Wyoming Corporate Tax: Everything You Need to Know
Wyoming corporate tax, while business-friendly, does requires some research if you want to make the tax process as simple as possible.4 min read
2. Advantages of Filing Taxes in Wyoming
3. Biggest Tax Requirement, Property Tax
4. C Corporations Versus S Corporations
Wyoming corporate tax, while business-friendly, does requires some research if you want to make the tax process as simple as possible. If you are planning to set up a business in Wyoming or have an established business and want to make sure you are complying with all tax laws, there are a couple of points you want to keep in mind.
Understanding Wyoming's business tax laws will ensure that you are better prepared for the filing process and cut down on unexpected fees or fines if tax laws are not complied with. While Wyoming tax laws are not overly complicated or burdensome, you want to make sure you are fully informed before filing or working with an accountant to file.
Business Filing Fees
One thing you want to keep in mind when filing taxes as a corporation is the annual fee required when filing your tax report. This fee is required by corporations or LLCs and is based on in-state assets. The filing fees follow a simple formula to determine the amount owed each year.
- If your assets are less than $250,000, the fee is a simple $50 payment.
- Anything above this $250,000 limit will be valued at $.0002 on the dollar.
- Use this formula: total in-state assets x $.0002 = annual fee.
For instance, if your total in-state assets are $300,000, the fee would be calculated by multiplying $300,000 by $.0002, coming out at $60. Another $2 convenience fee is added if you file online.
While these fees are not large sums, they are something you want to keep in mind when planning your filing. Maintaining complete records of your assets will help you prepare for the filing fees ahead of time.
Advantages of Filing Taxes in Wyoming
Wyoming is considered one of the friendliest states regarding taxes. With the smaller percentages for sales tax and lighter burdens for businesses compared to many other states, Wyoming is an ideal state to set up a new business. Some of the advantages to Wyoming's tax laws include:
- No entity tax for corporations.
- No personal income taxes.
- 4 percent state sales tax, one of the lowest in the United States. Even with added taxes within different counties or municipalities, the tax rate is normally no higher than 6 percent.
- Low property tax percentages.
Corporations in Wyoming are mostly spared from double taxation through this system where entity taxes are not required, and employees are able to keep more of their income by avoiding personal income taxes. This allows people to keep more of their earned money, allowing for more access to consumers in the market.
The state and municipal taxes in Wyoming are some of the lowest in the United States. This allows for a more competitive market and makes it easier for businesses to sell products and services. These businesses are required to file a sales application with the Department of Revenue for sales tax purposes, but it is a simple application process.
Biggest Tax Requirement, Property Tax
The biggest tax burden for residents of Wyoming is the property tax. While significantly lower than most other states, the property tax is the biggest portion of taxes collected in the state. Property taxes are collected based on the fair market value (FMV).
For residential and commercial property, the tax collected is 9.5 percent of the value of the property. For industrial lands, this percentage goes up to 11.5 percent. This is the state requirement, but a local mill levy rate (MLR) is added based on each area's rates for residential and commercial property. To calculate this rate, you can use this formula: (FMV x 9.5 percent) x MLR = Property Tax.
The biggest property tax burden falls on minerals. Wyoming state taxes minerals at 100 percent of the fair market value.
C Corporations Versus S Corporations
While the general tax laws for Wyoming prevent double taxation, this is not always the case for C corporations. C corporations are required to pay revenue taxes, unlike S corporations. On top of this revenue tax, owners and shareholders are required to pay personal income taxes on any profits that are withdrawn from the company. This means that profits for C corporations can be subject to double taxation.
This problem does not exist for S corporations because they do not have the same revenue tax burdens. Members of these types of corporations are required to pay personal income tax on their share of the company's profits for Wyoming and federal income tax. This does not include employees of a corporation, but rather the owners and board members.
If you need help navigating the corporate tax laws for Wyoming, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.