY	0.0		30.5	18.5	35.8	7.5	7.6
NEW MEXICO	1.0		40.7	13.9	22.4	5.0	17.0
NEW YORK	--		21.1	13.3	50.6	8.7	6.4
NORTH CAROLINA	0.0		23.6	17.8	44.2	7.2	7.3
NORTH DAKOTA	0.2		28.7	27.9	16.5	7.7	19.1
OHIO	0.1		31.4	15.8	39.5	4.3	9.0
OKLAHOMA	--		25.1	12.9	35.6	4.2	22.3
OREGON	0.0		--	13.4	68.8	5.6	12.2
PENNSYLVANIA	0.7		30.6	16.4	29.2	7.6	15.5
RHODE ISLAND	0.1		29.5	18.9	41.2	3.9	6.4
SOUTH CAROLINA	0.2		38.1	12.9	36.7	3.8	8.4
SOUTH DAKOTA	--		53.1	26.2	--	4.6	16.1
TENNESSEE	--		57.6	18.5	2.3	8.7	13.0
TEXAS	--		50.6	30.1	--	--	19.3
UTAH	--		36.9	12.0	39.8	5.6	5.7
VERMONT	1.0		20.3	24.0	38.2	4.8	11.7
VIRGINIA	0.2		21.1	16.0	51.3	4.2	7.2
WASHINGTON	17.3		58.5	15.0	--	--	9.1
WEST VIRGINIA	0.1		28.4	23.3	28.8	7.4	12.1
WISCONSIN	0.7		27.3	13.8	45.3	6.1	6.8
WYOMING	11.6		39.2	7.9	--	--	41.4

US Totals	2.2		32.9	15.0	33.9	6.5	9.4

U.S. Bureau of the Census.

organizations must collect sales tax if they have nexus[25] within the state. They then submit the collections to the state. If there is no established nexus, the marketing organization does not have to collect the tax, and the purchaser must pay use tax. Not many purchasers comply with the law and knowing who they are so that the department can collect from them is difficult. This problem is receiving national attention and committee has been formed at the Federal level to find a nationwide solution.

TABLE 5I

			FY 1998 Total Sales Tax Distributions
	States Portion	Local Portion	Optional 1%	Optional 1%	Lodging Tax	Total
	Of 4%	Of 4%	General Purpose	Special Purpose	Distributions

FY 1998	236,520,706.49	91,059,197.44	67,140,145.25	14,717,354.36	2,630,785.70	412,068,189.24

FY 1998	Collections attributed to Tourism			51,812,000.00
	% Of Total Sales Taxes attributed to Tourism.			12.57%

Tax Distributions

Table 5J

	SALES / USE TAX COLLECTIONS BY COUNTY
		4% Statewide

			%
County		FY 1998	of Total
Albany		13,943,128.70	4.25%
Big Horn		5,354,646.33	1.63%
Campbell		34,472,711.11	10.52%
Carbon		10,809,870.77	3.30%
Converse		6,971,833.30	2.13%
Crook		2,830,993.41	0.86%
Fremont		18,918,878.12	5.77%
Goshen		4,830,907.17	1.47%
Hot Springs		2,606,601.12	0.80%
Johnson		3,476,736.73	1.06%
Laramie		41,079,633.78	12.53%
Lincoln		8,837,108.60	2.70%
Natrona		42,824,515.84	13.06%
Niobrara		1,010,311.71	0.31%
Park		17,121,120.40	5.22%
Platte		5,339,476.96	1.63%
Sheridan		12,170,013.16	3.71%
Sublette		7,768,397.27	2.37%
Sweetwater		40,028,193.28	12.21%
Teton		25,386,094.08	7.74%
Uinta		13,295,169.84	4.06%
Washakie		5,802,927.14	1.77%
Weston		2,925,109.48	0.89%
Total		327,804,378.30

Table 5K, page 24 shows the distributions of the statewide sales tax and the local option taxes to the counties for FY1998.

TABLE 5K

		SALES / USE TAX DISTRIBUTIONS BY COUNTY
				Fiscal Year 1998

		4% Statewide		1% General		1% Special	Lodging
		Sales Tax		Purpose Tax		Purpose Tax	Tax	Total
Albany	3,873,225.83		3,378,353.67		3,422,852.27		153,578.36		10,828,010.13
Big Horn	1,491,617.21		1,523,634.89		0.00		18,398.95	C	3,033,651.05
Campbell	9,592,175.56		8,500,900.34		0.00		128,349.47	F	18,221,425.37
Carbon	2,981,821.96		2,659,859.44		722,854.36		158,654.74		6,523,190.50
Converse	1,928,350.43		1,702,839.87		0.00		45,439.39		3,676,629.69
Crook	798,034.17		688,561.15		0.00		28,181.89		1,514,777.21
Fremont	5,234,245.72		0.00		10,154.37		135,291.75		5,379,691.84
Goshen	1,364,284.14		0.00		1,178,356.39		30,975.90		2,573,616.43
Hot Springs	719,210.22		731,868.55		0.00		47,838.55		1,498,917.32
Johnson	956,946.06		852,494.88		0.00		61,755.51		1,871,196.45
Laramie	11,450,013.13		9,966,363.02		23,902.39		314,532.77		21,754,811.31
Lincoln	2,480,687.48		2,188,920.46		1,711.76		10,672.35	D	4,681,992.05
Natrona	11,803,814.73		10,549,368.43		0.00		244,579.65		22,597,762.81
Niobrara	280,977.67		245,702.74		256,247.19		16,205.03	E	799,132.63
Park	4,768,069.52		0.00		0.00		738,013.90		5,506,083.42
Platte	1,515,402.90		1,298,391.02		0.00		5,056.58	B	2,818,850.50
Sheridan	3,390,515.20		2,956,220.51		2,973,367.77		125,149.85	A	9,445,253.33
Sublette	2,143,854.13		0.00		0.00				2,143,854.13
Sweetwater	11,102,080.47		9,790,434.39		0.00		232,425.32		21,124,940.18
Teton	7,028,484.63		6,121,489.91		6,127,907.86		0.00		19,277,882.40
Uinta	3,687,194.05		3,274,854.59		0.00		88,497.85	G	7,050,546.49
Washakie	1,643,111.34		0.00		0.00		25,088.56		1,668,199.90
Weston	824,810.89		709,887.39		0.00		22,099.33		1,556,797.61


(a) Lodging tax distributed to the city of Sheridan, only.
(b) Lodging tax distributed to the town of Guernsey, only.
(c) Lodging tax distributed to the towns of Greybull and Lovell, only
(d) Lodging tax distributed to the towns of Afton and Cokeville, only
(e) Lodging tax is distributed to the town of Lusk, only.
(f) Lodging tax is distributed to the City of Gillette, only
(g) Lodging tax is distributed to the City of Evanston, only

Tax Revenue Comparison - 1995/1996
Wyoming Compared to Surrounding States									Wyoming	Colorado	Utah	Idaho	Montana	South Dakota	Nebraska
								Asset Taxes	61.97%	33.70%	25.51%	29.52%	55.46%	46.20%	64.18%
	Wyoming	Colorado	Utah	Idaho	Montana	South Dakota	Nebraska	Income Taxes	0.00%	27.33%	31.18%	33.33%	28.06%	2.80%	14.50%
Asset Taxes								Consumption Taxes	38.03%	38.97%	43.31%	37.15%	16.48%	51.00%	21.33%
Property Tax	435,421,000	2,840,547,000	1,008,092,000	651,733,000	775,828,000	557,761,000	4,181,433,000
Severance Tax	229,444,428	30,274,345	21,400,000	800,000	60,208,207	7,086,936	2,132,838
Intangibles Tax
Corporate Franchise	3,000,000
Real Estate Transfer
Estate/Inheritance Tax	4,559,572	34,630,793			15,404,110	22,235,799	12,957,588
Motor Vehicles	49,401,000	153,281,000	46,964,000	63,084,000	55,443,000	43,118,000	84,019,000
Total Asset Taxes	721,826,000	3,058,733,138	1,076,456,000	715,617,000	906,883,317	630,201,735	4,280,542,426

Income Tax
Dividends and Interest
Corporate Income		205,700,000	176,781,000	152,735,000	75,762,000	38,099,000	126,801,000
Business Profits
Corporate Franchise
Individual Income		2,274,401,000	1,139,080,000	655,163,000	383,092,000	136,000	840,210,000
Total Income Taxes	-	2,480,101,000	1,315,861,000	807,898,000	458,854,000	38,235,000	967,011,000

Consumption Taxes
Sales/Gross Receipts	370,272,000	2,610,399,000	1,417,562,000	598,804,000	-	504,414,000	957,911,000
Selective Sales Tax	72,743,000	925,787,926	409,908,000	301,601,000	269,478,000	191,334,000	464,526,745
Total Consumption Taxes	443,015,000	3,536,186,926	1,827,470,000	900,405,000	269,478,000	695,748,000	1,422,437,745

Total Tax Income	1,164,841,000	9,075,021,064	4,219,787,000	2,423,920,000	1,635,215,317	1,364,184,735	6,669,991,171

Tax Revenue Comparison - 1995/1996
Wyoming Compared to Mineral Producting States

	Wyoming	Alaska	Colorado	Kentucky	Louisiana	Montana	New Mexico	North Dakota	Oklahoma	Texas	Utah	West Virginia
Asset Taxes
Property Tax	435,421,000	680,212,000	2,840,547,000	1,410,855,000	1,358,570,000	775,828,000	473,620,000	412,478,000	1,013,876,000	15,247,508,000	1,008,092,000	726,765,000
Severance Tax	229,444,428	1,018,206,989	30,274,345	168,745,701	349,069,000	60,208,207	183,900,000	50,650,000	315,549,773	824,076,948	21,400,000	180,238,000
Intangibles Tax
Corporate Franchise	3,000,000				233,516,000			1,417,000	36,264,543			82,197,000
Real Estate Transfer									67,881,873
Estate/Inheritance Tax	4,559,572	1,658,011	34,630,793	81,441,427	58,307,000	15,404,110	13,200,000		6,604,369	160,143,199
Motor Vehicles	49,401,000	35,901,000	153,281,000	183,868,000	99,868,000	55,443,000	119,648,000	38,095,000	521,391,000	988,998,000	46,964,000	77,411,000
Total Asset Taxes	721,826,000	1,735,978,000	3,058,733,138	1,844,910,128	2,099,330,000	906,883,317	790,368,000	502,640,000	1,961,567,558	17,220,726,147	1,076,456,000	1,066,611,000

Income Tax
Dividends and Interest
Corporate Income		326,270,000	205,700,000	284,733,000	327,543,000	75,762,000	163,402,000	74,299,000	163,734,000		176,781,000	235,123,000
Business Profits
Corporate Franchise										1,639,015,429
Individual Income			2,274,401,000	2,551,688,000	1,160,262,000	383,092,000	643,024,000	151,592,000	1,512,410,000		1,139,080,000	750,889,000
Total Income Taxes	-	326,270,000	2,480,101,000	2,836,421,000	1,487,805,000	458,854,000	806,426,000	225,891,000	1,676,144,000	1,639,015,429	1,315,861,000	986,012,000

Consumption Taxes
Sales/Gross Receipts	370,272,000	108,820,000	2,610,399,000	1,784,031,000	3,550,146,000	-	1,586,215,000	312,341,000	2,023,406,000	13,898,855,661	1,417,562,000	797,289,000
Selective Sales Tax	72,743,000	130,294,000	925,787,926	1,463,273,049	1,094,283,000	269,478,000	540,429,000	303,722,000	738,293,000	7,490,591,000	409,908,000	761,781,000
Total Consumption Taxes	443,015,000	239,114,000	3,536,186,926	3,247,304,049	4,644,429,000	269,478,000	2,126,644,000	616,063,000	2,761,699,000	21,389,446,661	1,827,470,000	1,559,070,000

Total Tax Income	1,164,841,000	2,301,362,000	9,075,021,064	7,928,635,177	8,231,564,000	1,635,215,317	3,723,438,000	1,344,594,000	6,399,410,558	40,249,188,237	4,219,787,000	3,611,693,000



		LOW TAX BURDEN






State and Local Government Direct General Expenditures Per Capita - 1995-1996
*Wyoming compared to States with large disbursement of Population*

State	1995	Rank	Square	Rank	Population	Rank	Expenditures	Rank
	Estimated		Miles		Per Square		Per Capita
	Population				Mile		1995-1996

Wyoming	478,364	50	97,104	9	4.92	49	5,462.00	5
Alaska	601,581	48	570,373	1	1.08	50	10,353.00	1
North Dakota	641,374	47	68,994	17	9.25	47	4,314.00	18
South Dakota	734,533	45	75,896	16	9.73	46	3,864.00	38
Montana	868,478	44	145,556	4	6.05	48	4,063.00	29
Idaho	1,163,542	41	82,751	12	14.85	43	3,729.00	42
Nevada	1,528,363	38	109,805	7	15.91	44	4,206.00	22
Nebraska	1,635,414	37	76,877	15	21.63	42	4,058.00	30
New Mexico	1,683,773	36	121,364	5	14.31	45	4,374.00	16
Utah	1,991,495	34	82,768	11	25.37	41	3,927.00	35

The committee used this questionnaire during their public speaking engagements. The purpose of the questionnaire was to inform state’s residents of the public services provided by governments in Wyoming and their associated costs. The questionnaire also included a menu of tax options that may be considered by the state legislature to help solve the projected budget deficit for the 2001-2002 biennium. Committee members asked their audiences to keep the questionnaire and use it as a reference when the legislature meets in the budget session in February 2000.

Tax Reform 2000

Questions for Discussion

1. In Wyoming, there are approximately 386 units of government exercising taxing authority: 1 state government, 23 county governments, 97 municipalities, 49 school districts, 7 community colleges, and 212 special districts. Each of these units of government is responsible for providing services to taxpayers in return for their taxing authority. The following services are provided at the state, county and municipal levels. How do you feel you benefit from them?

GOVERNMENT SERVICES

		No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Education		o	o	o	o	o	o

	Costs of Education 1995-1996:		State	*Local	State and Local	Total Expenditure
	Higher education- Per Student **		8,030.28	4,065.51	12,095.79	$276,425,000.
	(University of Wyoming and Community Colleges)
	Elementary & secondary education – Per Student**		0.18	6,623.59	6,623.77	$653,336,000
	Other education – Per Capita*		81.86	-	81.86	$39,375,000
	(Services for handicapped, adult and vocational education)
	Libraries ( State, County and Branch Public Libraries) Per Capita		3.85	20.51	24.36	$11,718,000

		No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Health Services		o	o	o	o	o	o

			State	*Local	State and Local	Total Expenditure
	Cost of Health Services – Per Capita 1995-1996:		185.31	601.38	786.69	39,350,000
	State: State hospitals, health inspections, disease control, senior citizen services, substance abuse & mental health services, developmental disabilities, Women’s, Infant & Children’s program (WIC), health care finance
	Counties and Cities/Towns: Hospitals and hospital districts, health inspections, disease control, senior citizen services, substance abuse & mental health services, community health services, developmental disabilities, Women’s, Infant & Children’s program (WIC).

		No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Social Services		o	o	o	o	o	o

			State	*Local	State and Local	Total Expenditure
	Cost of Social Services – Per Capita 1995-1996:		548.68	46.74	595.42	256,160,000
	State: Family services, Medicaid, child support enforcement, juvenile services
	County and Cities/Towns: Food and clothing banks, emergency aid, senior citizen services

		No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Transportation Services		o	o	o	o	o	o

			State	*Local	State and Local	Total Expenditure
	Cost of Transportation – Per Capita 1995-1996		508.73	146.36	655.10	315,101,000
	State: State highways, airports, drivers licenses, highway safety, motor vehicle registration, engineering, fuel tax administration.
	County: County roads and bridges, airports, parking facilities, road safety, motor vehicle registration, engineering
	Cities/Towns: City/Town streets and bridges, airports, street safety, engineering, parking facilities

	No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Public Safety Services	o	o	o	o	o	o

		State	*Local	State and Local	Total Expenditure
Cost of Public Safety – Per Capita 1995-1996		20.67	187.67	208.34	100,211,000
State: Highway Patrol, Law Enforcement Academy, Emergency Management
County; Sheriff Departments, Emergency Management, County Fire Departments and Fire Districts, Search and Rescue, Coroners
Cities/Towns: Police, Fire Departments, Animal and Pest Control

	No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Correction Services	o	o	o	o	o	o

		State	*Local	State and Local	Total Expenditure
Cost of Corrections – Per Capita 1995-1996		65.08	43.69	108.77	52,317,000
State: State Men and Women’s prisons, Boys and Girls Schools, Honor Farms
County and Cities/Towns: County and Municipal Jails, Juvenile facilities

	No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Protective Inspection and Regulation Services	o	o	o	o	o	o

		State	*Local	State and Local	Total Expenditure
Protective Inspection and Regulation – Per Capita 1995-96		20.70	7.67	28.37	13,646,000
State: Public safety inspections and engineering; regulation of financial and security Institutions, public service corporations, corporations, insurance companies, private utilities; licensing, examination and regulation of professional occupations; inspection of working conditions.
Counties and Cities/Towns: Public safety inspections and engineering, municipal public services franchises.

	No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Natural Resources Services	o	o	o	o	o	o

		State	*Local	State and Local	Total Expenditure
Natural Resources – Per Capita		179.45	98.01	277.46	133,456,000
State: Air, Land, Water Quality, Solid & Hazardous Waste Management, Industrial Siting, Game and Fish Services, Agricultural Services (Seed and veterinary labs, meat inspections, State Fair, State weed and pest services)
County and Cities/Towns: County Fairs, Weed and Pest Districts, Conservation Districts
	No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Park and Recreation Services	o	o	o	o	o	o

		State	*Local	State and Local	Total Expenditure
Parks and Recreation – Per Capita 1995-1996		27.72	64.92	92.65	44,563,000
State State parks, camping areas, boating facilities, trail maintenance, tourist information facilities.,
Counties and Cities/Towns: Parks, camping areas, boating facilities, trail maintenance, ski areas, tennis courts, swimming pools, golf courses, events centers, museums, auditoriums, convention centers, sporting fields, recreation centers.

	No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Housing and Community Development	o	o	o	o	o	o
Services
		State	*Local	State and Local	Total Expenditure
Housing and Community Development – Per Capita 1995/96		14.98	11.06	26.03	12,522,000
State: Public housing projects, rent subsidies, housing and mortgage finance agencies, repair and renovation of existing homes.
Counties and Cities/Towns: Public housing projects, rent subsidies, repair and renovation of existing homes, rural and
urban development, planning & zoning

	No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Financial Administration Services	o	o	o	o	o	o

		State	*Local	State and Local	Total Expenditure
Financial Administration – Per Capita 1995/1996		70.40	45.74	116.14	55,864,000
State: State Treasurer, State Auditor, State Departments of Revenue and Audit, budgeting and accounting agencies.
Counties and Cities/Towns: Country Treasurers, Cities/Towns Clerk-Treasurers, County Assessors, budgeting and accounting agencies
	No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Judicial and Legal Services	o	o	o	o	o	o

		State	*Local	State and Local	Total Expenditure
Judicial and Legal- Per Capita 1995-1996		50.43	35.65	86.08	41,406,000
State: Supreme Court, District Courts, County Courts, Public Defenders, State Law Library, Victim Services, State Attorney General Office.
Counties and Cities/Towns: County, Municipal and District Attorneys; County, District and Municipal courts; Clerks of District Courts, victim services, law libraries.

	No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
General Public Facilities	o	o	o	o	o	o

		State	*Local	State and Local	Total Expenditure
General Public Facilities - Per Capita 1995-1996		11.93	26.82	38.75	18,638,000
State: Construction, equipping, maintenance and operation of general public buildings not related to specific functions or agencies; administration of State public lands.
Counties and Cities/Towns: Court houses, city halls, multi-purpose office buildings, cemeteries

	No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
General Government Management	o	o	o	o	o	o

		State	*Local	State and Local	Total Expenditure
General Government Management – Per Capita 1995/1996		25.06	101.90	126.95	61,065,000
State: Governor’s Office, Secretary of State, State Legislature
Counties: County Commissioners, County Administrators
Cities/Towns: City/Town Councils, City Managers

	No Benefit	Very Low Benefit	Low Benefit	Moderate Benefit	High Benefit	Very High Benefit
Other and Unallocable	o	o	o	o	o	o

		State	*Local	State and Local	Total Expenditure
Other and unallocable- Per Capita 1995-1996		19.30	117.61	136.91	65,855,000
State: National Guard, premiums paid for insurance on government facilities, State Department of Administration and Information, central service agencies (purchasing, motor pools, personnel), purchase of computer equipment, economic development programs, job services.
Counties and Cities/Towns: Premiums paid on insurance on government facilities, central service agencies, purchase of computer equipment, economic development programs, programs for senior citizens not based on need.

*Local - Includes counties, cities/towns and special districts.
* Per Capita:	Wyoming 1995-96 Estimated Population -	481,000
**Per Student:	K-12 Students -	98,635
	Higher Education Students -	22,853

2. Wyoming generates its tax revenues from a combination of taxes on consumption, assets, and mineral production. The following taxes are utilized by the state of Wyoming to pay for the services required by the residents. Please state your opinion on increases in these taxes.

TAX	Amount Generated	No Increase	Amount of Increase	No Opinion
Statewide Sales Tax Increase – Currently the State levies a 4 cent sales tax and local governments can levy up to 2 cent optional sales taxes.	$ 80 million per one cent statewide sales tax increase	o	1 2 3 Cents	o
Statewide Property Tax Mill Levy – Currently all mill levies are levied by local governments (cities, counties, school districts and special districts). The State can levy up to 4 Mill levies but presently does not.	$ 7.1 million per statewide mill levy	o	1 2 3 4 Mills	o
Increase the Gas and Diesel Fuel Tax – Currently the tax rate is 14 cents per gallon. Revenue from gas taxes must be used for transportation purposes and is distributed to State and local governments.	$ 5.8 million per one cent increase	o	1 2 3 4 5 Cents	o
TAX	Amount Generated	No Increase	Amount of Increase	No Opinion
Increase Liquor Taxes ( Current Tax) Beer – 2 cents per gallon Wine – 28 cents per gallon Spirits – 94 cents per gallon Wine and Spirits generate $4.9 million in profits from the State wholesale operation. Revenue from all liquor taxes and wholesale operation go to the State general fund	Increase Generates: Each one cent-$100,000 Dollars Each 15 cents – $100,000 Dollars Each 25 cents – $175,000 Dollars	o o o	1 5 10 15 Cents 15 30 45 Cents 25 50 75 Cents	o o o
Increase Cigarette Taxes Current tax is twelve cents per pack plus sales tax. Revenue from this tax is distributed between State and Local governments.	Each one cent increase: $ 1 million	o	1 2 3 4 5 Cents	o
Increase the percentage rate applied to market valuation to determine taxable value for residential, commercial and agricultural property – the current rate is 9.5%	Each one percent increase generates $ 14.9 million	o	1 2 3 Percent	o
Increase the percentage rate applied to market valuation to determine taxable value for industrial property – the current rate is 11.5%	Each on percent increase generates $ 9.2 million	o	1 2 3 Percent	o
Increase the Mineral Severance Tax. Rates on minerals differ by mineral. Revenues are distributed to State and local governments and the mineral trust funds.	Increase will vary by mineral, market price of mineral and production of mineral.	o	Research possible increases o	o

3. Wyoming does not require sales tax to be collected on certain items. Additional sales taxes can be generated by removing exemptions and/or assessing sales tax on many services currently not taxed. Examples of these are listed below, how would you feel about extending the sales tax to these services?

Service	Estimated Tax Revenue	Extend Sales Tax	Service	Estimated Tax Revenue	Extend Sales Tax
Recreational Participation Fees (Golf, Skiing, Rafting, Health Clubs)	4.7 million	o	Business Services (Examples)
Cable & Satellite TV	1.4 million	o	Credit Reporting	0.4 million	o
Professional Services ( Examples)			Pest Control Services	0.016 million	o
Attorneys	5.2 million	o	Building Maintenance	0.14 million	o
Accountants /Bookeepings	3.1 million	o	Employment Agencies	0.45 million	o
Architects & Engineers	6.3 million	o	Computer Programming	1.45 million	o
Stock Brokerage Fees	1.9 million	o	Security Services	0.47 million	o
Veterinarians	2.1 million	o	Agricultural Services	2.0 million	o
Management & P. Relations	3.9 million	o	Household Services (Examples)
Real Estate Agent Fees	1.57 million	o	Cleaning & Lawn Care (included with business services)		o
Personal Services ( Examples)			Paint, Wallpaper, Carpet Install	0.77 million	o
Beauty Services	2.5 million	o	Other – Please Specify		o
Miscellaneous Personal Svcs.	0.96 million	o	Other – Please Specify		o
Funeral Services	0.7 million	o	Other – Please Specify		o
Banking & Title Services	13.4 million	o	Other – Please Specify		o
Travel Agent Fees	.96 million	o	Other – Please Specify		o

4. Several options exist to broaden Wyoming’s tax base. The following recommendations have been made to the Tax Reform 2000 Committee. What is your opinion of these possible additional tax sources?

Tax Option	Tax Not Acceptable	No Opinion	Preference Level 1-low/4high
Individual Income Tax	o	o	1 2 3 4
Corporate Income Tax	o	o	1 2 3 4
Storage of Spent Nuclear Fuel Rods	o	o	1 2 3 4
Real Estate Transfer Tax	o	o	1 2 3 4
Gross Receipts Tax on Business	o	o	1 2 3 4
State Lottery	o	o	1 2 3 4
Other Gambling	o	o	1 2 3 4
Employment Head Tax ($25 per employee per quarter paid by both employee & employer)	o	o	1 2 3 4
Corporate Franchise Tax (based on income rather than assets)	o	o	1 2 3 4
Intangible Tax on Financial Assets(Investments, Accounts Receivables, Loans)	o	o	1 2 3 4

ECONOMIC IMPACT
Susan Bigelow representing WEDA

Testimony to the

Tax Reform 2000 Committee

April 23, 1998

10:30 AM

Casper, WY

Good morning, Chairman Hines and Committee Members. Thank you for asking for input from the economic development professionals in the State of Wyoming. It is my pleasure to testify before this committee today. I personally believe tax reform is the most critical component to successfully turning around the economy of Wyoming. I admire you for taking on the daunting task of reviewing the current tax structure and recommending a new tax structure for Wyoming.

WEDA members have often heard my views on this topic and asked me to represent them anyway. I will try to let you know today when I am speaking for WEDA members and when I am giving my personal opinion.

I am not a tax expert or an economist. I am, however, a taxpayer. I moved to Wyoming in 1995, living previously in south Dakota and before that California – and before that Wyoming. I knew in South Dakota that I was a taxpayer because of the property taxes. I knew in California because of the 11 percent of my income that I paid in income tax.

I read with interest Dr. Gerking’s report in 1996 titled Income, Revenue from Personal Taxes, and Public Service Costs in Wyoming. With no income tax and property tax on our home under $1,000 I recognized already that I had become a “kept woman” when we moved to Wyoming. Dr. Gerking’s report confirmed what we already knew. The extractive industries pay for the services that we as residents enjoy. According to the report, in Campbell County we enjoy even more of those services.

The tax structure that I may enjoy as a resident also has an impact on the economic development efforts in Wyoming – both on success of those efforts and support of the goals.

The question asked of the economic development profession was:

“How does Wyoming’s tax structure and taxes affect Economic Development efforts?”

My testimony today reflects an unscientific survey of the current Wyoming Economic Development Association members. I am sure the Wyoming Business Council and WEDA will be glad to conduct a more extensive survey and provide a more complete response for the Tax Reform Committee in the future.

I received many answers from economic developers. Some of them contradict others. The fact that all economic developers in the state don’t agree even on this issue shouldn’t be a surprise to legislators or committee members.

Their responses include:

1. It is the State’s regulatory environment, not taxes, that is our greatest government induced impediment to new business.

2. The tax structure is a good “foot in the door”, but seldom has been a compelling reason for a business to relocate.

3. Tax structure of the state is not the only reason a business will choose to locate it’s operation in Wyoming. but, it is an influencing factor in the overall determination. If that was the only criteria business used we should have a much larger population and new businesses arriving on a daily basis.

4. The current lopsided structure creates an uncertainty of what may happen in the future. The companies may have figured in their planning for expansion or relocation a low tax rate. A drastic change in the tax structure changes their economic well-being.

5. No income tax, no inventory tax, etc. doesn’t seem to be the right incentive for businesses who my be looking for a substantial commitment from a community or from the state. Somehow the lack of taxes doesn’t compute as money in their pocket like a grant, or land, or low interest loan.

6. No corporate or personal income tax is a positive attraction for business to the state.

7. Personal and/or corporate income tax are not necessarily detrimental to attracting economic development. Realization and the quantification of income tax needs might be the biggest single attraction to economic development, since the mystery of Wyoming economics would begin to disappear.

8. A large sales or use tax payment early in the project for a capital intensive business is a hindrance. State should consider if the new plant and equipment is going to be taxed later to forgive sales and use taxes. ( South Dakota has addressed this by forgiving use tax on construction projects which exceed a certain dollar amount – I think it is $30 million. When this measure passed – maybe 994 – there were two planned projects that qualified – Dunbar Resort in Deadwood and an Ethanol Plant.)

9. Present structure is good for small business and entrepreneurs.

10. Minerals currently pay the lion’s share of the taxes, therefore, they hesitate to want economic development because they end up paying for it.

11. Current structure looks unstable to out of state businesses, and if they come to Wyoming, this may change and then they would end up paying more than they plan for.

12. Businesses usually don’t come for the tax structure, it is because of the quality of life.

13. Industry bears the burden of the tax structure.

14. Serious analysis of the tax structure is needed to recruit businesses because of the inequity with minerals paying the most in the current structure. The system needs to be balanced.

15. Most people oppose a state income tax, but believe sales tax is the best way to look at making it fair to everyone.

16. Tax on groceries and health (care) should be looked at being exempt.

17. Eliminating sales tax on the essentials of food and clothing and possibly other necessities) would allow a more focused sales tax that could be increased substantially without penalizing the poorer people in the state.

18. A graduated progressive/aggressive sales tax with appropriate exemptions on necessities in place would be palatable and provide a new source of funding for the types of infrastructure any economic development would and does require.

19. The Division of Economic and Community Development has a banner they use at trade shows: Wyoming . . . .Incentive Enough. Obviously, for business relocations and expansions - - Wyoming has not been incentive enough. Wyoming has had a very low tax rate for business - other than minerals. States with higher tax rates offer tax breaks for new or expanding businesses. This is a Catch 22. A state has to tax a company at a substantial rate in order for a tax break to be noticeable and appreciated. However, if a tax break is extended early in a company’s operation it can help lower the initial costs of relocation or expansion. The opportunity is there, under a different tax structure, to show over time that the business, even with the early tax break, is paying for their public services.

20. One of the criticisms that I hear is the economic development efforts do not bring in tax base to Wyoming. I claim that we bring a tax base – Wyoming has chose to not tax it.

From my corner of the state, there is opposition to economic development – or to any growth at all – by some people in a declining industry that pays high tax rates under the current system, namely, minerals.

Governor Geringer visited Gillette during his “Define and Design Wyoming” tour. The message from community representatives was clear – we would support economic development – if it is accompanied by tax reform – a more fair spreading of the taxes over the economic base.

We want to be successful in economic development – the growth of industry within the state – whether from existing businesses, new start-ups, or new businesses in the state. Not all industries are compatible with all regions of the state. In my opinion, the current tax structure is a burden to industries that are clustered in a few regions of the state and is not “incentive enough” for business growth in the state.

I believe most of the state sees minerals as a windfall for tax revenue. Minerals is an industry that supplies the best employment in Campbell County and some other counties in the state. It is an industry that is struggling to remain profitable.

A statement made in the 1996 STEA commissioned study sums up the challenge: A mineral producer’s decision to locate facilities in a particular area, and its decision on the amount of oil, gas or coal to produce, will be affected by the tax structure in that location relative to other potential locations. Hence, tax burdens can be a key determinant of a location’s competitiveness in attracting and retaining minerals producers. An observation of this study was that Wyoming has among the highest total state tax and royalties burden of all states, for oil, gas, and coal production. For a tax structure to be good for Wyoming – it needs to be good for all industrial sectors – mining, agriculture, manufacturing.

Should it be better for one sector than for another? Probably not.

How good does it have to be? Good enough to be competitive with the other location choices. Good enough to retain and support a business base. Good enough to grow and attract a diversified business base.

In summary, the tax structure is a factor in marketing a state for business attraction – so are availability of workforce, skills and labor costs, access to training, developed land and buildings, appropriate infrastructure such as rail access, interstate, air service, and telecommunications, utility availability and cost, access to raw materials and to the market. I can’t forget what we market most and what probably has the least impact in the final decision – quality of life. Regulatory climate and tax structure play a part – but they are part of a larger picture.

A tax structure that is fair to all residents and business will also support successful business attraction and growth – will support our economic development efforts.

I wish you well in developing a fair tax structure that will see Wyoming successfully in the next millenium.

[1] Take in kind means the event when an election is made by an interest owner under a lease or joint operating agreement, with notice to the affected parties, to separately market or dispose of crude oil, natural gas or natural gas products. An interest owner must affirmatively exercise an option under a lease or operating agreement to separately market his share of the production to qualify as take in kind.

[2] The 10.5 percent coal severance tax was distributed in the following manner: 2.5 percent PWMTF, 1.5 percent Wyoming Department of Transportation, 1 percent State Highways, 2 percent General Fund, 1.5 percent Capital Facilities Tax, 2.0 percent Coal Impact Tax Fee. Source: Marion Loomis, Executive Director, Wyoming Mining Association, May 27, 1998, Gillette, Wyoming.

[3] The Wyoming Constitution Article 15, Section 16 requires all monies raised from fuel taxes to be used on the State roads and highways. The money distributed from severance taxes to the Leaking Underground Storage Tank (LUST) fund is offset by the one (1) cent LUST tax collected in the gasoline and fuel tax.

[4] Published by the Wyoming Taxpayer’s Association in the WTA Fiscal Researcher, April 23, 1998, p.4

[5] Published by the Wyoming Taxpayer’s Association in the WTA Fiscal Researcher, April 23, 1998, p.3.

[6] The definition of sales price by Wyoming § 39-15-101 (a)(vi) is the consideration paid by the purchaser of tangible personal property excluding the actual trade-in value allowed on tangible personal property exchanged at the time of transaction, admissions or services which are subject to taxation as provided by this article and excluding any taxes imposed by the federal government or this article.

[7] Published by the Wyoming Taxpayer’s Association in the WTA Fiscal Researcher, April 23, 1998, p.5.

[8] Griffenhage & Associates, Report Made to the Special Legislative Committee on Organization and Revenue, 1933, p. 566.

[9] Lodging service means the provision of sleeping accommodations to transient guests and shall include the providing of sites for the placement of tents, campers, trailers, mobile homes or other mobile sleeping accommodations for transient guests. Wyoming § 39-15-101(a)(i).

[10] A transient guest is a guest who remains for less than 30 continuous days. Wyoming § 39-15-101(a)(xi).

[11] One percent rate - $500,000.00 in collections for the previous 3 years, 2 percent rate-$1,000,000.00 in collections for the previous 3 years, 2 percent rate-$1,500,000.00 in collections for the previous 3 years, 2 percent rate-$2,000,000.00 in collections for the previous 3 years.

[12] Data from the U.S. Department of Commerce, Census Bureau and published by the Federation of Tax Administrators, 444 north Capitol Street, N.W., Washington, D.C. 20001. Information was obtained from the website of the Federal Tax Administrators, www.taxadmin.org.

[13] Data from the U.S. Department of Commerce, Census Bureau and published by the Federation of Tax Administrators, 444 north Capitol Street, N.W., Washington, D.C. 20001. Information was obtained from the website of the Federal Tax Administrators, www.taxadmin.org.

[14] Nexus is a legal term meaning having sufficient “contacts” within a state to be subject to that state’s taxing jurisdiction. It is well established that if a business located in State A has more than de minimis amount of its property located in State B, or its employees regularly enter State B to conduct business, State B has taxing jurisdiction over the company… The ambiguity surrounding the existence of nexus generally arises when a business is making sales or earning a profit without any direct physical presence, e.g., by licensing a trademark in exchange for royalties or through the physical presence of third parties who may or may not be considered its agent.

Many state officials believe that a “physical presence” standard for establishing nexus is to limited in a world in which an increasing number of services can be provided via telecommunications and would prefer a much broader standard under which nexus would exist whenever a business purposefully take advantage of a profit-making opportunity in a state. Snell, Ronald, Financing State Government in the 1990’s, National Conference of State Legislatures, National Governors’ Association, December, 1993, pp 109-110.

[15] Published by the Wyoming Taxpayer’s Association in the WTA Fiscal Researcher, April 23, 1998, p.4

[16] Published by the Wyoming Taxpayer’s Association in the WTA Fiscal Researcher, April 23, 1998, p.3.

[17] The definition of sales price by Wyoming § 39-15-101 (a)(vi) is the consideration paid by the purchaser of tangible personal property excluding the actual trade-in value allowed on tangible personal property exchanged at the time of transaction, admissions or services which are subject to taxation as provided by this article and excluding any taxes imposed by the federal government or this article.

[18] Published by the Wyoming Taxpayer’s Association in the WTA Fiscal Researcher, April 23, 1998, p.5.

[19] Griffenhage & Associates, Report Made to the Special Legislative Committee on Organization and Revenue, 1933, p. 566.

[20] Lodging service means the provision of sleeping accommodations to transient guests and shall include the providing of sites for the placement of tents, campers, trailers, mobile homes or other mobile sleeping accommodations for transient guests. Wyoming § 39-15-101(a)(i).

[21] A transient guest is a guest who remains for less than 30 continuous days. Wyoming § 39-15-101(a)(xi).

[22] One percent rate - $500,000.00 in collections for the previous 3 years, 2 percent rate-$1,000,000.00 in collections for the previous 3 years, 2 percent rate-$1,500,000.00 in collections for the previous 3 years, 2 percent rate-$2,000,000.00 in collections for the previous 3 years.

[23] Data from the U.S. Department of Commerce, Census Bureau and published by the Federation of Tax Administrators, 444 north Capitol Street, N.W., Washington, D.C. 20001. Information was obtained from the website of the Federal Tax Administrators, www.taxadmin.org.

[24] Data from the U.S. Department of Commerce, Census Bureau and published by the Federation of Tax Administrators, 444 north Capitol Street, N.W., Washington, D.C. 20001. Information was obtained from the website of the Federal Tax Administrators, www.taxadmin.org.

[25] Nexus is a legal term meaning having sufficient “contacts” within a state to be subject to that state’s taxing jurisdiction. It is well established that if a business located in State A has more than de minimis amount of its property located in State B, or its employees regularly enter State B to conduct business, State B has taxing jurisdiction over the company… The ambiguity surrounding the existence of nexus generally arises when a business is making sales or earning a profit without any direct physical presence, e.g., by licensing a trademark in exchange for royalties or through the physical presence of third parties who may or may not be considered its agent.

Trona			Bentonite		Uranium (varies with collections)		Sand & Gravel	All Other Deposits
	Rate (i)	Rate (ii)	Rate (a)	Rate (i)		Rate (ii)	Rate (a)	Rate (a)
	2%	2%	2%	2%		2%	2%	2%
	Prior to 6/30/2000 Budget Reserve Account after which the PWMTF	State General Fund	State General Fund	Prior to 6/30/2000 Budget Reserve Account after which the PWMTF		State General Fund	State General Fund	State General Fund

Coal Severance Taxes- Above Ground Total Tax 7%
Rate(i)	Rate(ii)	Rate(iii)	Rate(iv)	Rate(v)	Rate(vi)
1.5%	.5%	2%	1.5%	1%	.5%
PWMTF	Prior to 6/30/2004 Budget Reserve Account after which the PWMTF	State General Fund	Water Development Fund or State General Fund	(i)1.25% to Capital Const. Account (ii)2.25% to the State-County Road Fund (iii).625% to Counties (iv)Balance to the highway fund	Prior to 6/30/2004 Budget Reserve Account after which the PWMTF

Coal Severance Taxes- Below Ground Total Tax 3.75%
Rate(i)	Rate(ii)	Rate(iii)
1.5%	1.25%	1%
PWMTF	State General Fund	(i)1.25% to Capital Const. Account (ii)2.25% to the State-County Road Fund (iii).625% to Counties (iv)Balance to the highway fund

Oil and Gas Severance Taxes Total Tax 6%
Rate(i)	Rate(ii)	Rate(iii)	Rate(iv)
1.5%	.5%	2%	2%
PWMTF	Prior to 6/30/2000 Budget Reserve Account after which the PWMTF	State General Fund	(i)3/8 to Cities & Towns (ii)1/8 to Counties (iii)1/3 Distributed as follows: (a)An amount equal to that collected in LUST fuel taxes to LUST accounts. (b)An amount to bring the State Park Road account fund to $500,000. (c)Balance to the State Highway Fund (iv)1/12 Prior to 6/30/2000 to the Budget Reserve Account after which the PWMTF (v)1/12 to the Water Development Fund

Year	Severance Tax	Fines &	Interest	Interest to	Balance
	Deposits	Forfeitures	Earnings	General Fund
1974					0.00
1975	9,070,534.		361,804.		9,432,338.
1976	19,790,756.		342,153.	703,957.	28,861,290.
1977	22,845,050.		2,629,994.	2,629,995.	51,706,339.
1978	26,806,289.		3,483,189.	3,483,189.	78,512,628.
1979	36,537,587.		6,716,382.	6,716,382.	115,050,215.
1980	40,680,788.		11,992,118.	11,992,118.	155,731,003.
1981	52,597,909.		24,707,475.	18,408,875.	214,627,512.
1982	128,542,677.	14,426.	26,894,428.	26,121,955.	343,957,088.
1983	127,056,703.	-14,426.	48,723,474.	47,535,826.	472,187,013.
1984	126,052,631.	45,367.	56,170,521.	54,973,937.	599,481,595.
1985	131,436,950.		64,292,994.	67,815,059.	727,396,480.
1986	124,573,235.		70,985,945.	72,356,166.	850,599,494.
1987	62,469,489.		76,365,747.	74,925,726.	914,509,004.
1988	58,617,466.		78,424,035.	72,274,883.	979,275,622.
1989	50,788,173.	84,595.	81,694,739.	72,518,001.	1,039,325,128.
1990	56,348,413.	196,560.	86,123,351.	83,560,274.	1,098,433,178.
1991	59,529,207.	162,091.	93,849,608.	95,106,407.	1,156,867,677.
1992	53,234,067.		86,780,396.	92,724,655.	1,204,157,485.
1993	53,381,267.		94,230,245.	88,342,155.	1,263,426,842.
1994	76,163,898.		86,042,101.	109,095,543.	1,316,537,298.
1995	46,543,901.		85,608,439.	85,608,439.	1,363,081,199.
1996	44,144,890.		86,526,783.	86,526,783.	1,407,226,089.
1997	50,645,427.		92,221,049.	92,221,049.	1,457,871,516.
1998	64,055,864.		101,271,457.	101,271,457.	1,521,927,387.

Year	Oil Stripper	Oil-Collection	Oil- Tertiary	Oil-Other	Gas-Tertiary	Gas- Other	Coal-Strip	Coal-Underground	Trona	Uranium	Other Minerals
1968	1.0%	1.0%	1.0%	1.0%	1.0%	1.0%	1.0%	1.0%	1.0%	1.0%	1.0%
1970	1.0	1.0	1.0	1.0	1.0	1.0	1.0	1.0	1.0	1.0	1.0
1972	1.0	1.0	1.0	1.0	1.0	1.0	1.0	1.0	1.0	1.0	1.0
1973	1.0	3.0	3.0	3.0	3.0	3.0	3.0	3.0	3.0	1.0	1.0
1974	2.0	4.0	4.0	4.0	4.0	4.0	4.4	4.4	4.0	2.0	2.0
1976	2.0	4.0	4.0	4.0	4.0	4.0	9.7	9.7	5.5	5.5	2.0
1978	2.0	4.0	4.0	4.0	4.0	4.0	10.5[2]	10.5	5.5	5.5	2.0
1981	4.0	6.0	6.0	6.0	6.0	6.0	10.5	10.5	5.5	5.5	2.0
1983	4.0	6.0	6.0	6.0	6.0	6.0	10.5	10.5	5.5	5.5	2.0
1984	4.0	6.0	6.0	6.0	6.0	6.0	10.5	7.25	5.5	5.5	2.0
1986	4.0	1.5	4.0	6.0	4.0	6.0	10.5	7.25	5.5	5.5	2.0
1989	4.0	1.5	4.0	6.0	4.0	6.0	8.5	5.25	5.5	2-4%	2.0
1992	4.0	1.5	4.0	6.0	4.0	6.0	8.5	5.25	5.5	0	2.0
1993	4.0	1.5	4.0	6.0	4.0	6.0	7.0	3.75	4.0	0	2.0
1996	4.0	1.5	4.0	6.0	4.0	6.0	7.0	3.75	4.0	0-3%	2.0
1998	4.0	1.5	4.0	6.0(4.0 if oil is under $20. or less a barrel)

TABLE 4I
Severance Tax Distributions
Year	General	PWMTF	Cities, Towns	Budget	Education	Com- pensation	Water	LUST[3]	Wyoming	Capital
	Fund		Counties	Reserve		Reserve	Development	Accounts	Highway	Facilities
							Funds		Fund	Account
1988	66,442,529	58,617,466	23,710,370	2,718,107			18,881,341		25,742,258	16,645,564
1989	65,879,852	50,788,173	23,038,087	28,355,081			19,366,643		23,219,712	17,723,584
1990	75,481,855	56,348,413	26,196,005	31,525,285			19,838,961		21,800,544	18,494,945
1991	81,448,019	59,532,144	28,067,682	33,252,405			20,904,215		23,223,371	19,045,328
1992	70,716,330	53,234,067	22,640,452	31,428,737			24,322,222	2,904,536	21,448,514	21,606,142
1993	67,762,034	53,381,267	23,312,006	44,976,123	10,175,147	1,399,322	20,042,968	6,768,414	9,801,190	19,693,024
1994	66,975,733	51,963,898	22,787,185	39,069,045			19,670,194	6,503,039	18,230,924	0
1995	57,892,926	43,400,425	16,966,251	29,233,577			18,502,473	7,330,216	14,739,195	323,879
1996	64,234,238	48,754,014	18,715,495	29,841,991			20,235,137	5,343,586	17,576,837	121,461
1997	72,707,640	56,747,014	23,450,208	33,499,478			20,810,450	8,584,975	17,382,751	41,474
1998	75,171,024	56,707,432	21,542,519	34,116,785			23,337,660	7,660,595	19,194,741	188,523
Total	764,712,180	613,452,573	250,426,260	338,016,614	10,175,147	1,399,322	225,912,264	45,095,361	212,360,037	113,883,924


	1993	1993	1994	1994	1995	1995	1996	1996	1997	1997	1998	1998
Agriculture	975,892	0.37%	1,138,233	0.34%	1,220,591	0.34%	1,317,191	0.36%	1,300,983	0.34%	1,324,471	.36%
Mining	22,320,141	8.49%	30,636,026	9.12%	32,713,556	9.01%	34,040,507	9.22%	35,515,973	9.41%	27,119,960	7.37%
Construction	8,837,467	3.36%	12,004,811	3.57%	13,484,279	3.71%	13,652,846	3.70%	17,563,331	4.65%	9,681,273	2.63%
Manufacturing	13,604,820	5.18%	18,578,741	5.53%	19,916,064	5.49%	19,480,907	5.27%	18,495,843	4.90%	21,655,071	5.89%
Transportation	24,867,101	9.46%	32,024,884	9.53%	32,241,011	8.88%	32,889,763	8.90%	33,335,274	8.83%	28,456,953	7.73%
Wholesale/ Retail Trade	127,409,505	48.49%	161,645,437	48.10%	173,755,189	47.86%	178,871,071	48.43%	182,457,036	48.34%	196,956,513	53.53%
Finance	880,167	0.33%	1,228,324	0.37%	1,551,259	0.43%	1,717,792	0.47%	1,540,652	0.41%	1,525,230	.42%
Service	30,734,515	11.70%	38,405,786	11.43%	41,433,339	11.41%	42,302,313	11.45%	43,972,643	11.65%	50,997,674	13.86%
Public Administration	33,139,940	12.61%	40,366,355	12.01%	46,725,415	12.87%	45,071,658	12.20%	43,280,989	11.47%	30,235,742	8.22%

Total	262,769,548	100.00%	336,028,597	100.00%	363,040,703	100.00%	369,344,048	100.00%	377,462,724	100.00%	367,957,887	100.00%

MINERAL TAXES

Statutory Background and Basis of Property Valuation

Coal

Trona

Bentonite

Uranium

Sand and Gravel

Other Valuable Deposits

Administration

Administrator, Reporting and Payment Requirements

Collection and Distribution

Collection

Year

Uranium

Coal Severance Taxes- Above Ground

Total Tax 7%

Coal Severance Taxes- Below Ground

Total Tax 3.75%

Oil and Gas Severance Taxes

Total Tax 6%

TABLE 4I

Severance Tax Distributions

Capital

SALES AND USE TAX COMPOSITION

Statute Citations and Tax Basis – Sales and Use Tax

TABLE 5B

Table 5C

Total

SALES AND USE TAX COMPOSITION

Statute Citations and Tax Basis – Sales and Use Tax

TABLE 5B

Table 5C

Total

GOVERNMENT SERVICES

Education

Health Services

Cost of Health Services – Per Capita 1995-1996:

Counties and Cities/Towns: Hospitals and hospital districts, health inspections, disease control, senior citizen services, substance abuse & mental health services, community health services, developmental disabilities, Women’s, Infant & Children’s program (WIC).

Social Services

Transportation Services

Public Safety Services

Correction Services

Protective Inspection and Regulation Services

Protective Inspection and Regulation – Per Capita 1995-96

Natural Resources Services

Park and Recreation Services

Housing and Community Development

Services

Financial Administration Services

Judicial and Legal Services

General Public Facilities

General Public Facilities - Per Capita 1995-1996

General Government Management

Other and Unallocable

Other and unallocable- Per Capita 1995-1996

TAX

TAX

Increase Liquor Taxes

Cents

Cents

Increase Cigarette Taxes