Understanding Wyoming Sales and Use Taxes
Understanding and complying with the sales tax requirements in the states in which you do business is absolutely essential. More states are taxing services, as well as retail sales, so no business owner can afford to be in the dark. In addition, you may find that you are liable for use taxes for products purchased out of state. This article answers some of the basic questions regarding sales tax in Wyoming.
In Wyoming a tax is imposed on the following sales:
- retail sales
- intrastate telephone and telegraph services
- intrastate transportation of passengers
- public utilities and gas, electricity or heat sold to consumers
- meals and cover charges
- transient living quarters
- services performed for the repair, alteration or improvement of tangible personal property
- contract geophysical exploration operations
- motor vehicles, house trailers, trailer coaches, trailers or semitrailers
- alcoholic beverages
- computer hardware and software
Leases. In Wyoming the sales tax is imposed on the gross rental paid for a lease or contract of tangible personal property if the transfer of possession would be taxable if a sale occurred.
Sales and use tax rate. The Wyoming sales and use tax rate is currently 4 percent (except for a 3 percent tax on farm implements). In addition, make sure you contact your local governments in Wyoming because they are allowed to assess a local sales and use tax.
Sellers Must Collect and Pay Over Sales Tax
In Wyoming although the sales tax is paid by the purchaser, sellers are required to collect the tax and are liable for the entire amount. However, the sales tax must be paid to the Department of Revenue by the purchaser unless the purchaser paid the taxes to a vendor.
Absorbing sales tax is illegal. In Wyoming, it is against the law to refund or offer to refund all or any part of the amount collected, or to absorb the amount of sales tax required to be added to the sales price and collected from the purchaser. As a seller, it is also against the law for you to advertise directly or indirectly that you will absorb the sales tax that is required to be added to the sales price.
Obtaining Tax Permits in Wyoming
In Wyoming every vendor must obtain from the Department of Revenue a sales tax license for each place of business. A new vendor must pay a $60 license fee.
Many Transactions and Items Are Tax Exempt
Wyoming has many specific items that are exempt from sales tax — for example, certain prescription medications are exempt from Wyoming sales tax. You'll want to check and see if you are exempt from the sales tax.
Tax exemption certificates. An exemption certificate may be issued by a purchaser of a nontaxable item. The exemption certificate may be based on the type of transaction (such as a resale exemption) or on the item itself.
Items Purchased for Resale Are Exempt
In Wyoming the sale of tangible personal property or services for resale or the resale of tangible personal property in connection with the performance of taxable services, is not subject to sales and use tax.
In Wyoming you must provide the seller a certificate of purchase for resale on all purchases for resale. Sample resale certificates are available from the Wyoming Department of Revenue. Resale certificates normally include the following information:
- the seller's name
- your name and address
- your nature of business
- the reason for the exempt purchase (processing or resale)
- a general description of the purchase
- your state sales tax or ID registration
- your signature
Blanket Resale Certificates Are Permitted
Sellers may accept blanket certificates from you as a purchaser if you repeatedly purchase the same type of property or service for processing or resale. However, blanket certificates may not be used to purchase property or services not covered by a blanket certificate. In Wyoming the resale certificates don't have an expiration period so it is up to you and the seller to agree on the period of validity. If a seller has not accepted a blanket certificate in good faith, liability for the tax does not shift from the seller to the purchaser.
Physical Presence Triggers Tax Liability
Wyoming has no statute that specifically taxes out-of-state mail order and catalogue sellers. You will be responsible for paying this tax only if you have physical presence within Wyoming. To determine if you have physical presence, ask yourself the following:
- Do I have retail facilities, a warehouse, or any office space in Wyoming? Maintaining retail or warehouse facilities will give you physical presence. Also, having an office for employees, even for business activities unrelated to mail order sales, will give you physical presence.
- Do my employees or I enter Wyoming for purposes of taking and transmitting orders from Wyoming? If your employee or independent contractor goes into Wyoming to take or transmit orders, your business may have physical presence in Wyoming. However, contracting with a common carrier to deliver mail order goods does not constitute physical presence.
- Do my delivery vehicles frequently enter Wyoming for purposes of delivering property? Frequent deliveries in Wyoming by your trucks will give you physical presence in Wyoming.
Wyoming Permits Use of "Bracket System"
The bracket system may be followed by sellers in computing the sales tax. The 4 percent tax is computed on each dollar and/or fraction of a dollar according to the following table:
|Amount of Sale ||Tax |
|$0.01 to $0.24 ||no tax |
|0.25 to 0.37 ||$0.01 |
|0.38 to 0.62 ||0.02 |
|0.63 to 0.87 ||0.03 |
|0.88 to 1.12 ||0.04 |
|and so forth |
Out-of-state Purchases Subject to Use Tax
The use tax is a complementary tax and does not apply in situations when the sales tax is collected. The use tax is imposed upon:
- sales in Wyoming
- persons storing, using or consuming tangible personal property
- tangible personal property sold by any person for delivery in Wyoming
- computer hardware and software
Property brought into Wyoming on which a sales or use tax has been paid in another state equal to or in excess of the Wyoming tax is not subject to tax in Wyoming.
In Wyoming the use tax is payable by the purchaser, but collected by the vendor. The person actually storing, using or consuming tangible personal property is liable for the use tax.
Claiming refund for excess tax payments
A taxpayer's application for a refund or credit of overpaid sales or use taxes must be made within three years from the date of overpayment.