Wyoming Department of Revenue

1. Wyoming Department of Revenue The Role of Sales and Use Taxes in Funding Local Government

2. Summary Matrix of Major Revenue SourcesLocal Government

3. Resort District Tax

4. Economic Development Tax

5. Impact Assistance Funding • Impact Assistance provides additional sales tax revenue to local entities impacted by major industrial construction projects. • Project must first be qualified for assistance by the Industrial Siting Council. • Once qualified the Department of Revenue calculates a 12 month base period average to establish the baseline for funding. • During the life of the project the department measures the difference between the base period average and the actual sales tax collections from the affected jurisdiction. • The difference between the base period average and actual collections is distributed to the affected jurisdictions based on a percentage supplied by the Industrial Siting Council. • The funding formula can be negatively affected by exemptions which minimize the additional taxes collected during construction. • Note the $14M dollar decrease in sales tax collected from FY2009 to FY2010.

7. Sales Tax Rates and Distribution The state rate for sales and use taxes is four percent (4%). Sixty-nine percent (69%) of the state tax goes to the state general fund with the remaining thirty-one percent (31%), less administration fees and a set distribution, going to county governments. The remainder is allocated to the local governments proportionally. based on the population within the county where the sale occurred. Counties may impose up to three percent (3%) in additional general purpose, specific purpose and economic development taxes with voter approval. One percent of the collected option taxes are deposited into the general fund for administrative purposes, and the remainder is allocated to the local governments based on population within the county.

8. Recent Changes to Structure • July 1, 2002 the legislature altered the distribution formula for the local share of state sales and use taxes. • Formula changed from 72% - 28% (state/local) of the state tax to 69% - 31% (state/local) to be phased in over a 2 year period. • Also phased in a separate distribution to counties from a 1% carve out of the local share. • Provided a flat distribution of $40,000 per county per year. • Remainder of the 1% carve out distributed based on relative population within each county • July 1, 2004 the manufacturer’s exemption was passed and is due to expire on June 30, 2011. • July 1, 2005 redistributed penalties to the school foundation fund.

9. Recent Changes to Structure • July 1, 2007 made the 4% state sales tax permanent. • July 1, 2007 Effective date for the exemption on food for domestic home consumption. • July 1, 2007 added the provision for an economic development option tax. • July 1, 2007 legislature increased the maximum local levy of general and specific purpose options to 3% from 2%. (To date no county has imposed the maximum local rate). • January , 2010 legislature created an exemption on the sales of equipment for qualifying projects used to generate electricity from renewable resources. Exemption is terminated effective December 31, 2011.

10. Source: SALES TAX COLLECTIONS ENDURED THE WORST DROP IN FY 2010: A&I Economic Analysis

11. Source: SALES TAX COLLECTIONS ENDURED THE WORST DROP IN FY 2010: A&I Economic Analysis

12. Source: SALES TAX COLLECTIONS ENDURED THE WORST DROP IN FY 2010: A&I Economic Analysis

13. Source: SALES TAX COLLECTIONS ENDURED THE WORST DROP IN FY 2010: A&I Economic Analysis