Posted on: July 23, 2015
Taxes and Doing Business in Wyoming
Why do businesses love Wyoming? It’s the most tax-friendly business state in the US. This keeps the administrative costs of operating a business low. Take a look:
6 Wyoming Tax Benefits
- No corporate state income tax
This means corporations pay no income tax to the state. Corporations will still need to pay their federal taxes, but no state corporate income tax means less money taken from profits and less paperwork at the end of a corporation’s fiscal year.
- No personal state income tax
The lack of personal state income tax is sweet, even if you don’t own a business. But, when you own a business, especially an LLC in Wyoming doing business is a lot sweeter. Some states charge as much as 12% (California) for this tax, and while the median is somewhere around 6%, this makes moving a business to Wyoming worth it for many entrepreneurs.
- Sales and use tax rate of 4% (counties option of adding an additional 2%)
Most states seem to hover around 6% for sales and use tax. The two percent tax savings makes goods less expensive for consumers. Sales tax is also seen by many experts as a way to focus taxation on the poor. Wyoming isn’t called the Equality State for nothing.
- No inventory tax
Often referred to as a tax on tangible personal property (a TPP tax), the inventory tax is a tax on any tangible asset (property that can be touched or moved). Wyoming doesn’t have such a thing, primarily because these taxes focus purely on businesses. This tax typically focuses on inventory like motor vehicles, boats and trailers, and heavy equipment. If you Wyoming LLC or corporation has any of these as part of its assets, don’t worry—it won’t be taxed.
- No inheritance tax
This tax applies less to businesses and more to individuals, but it is comforting to know that whoever inherits your estate once you’re gone won’t have to pay state taxes on the assets.
- Companies that focus on manufacturing are exempt from paying sales and use tax on equipment used directly and predominantly in the manufacturing process
This is huge if you’re starting a business that involves manufacturing a product. When starting your business, you’d obviously be required to buy a lot of expensive equipment. Starting that kind of business in Wyoming could save you hundreds, if not thousands, of dollars.
These are the basic tax savings for businesses in Wyoming. Have any other Wyoming tax-related questions. Let us know in the comment section below, and we’ll respond ASAP.