Wyoming Tax Benefits: 10 Reasons to Relocate Now

Wyoming’s Tax Advantages Are Substantial!

Today, I would like to talk about Wyoming tax benefits.

Because Wyoming is a very tax-friendly state. Whether you:

  • Own a business
  • Earn a paycheck
  • Collect retirement income
  • Enjoy spending money
  • Plan to transfer assets to heirs

You too can likely benefit from the taxes in Wyoming. When compared to other states.

So, no further delay. Let’s dive into the tax advantages of residing in Wyoming today…

Wyoming tax benefits

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Wyoming Tax Benefits

Here are my top 10 Wyoming tax-friendly policies:

  1. No personal income tax
  2. Zero tax on out-of-state retirement income
  3. Tax-free earnings from intangible assets
  4. Tax-exempt sales of real estate
  5. No corporate income tax
  6. Low property taxes
  7. Low sales taxes
  8. No excise tax on gas or groceries
  9. Tax-free gifting of assets
  10. No estate or inheritance tax

In my opinion, Wyoming’s tax benefits are like no other state.

So, let’s go through Wyoming’s tax advantages one by one.

1. No Personal State Income Tax in Wyoming

Wyoming is one of only nine states in the country. That does not levy a personal income tax on its residents.

In case you are curious. I will share the other 8 states that, like Wyoming, do not charge individuals an income tax.

They are:

  • Alaska
  • Florida
  • Nevada
  • New Hampshire
  • South Dakota
  • Tennessee
  • Texas
  • Washington

And there is a small side benefit to Wyoming’s no individual income tax policy.

What is it? The fact that filing a state income tax return each year is not required.

The savings from not needing to file are small. Especially if you prepare your taxes yourself.

I do mine. And use Turbo-Tax to prepare and file annual tax returns.

On the other hand, you may use a paid tax preparer. In that case, the savings from not needing to file a state return. Certainly, will be more substantial.

This one Wyoming tax policy by itself is a big benefit. But it has many implications.

Allow me to discuss them in the next several sections of this article. Because they are a large part of the tax advantages of Wyoming.

2. Zero-Tax On Out-Of-State Retirement Income In Wyoming

This next policy makes Wyoming income tax-friendly for retirees. Part of making the state one of the more affordable places to live.

Because you won’t pay Wyoming state income taxes on retirement income. Regardless of the source.

Here is what I mean as it relates to Wyoming taxes for retirees…

Wyoming Income Tax Benefits On Social Security Income

Wyoming does not tax retiree earnings from social security. So, keep more of what you make in this state. From the federal government’s retirement program.

And you deserve it. Having paid into the social security system for many years to earn your benefit.

Tax Benefits Wyoming: Private Pension Income

And the same goes for your earnings from private pension plans. Also known as defined-benefit pension plans.

Regardless of what you call them. Income taxes are not collected by this state! When you receive your money.

These types of retirement plans are a dying breed. But perhaps you are fortunate to have one from a past employer.

Then don’t worry. As I said, Wyoming won’t tax it.

Wyoming Tax Benefits On Defined-Contribution Retirement Plans

Many retirees have another source of income. It comes from tax-deferred retirement plans.

These plans can take several different forms. Specifically,

  • 401(k) plans
  • 403(b) plans
  • Individual retirement accounts (IRAs)

The Federal Government sets the rules for when withdrawals must be taken. To avoid a tax penalty.

And when it’s your time to withdraw. Once again, Wyoming won’t tax your distributions.

I don’t know about you? But when I add it all up.

Taxes in Wyoming for retirees look pretty good to me. So, it might be an interesting state to spend your retirement years. At least financially speaking.

Next up. Whether you are a retiree. Or still slogging it out in the working world.

Here is yet another Wyoming tax rate benefit…

3. Tax-Free Earnings From Intangible Assets In Wyoming

Wyoming taxes for retirees

Intangible assets are assets that do not have physical substance.

For example, savings accounts, bonds, stocks, mutual funds, and exchange-traded funds (ETFs). Just to name some of the more popular types.

First of all, these assets provide a return on the owner’s money. Furthermore, the return can be received in 3 forms…

Wyoming Tax Benefits On Interest Income

Interest is paid on saving products and bonds. Regardless, this income is not taxed in Wyoming

Tax Benefits Wyoming: Dividends

Dividend-paying stocks, many mutual funds, and ETFs pay dividends. And dividend income is not taxed by the state of Wyoming.

Wyoming Tax Benefits On Capital Gains

Finally, Wyoming does not tax realized capital gains generated by intangible assets.

A realized capital gain is created when an intangible asset is sold at a higher price. Versus the price paid when it was acquired.

Here is another one of the great Wyoming tax advantages.

4. Tax-Exempt Sales Of Real Estate In Wyoming

Not only can you sell intangible assets in Wyoming free of tax. But you can do the same with tangible assets too.

Because Wyoming capital gains tax is zero. From real estate sales.

Nor does the state charge a tax for transferring property to new ownership. More frequently called a transfer tax.

These Wyoming state tax rules apply to commercial and residential property. Which is a big benefit if you own appreciating real estate.

Such as a property in or around Jackson Hole. An area where residents enjoy the Rocky Mountains.

And all the Teton Mountain range has to offer there. Including nice gains in home prices.

Jackson is far from one of the less expensive places to live in the U.S. But offers a high quality of life. Placed in a beautiful outdoor setting.

But back to Wyoming taxes. And the next topic is?

Wyoming corporate tax benefits…

5. No Corporate Income Tax In Wyoming

Here’s another tax benefit of living in Wyoming. The state does not have a corporate income tax.

Nor does it have a gross receipts tax on businesses. Where taxes are owed based on a businesses’ revenue.

Wyoming sets itself apart in this area of taxation.

Because it is one of only two states in the country. That has neither a corporate income tax. Nor a gross receipts tax.

So if you want to relocate your business to Wyoming. Or, start a new company.

Make it as successful as you can. And the state won’t take any of your profits. In the form of a Wyoming business tax.

On the other hand, businesses are responsible for property taxes in Wyoming. And I have more on real estate taxes next.

They are another one of the tax advantages of living in Wyoming.

6. Low Property Tax in Wyoming

Real estate taxes are influenced by two things.

First of all property values. Secondly, the tax rate is applied to those property values.

And it is the Wyoming property tax rate where the state shines.

Having one of the lowest residential real estate tax rates. Versus other states in the country.

Next, another one of the tax benefits of living in Wyoming…

capital gains tax Wyoming

7. Low Sales Tax In Wyoming

If you like spending your money. As much as making it.

Then you are going to like this tax advantage of Wyoming.  Because the Wyoming sales tax rate is low.

The state’s base rate is 4%. And local governments can add on to the base.

Thus, on average, Wyoming’s sales tax rate comes to a little over 5%.

Making it one of the cheaper sales tax states. Versus other states in the country.

Some items, such as groceries and prescription drugs, are exempt from sales tax too. Making the savings on your everyday purchases even greater.

8. No Excise Tax On Gasoline Or Groceries In Wyoming

Some states have taxes on resident’s purchases of gas and groceries. And call them an excise tax.

Here is another tax benefit from Wyoming. They do not use this practice.

But to be fair. The state does tax gas…

Low Gasoline Taxes When Living In Wyoming

Wyoming does have a per gallon gas tax at the pump. Similar to an excise tax.

Taxes are one reason why gasoline prices are so high in many states. Partly because the federal government and each state put a tax on every gallon you buy.

A gasoline tax is just another type of sales tax. At least, in my opinion. And most all states have them in one form or another.

Whether it’s called an excise tax. Or called something else.

But here is the positive part about Wyoming taxes on gasoline…

The state’s gas tax per gallon ranks in the top 20 lowest of all states in the nation.

So, gas up. And take a drive in Wyoming. To enjoy the beautiful landscape this state offers.

Okay. So far we have talked about Wyoming taxes on making money. And spending money.

Hopefully, you are starting to see that Wyoming is a very tax-friendly state.

But there is one more category of taxes I want to talk about. Sometimes they are referred to as death taxes.

9. Tax-Free Gifting Of Assets In Wyoming

Here is one strategy to avoid federal estate taxes. And state taxes at death.

It is to give assets away while you are alive.

And Wyoming won’t discourage you from doing this. By charging a tax on gifts.

Because both real estate and monetary assets can be gifted tax-free. But be careful.

The Federal Government does have limitations on gifts. If exceeded, they can trigger tax consequences. At the federal level.

10. No Estate Or Inheritance Taxes in Wyoming

And now we get to death taxes.

Wyoming Tax Benefits On Assets Held In An Estate

Estate taxes result from a deceased person’s assets that are held in their estate formed at death. In many other states, those assets are charged a tax.

But Wyoming does not have an estate tax.

Wyoming Tax Benefits On Inherited Assets

Inheritance taxes are also a result of death. But in this case, the individual receiving the assets.

Known as an heir. Is responsible for the tax.

And, you guessed it. Wyoming does not tax those who receive an inheritance of monetary value.

Wyoming Tax Benefits: Dynasty Trust

While the Wyoming inheritance tax and Wyoming estate tax are both zero.

The state also has liberal laws regarding trusts. For use in protecting assets from taxes for generations.

For example, in Wyoming, dynasty trust laws allow for trusts that can last 1,000 years.

By using a dynasty trust, families can pass assets to succeeding generations.  And do so free of the estate tax. And free of generation-skipping transfer tax. In the state of Wyoming.

Okay. That’s today’s discussion about Wyoming tax policy. But there’s more. Before I wrap up…

FAQs about Wyoming taxes compared to other states

Frequently Asked Questions About Wyoming Taxes

Allow me to address a couple of frequently asked questions. About Wyoming taxes…

How Do You Establish Wyoming As Your Taxing State?

To be taxed by a state. You need to establish what is called nexus.

For a business, establishing a Wyoming corporation or limited liability company (LLC) is a good start. Plus having a primary business office, local phone number, and a local bank account are good ideas too.

For individuals, establishing primary residence in Wyoming is the best way. Then make that location the address of record for your financial accounts.

Furthermore, get a Wyoming driver’s license. And register to vote in the state. Doing so will establish Wyoming as your state of record. For tax purposes.

The bigger challenge may be convincing your current state that you no longer have nexus there.

And each state’s rules may be a little different. To get taken off their tax roles.

How Does Wyoming Earn Revenue?

Revenues from Wyoming taxes compared to other states are very interesting.

First of all, we already know that the state earns revenue from property taxes, sales taxes, and gasoline taxes. Just like other states. Even though these Wyoming tax rates are quite low.

On the other hand, Wyoming taxes the sale of minerals from the state. And taxes the removal of natural resources.

These practices are more unique. As compared to other states in the country.

Okay. That’s enough about state taxes for today. So, let’s finish with a summary…

Summary: 10 Wyoming Tax Benefits

As I mentioned at the beginning, Wyoming is considered one of the most tax-friendly states.

Anyone moving from a state with high tax rates. To Wyoming. Will surely benefit financially.

Furthermore, many think of Wyoming as a tax haven.

So, keep that in mind. When making a state-by-state assessment of where to live.

Finally, here are 10 Wyoming tax benefits you can enjoy. By establishing nexus in the state.

  1. No personal income tax
  2. Zero tax on out-of-state retirement income
  3. Tax-free earnings from intangible assets
  4. Tax-exempt sales of real estate
  5. No corporate income tax
  6. Low property taxes
  7. Low sales taxes
  8. No excise tax on gas or groceries
  9. Tax-free gifting of assets
  10. No estate or inheritance tax

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Disclosure & Disclaimer: I am not a licensed investment adviser, financial adviser, or tax professional. And I am not providing you with individual investment advice, financial guidance, or tax counsel. Furthermore, this website’s only purpose is information & entertainment. And we are not liable for any losses suffered by any party because of information published on this blog.

conclusions about Wyoming tax advantages

Wyoming Tax Benefits Explained