Poll: Should Wyoming Get Rid Of Residential Property Taxes?

A Constitutional Amendment to eliminate all Wyoming residential property taxes could go before Wyoming voters in 2026.

The legislature's Joint Revenue Committee in November voted to approve a draft resolution to get rid of residential property taxes in the state. Because such a move would require amending the state constitution, it would need a 2/3 majority vote of both houses of the legislature as well as a majority yes vote from Wyoming voters.

It's worth mentioning that in the case of a Constitutional Amendment, a proposal needs a majority of all votes cast in the election, not just those voting on the proposal. That means that voters who bypass the proposal count as no votes.

The elimination of residential property taxes would cut revenues by $644 million per year, according to a legislative service office memorandum. Wyoming property taxes are used to fund schools and local government services. They do not fund state governmental operations.

Another bill would increase the state sales tax from the current four percent to six percent if the Constitutional Amendment becomes law. Since most Wyoming counties levy a two percent sales tax, that would essentially mean Wyoming consumers would be paying an 8 percent sales tax on purchases. However, since counties the option of imposing a local sales tax of anywhere between one and three percent, theoretically the overall sales tax rate could be as low as seven percent or as high as nine percent.

The two percent sales tax increase is projected to raise about $475 million. That means if the calculations are correct, revenues to local governments and schools would still decline by roughly $170 million. But that number assumes that people will continue to make purchases at the same rate as they are currently doing. That may not be the case as the taxes push the cost of purchases higher.

That means the gap between lost property tax revenues and the money generated by increased sales taxes could end up being significantly larger.

How much larger, no one knows. Some opponents argue it could end up being well into the teens to completely make up for all lost revenues.

Arguments For Abolishing Residential Property Taxes

The biggest argument for eliminating residential property taxes in Wyoming is that they are so high they present a hardship to state property owners, in some cases jeopardizing the ability to own residential property.

Wyoming property taxes increased by a statewide average of 65 percent between 2019 and 2023, the last year for which numbers are available. That's a problem for many state residents, especially those with lower or fixed incomes. The idea of losing property people have worked hard for is one of the motivations for axing the taxes completely.

The current residential property tax structure can also be complicated, and shifting the burden to higher sales taxes would eliminate the need to navigate the current web of exemptions and regulations.

There is also the argument that it would help address one of the state's biggest issues, which is housing. Common sense would indicate that lower taxes should mean lower housing costs.

Finally, some advocates the idea of a consumption tax, since people have more control over what they buy, and therefor how much they are paying in taxes.

Arguments Against Abolishing Residential Property Taxes

Wyoming businesses could lose sales to people who go to surrounding states to avoid paying the sales tax. That is especially true for big-ticket purchases like cars. That is already a problem in northern Wyoming, where people often got to Montana to shop, since that state has no sales tax.

Many people in Wyoming already are in the habit of going to Denver or Salt Lake City or Rapid City to shop, and higher sales taxes seem likely to drive that trend even more.

Sales taxes are also considered regressive, meaning they hit low income people harder.

There are also concerns that increasing the sales tax would not increase revenues as much as expected, for the simple reason that people won't make as many purchases if the taxes push those costs higher.

Another concern is that the state may be forced to consider a state income tax at some point. That idea is deeply unpopular in Wyoming, but the fact is that schools and governmental services have to be paid for somehow. Once a ban in residential property taxes is in the Constitution there is no way to reverse it without another amendment. And the courts have repeatedly mandated a certain level of school funding in the state.

Some supporters of abolishing residential property taxes argue that schools and local governments need to find ways to "cut the fat" and spend less money. But opponents say there is in fact little or no "fat' to be cut and consider that to be a false argument.

So what do you think about abolishing residential property taxes? Take our poll and give us your opinion!