Wyoming: The Ideal Place to Live and Invest in Real Estate

Wyoming real estate tax benefits for residents are exceptional. Some of the top highlights, which you can discuss with your legal and tax advisors, include no state income tax, corporate tax, estate tax, capital gains tax, or trust tax. Wyoming property tax, sales tax, and excise tax are among the lowest in America. It is one of only seven states that have no personal income tax.

Additionally, Wyoming has adopted a progressive version of the Uniform Trust Code and has extended the Rule against Perpetuities to 1,000 years for trusts administered in Wyoming. It is also one of just a few states where a family trust company can be formed and administered without regulation by the State Banking Commission. Through a dynasty trust, wealth preservation is possible through multi-generational planning.

Wyoming has legalized asset protection trusts for qualified assets. It allows for the ownership of real and personal property in forms that provide significant asset protection compared to other states. Trust assets are free of estate taxes and income from trusts isn’t taxed by Wyoming. Also, there is no state gift tax, so real estate can be gifted to heirs without any concern about paying extra taxes to the state.

Wyoming’s progressive trust and asset protection laws, combined with it being a “no tax” state, makes it the best on-shore tax haven states in the USA. It has been consistently rated as the #1 most wealth-friendly state by Bloomberg Wealth Manager and other similar publications. Wyoming also ranks #1 in state business tax climate by Tax Foundation and offers an excellent environment for business owners.

The Top 6 Questions About Wyoming Tax Advantage

These are some of the most commonly asked questions about taxes in Wyoming.

Does Wyoming Have A State Income Tax?

Nope! Wyoming is one of seven states that does not have a state income tax associated with it. The other states include Alaska, Florida, Nevada, South Dakota, Texas, and Washington. However, Wyoming has many different tax advantages that make it very competitive to these other states. But if you’re wondering “is there state income tax in Wyoming,” there is not. This is one thing that residents do not have to worry about.

Why Does Wyoming Have No State Income Tax?

We’ve already explained that there is no state income tax in Wyoming, and many people’s next question is, “why not?” Most of the people in the United States are used to paying income tax to the state they reside in, as well as the Federal government, which leads to wondering why some states won’t require this. Every state is different, but Wyoming has an exciting approach to gaining revenue without taxing income.

Wyoming is a small state in terms of its population, with around 600,000 residents across an area of about 98,000 square miles. With such a small population, relying on income tax to fill the government coffers wouldn’t offer much of a benefit. The number would be too low to take care of everything needed by the state.

Instead of running the state on income tax, the government’s two largest revenue sources are mineral royalty taxes and severance taxes. The former is a tax that is paid when selling minerals from Wyoming, while the latter is a tax on the removal of natural resources like coal.

Does Wyoming Have Property Tax?

While the answer to “does Wyoming have income tax,” is a solid no, property taxes are a bit more complicated. The state of Wyoming does have property taxes, but these taxes are ridiculously small compared to most other states in the US. Wyoming has two annual installments for paying property taxes, with one installation due on November 10 and the other on May 10.

The tax rates on property depend on the budget requests of the county the property is located in. As such, a city, county, or other district submits a budget request, and then this is divided by the assessed value of the area. The taxes in Wyoming are expressed as mills with one mill equaling one dollar of tax for every $1,000 of assessed value. The county can charge no more than 12 mills, while a town can charge no more than eight.

How Much is Property Tax in Wyoming?

As we mentioned above, property tax varies by town or county. One county might have a property tax rate of 0.51%, while another could have a rate of 0.62%, and one down the road might be 0.56%. Some counties will have higher taxes than others for that reason.

As an example, Teton County has an average country property tax rate of 0.613%. For someone who has a home that is worth $850,000, the property tax wouldn’t be more than $5,211 on an annual basis. This is because the state assesses property at a lower rate than it does industrial and mineral production property.

Is Wyoming a Tax-Free State?

The answer to this question really depends on what your definition of “tax-free state” is. In most cases, someone who is asking whether Wyoming is a tax-free state is concerned about whether there is an income tax, which means that Wyoming would be considered a tax-free state. However, if you’re asking whether Wyoming has no taxes at all, then no, Wyoming would not be regarded as a tax-free state.

To add a bit more information about where Wyoming qualified as tax-free and where it doesn’t, it’s essential to know what taxes aren’t required by Wyoming. The state of Wyoming has no:

• Income Tax
• Retirement Income Tax
• Capital Gains Tax
• Corporate Tax
• Estate Tax
• Trust Tax
• Real Estate Sales Tax

So, Wyoming does have taxes, but far fewer of them than most of the other states in the country. This is one of the reasons that the state is popular for businesses, property owners, retirees, and other individuals.

Is Wyoming a Tax Haven?

Yes! While most people think of places like Panama, the Cayman Islands, and the Bahamas as tax-havens, some of them exist right here in the United States. In fact, studies show that the United States is the best location to set up a shell company in the entire world. And if you’re looking for the tax benefits that create a tax haven, you can’t do better than Wyoming.

To get an idea of how popular it is to set up an anonymous business, you only need to look at the statistics. Limited liability companies are one of the most common types of companies used in tax havens, and Wyoming is one of the three least expensive places to start one. The other states are Nevada and Oregon. Between the three of them, there are nearly 700,000 anonymous LLCs registered right now.

Wyoming is a Tax-Friendly State for Residents

With no state income tax, a minuscule property tax, and the lack of several other taxes common to other states, Wyoming is the place to be when it comes to low taxes. By reading through this article, you should have a much better idea of what is true and what is false about taxes in Wyoming.

Curious to learn more about the state and real estate in the Jackson area? Making a move to the state might be the best thing you ever do. No longer will you have to worry about all those taxes that other states make you pay!

If you’re ready to learn more about Wyoming real estate, Huff Vaughn Sassi & Associates is here to assist you. Contact us today.