Wyoming Business Tax Guide
The state of Wyoming also known as the “Equality State” or “Cowboy State” has the recognition of being the top most state in coal-producing in the entire US. It is also one of the few states that does not levy a corporate income tax, personal income, or even gross receipts tax. You are probably wondering whether any form of Wyoming business tax will be applicable. This article will answer this query and also cover various aspects like tax advantages in Wyoming, how businesses are taxed, and Wyoming business tax registration among others.
Wyoming Business Taxes
A new business or an entrepreneur establishing a business in Wyoming will need to understand and check their federal, state, and local business tax requirements. Generally, if you are operating or planning to operate a business then the Wyoming business tax will be dependent on the form of business or business structure like an LLC, corporation, or partnership etc. Business tax according to the Internal Revenue Service (IRS) can be classified as under:
- Income Tax
- Self-Employment Tax
- Estimated Tax
- Excise Tax
- Employment Tax
There is no individual or corporate income tax in the state of Wyoming but there is a Wyoming tax rate of 4% for state sales tax. Most businesses are required to file their Wyoming business tax return annually.
What are Wyoming business taxes?
When you start a new business, there may be a variety of taxes that you would be required to file right from federal to local taxes. Thetypes of tax and the tax rate can vary from one state to another and from one county to another. Let’s look at an example of the same where Wyoming business tax is concerned:
Example: When we look at the Wyoming tax rate for sales tax then it is set at 4% but the counties have the option of charging an additional 1% tax for specific purposes as well as 1% tax for general revenue. According to the Wyoming Department of Revenue, Excise Tax Division, the January 2020 master chart specifies a State tax rate of 4% for Albany along with 1% general purpose county option tax and an additional 1% for specific purpose county option tax. Hence, the total sales/use tax rate for Albany is 6% while Goshen charges 5.25%, Lincoln has 5%, and Sublette has 4% tax rate.
Wyoming business tax comprises primarily of the following:
- State sales tax
- Excise (Sales & Use) Tax
- Property tax
- Self-Employment Tax
- Payroll Taxes
What are the tax advantages in Wyoming?
Wyoming is considered as one of the most tax friendly states in the nation and this is one of the primary reasons why it is a favorite amongst business owners and first time entrepreneurs. Small and medium sized enterprises can enjoy a variety of Wyoming business tax benefits including several exemptions and incentives distributed over different industries. Some of the top Wyoming business tax advantages are:
- Low and No Tax environment: One of the top benefits of forming a new business in Wyoming is that the state does not levy the following taxes on businesses:
- Corporate Tax: There is no corporate tax, which simply means that business corporations will not be charged any entity tax in the state. This will help you avoid double taxation of Wyoming business tax.
- Personal Income Tax: Wyoming also does not levy any personal income tax.
- Inheritance or Estate Tax: This is a type of Wyoming business tax that is not charged if you leave an estate to surviving members.
- Intangible Taxes: This is another key Wyoming business tax benefits as the state doesn’t impose taxes on any intangible assets e.g., stocks and bonds.
- Tax Exemptions: One of the salient Wyoming business tax benefits is a variety of tax exemptions that businesses can apply for. These exemptions will help lower your overall Wyoming business tax and help save money. Some of the most popular tax exemptions include:
- Manufacturing Sales Tax Exemption
- Data Center Sales Tax Exemption
- Property Tax Exemption
How are Wyoming Businesses Taxed?
If you start a new business in Wyoming there may be a few taxes that would be applicable depending on the type of business and the activity. The Wyoming tax rate will be different for different types of taxes and once you understand the business tax laws in Wyoming, it will help you to be better prepared for the filing of returns. It will also help in cutting down on any fines or unexpected fees. Hence, it is essential to ensure you have the necessary Wyoming business tax registration for filing tax returns. The different types of taxes in Wyoming include:
Wyoming corporate net income tax
Wyoming is considered as one of the least taxed states in the USA and the good news for businesses is that they will not be required to file a Wyoming business tax return for corporate income tax. However, if you have formed a C corporation then you may be required to pay what is known as the revenue tax. Business entities like S-Corporation or any other flow-through entities are not required to pay any corporate net income taxes on their revenue earned. There is a Federal Corporate Income Tax that will be applicable to businesses and the Wyoming tax rate will vary according to the tax bracket your business falls under like the marginal corporate income tax rate for the tax bracket $0 to $50,000 is 15 percent. You will need to apply for and obtain an Employer Identification Number (EIN) to file federal tax returns.
Are you planning to apply for a Federal tax ID?
Wyoming personal income tax
The Wyoming Income Tax Act – HB0147 states that any taxpayer generating income through business activity in this state will need to allocate as well as apportion the taxable income for the purposes of WY Stat § 39-12-101 (2017)(b)(iii)(F). However, Wyoming is also one of the few states that do not levy any personal income tax or Wyoming business tax. In fact, for specific business types like a limited-liability company including those that have elected to be taxed as a corporation, state income taxes will not be applicable.
Wyoming sales tax
Generally speaking, most states in the USA levy some form of state sales tax although the sales tax rate can vary from one state to another. As a comparison, the Wyoming tax rate is as low as 4% and a maximum of 6% while that of Tennessee is 9.53% and Arkansas is 9.47%. The 4% state sales tax is applicable in each of the counties and apart from this; counties can also add 1% to the state sales tax increasing it to 5%. This is also known as the “5th penny” and is an optional tax that requires the county voter’s approval. Wyoming also has a 6% Optional Special Purpose Sales Tax that is enforced by specific counties. In order to file sales tax, you will have to ensure Wyoming business tax registration using the Sales/Use Tax License Application issued by the Wyoming Department of Revenue.
Wyoming property tax
If you or a business owns any commercial or industrial real estate in the state of Wyoming then you will be required to pay property taxes on that real estate. Property tax is an important Wyoming business tax as it is considered to be one of the primary sources of funds for local governments, cities, school districts, and counties. The amount of property tax for Wyoming business tax return is based on the market value of the said commercial or industrial property.
What does commercial or industrial property include? This type of property takes into account different types of commercial as well as industrial structures. It is also important to understand that the market value of the property is different from the taxable value and the market value cannot be used for calculating Wyoming business tax return. The market value is the price of the property if and when it is being sold while the taxable value is the value that is used for calculating taxes that are due on the said property. Currently, the Wyoming tax rate for commercial property is assessed at 9.5% of their market value while industrial property is assessed at 11.5% of their market value.
Tax Information by Wyoming Department of Revenue
The Wyoming business tax requirements of every business are different. Some businesses may need to file only sales tax while other businesses may need to file sales and property taxes. The Wyoming Department of Revenue has a dedicated website that not only provides detailed information pertaining to the various taxes that are levied in the state but also provides forms for Wyoming business tax registration. You will also be able to take advantage of the information provided by them on Tax Relief Programs and E-Services programs for tax payment and registration.
How Can IncParadise Help You?
Each business has its own set of requirements depending on the type of activity or trade they are planning to conduct. The first step towards starting a business is registering with the state. IncParadise, an expert incorporation service provider in Wyoming can help you to register your LLC or corporation in the state.
At IncParadise, we value our clients and understand the need for businesses to own an office in Wyoming. Hence, we have created two specialized services called the Wyoming Mail Forwarding Service and the Wyoming Virtual Office Program. The mail forwarding service will take care of all your important mails when you are out of state while the virtual office will provide you with an actual street address for your business without the need for investing in commercial property.
We understand that businesses also require annual maintenance and have to be compliant with several state regulations. We also understand that some businesses may require specialized services like Wyoming domestication and foreign qualification. We can cater to specialized and annual business requirements through Wyoming additional services. These services include Edgar filings, Certificate of Good Standing (Certificate of Existence) in Wyoming, Reinstatements, among others.