Wyoming stands out as a state with a favorable tax environment due to a combination of low tax rates and the absence of certain types of taxes.
No Personal or Corporate Income Taxes
Wyoming does not impose state income, gift, inheritance, estate, or capital gains taxes on its residents. There are also no taxes on retirement income, including out-of-state retirement income, or corporate income. Despite this, Wyoming residents are still subject to federal income taxes.
Sales and Property Taxes
Wyoming has a 4% state sales tax rate, and local jurisdictions may add up to an additional 3% more sales tax. Over 160 special taxing districts may also impose extra sales tax, usually another 3%, on goods that are sold, rented, or leased, with this tax paid by the consumer at the point of purchase.
Property Tax Details
- Ranked 10th lowest property tax rates in the U.S.
- Average property tax rate: 0.57%
Revenue from Natural Resources
A significant portion of Wyoming’s revenue is derived from taxes related to mineral production and severance. Oil and mineral rights also provide considerable income, allowing the state to keep sales and property taxes relatively low.
Tax Burden and Rankings
Wyoming is known for having one of the lowest overall tax burdens in the United States and a high-ranking tax system which relies on sales and property taxes instead of income taxation. These policies also extend to business owners, who are not required to pay corporate income tax.
What state has no federal income tax?
Every state is subject to federal income tax, including Wyoming. However, Wyoming itself does not impose a state income tax.
Why does Wyoming have no income tax?
Wyoming’s absence of a state income tax is offset by the state’s wealth in natural resources, which provides alternative revenue through taxes on mineral production, as well as sales and property taxes.