STARTING AND OPERATING A BUSINESS IN WYOMING



Copyright © 2017, Michael D. Jenkins
All Rights Reserved


CHAPTER 14

NOTE: This is only one of 14 chapters of the electronic book, "Starting and Operating a Business in Wyoming." For information on ordering the entire book or similar books for 32 other states, and/or the front-end "Small Business Advisor" software, click here.



CONTENTS OF THIS CHAPTER:


I. INTRODUCTION

II. LEGAL ENTITIES

(a) In General
(b) Sole Proprietorships
(c) Partnerships
(d) Corporations
(e) S Corporations
(f) Limited Liability Companies (LLCs)
III. BUSINESS ACQUISITIONS
(a) In General
(b) Bulk Sale Laws
(c) Tax Releases
(d) Unemployment Tax Rating of Seller
IV. WYOMING TAXES AND OTHER GENERAL REQUIREMENTS
(a) In General
(b) State and Local Licensing
(c) Income and Franchise Taxes
(d) Sales and Use Tax
(e) Real and Personal Property Taxes
(f) Other Business Taxes
(g) Trade Names
V. EMPLOYER REQUIREMENTS IF YOU HAVE EMPLOYEES
(a) Employer Registration and Withholding
(b) Unemployment and Other State Payroll Taxes
(c) Workers' Compensation Insurance Coverage
(d) State Wage and Hour Laws
(e) State Occupational Safety and Health Laws
(f) Other Miscellaneous State Labor Laws
VI. STATE SOURCES OF HELP AND INFORMATION
(a) Key State Agencies Contact Information
(b) Small Business Development Centers
(c) Internet Sites
(d) Financing Sources


I. INTRODUCTION


HIGHLIGHTS OF RECENT MAJOR TAX AND OTHER LAW CHANGES AFFECTING WYOMING BUSINESSES:

WYOMING CHANGES:

  • Corporation and Individual Income Taxes: (Not applicable in Wyoming)

  • Sales and use tax: All tip income of restaurants, whether from voluntary gratuities offered by customers or from mandatory gratuities automatically added to diners' bills, is now exempt from sales tax. Previously, only the voluntary gratuities offered by diners was exempt. In addition, this exemption from sales tax has been expanded to other occupations than restaurant workers, such as parking lot or car wash attendants.

    Also, effective since July 1, 2015, rentals or leases of tangible personal property between closely affiliated business entities, such as between a parent corporation and an 80%-owned subsidiary, are exempted from sales and use tax.

    The sales and use tax exemption for machinery and equipment used in manufacturign in certain industries was due to expire after December 31, 2017, but in 2017 the legislature extended the exemption until December 31, 2027.

  • Franchise/License Tax: No changes since our last edition. Tax is still imposed on corporations and other limited liability entities at $.0002 per dollar of capital allocable to Wyoming.

  • Property Taxes: No significant changes since our last (2015) edition.

  • State Unemployment Tax: The taxable wage base for Wyoming unemployment tax decreased to $25,400 in 2017, from $25,500, in 2016. Unemployment tax rates for new employers vary by industry and eventually are based on each employer's experience rating. The minimum tax rate for experience-rated employers is only 0.34% in 2017, up from 0.27% in 2016 and the maximum rate is 8.84%, up from 8.77% in 2016.

  • Other Wyoming Taxes Covered in This Publication: No changes since last edition.

  • Wage Payment Date for Terminated Employees Changed: Under 2015 amendments to the Wyoming wage payments law, the date by which final wages must be paid to a terminated employee has been changed. Before 2015, final wages had to be paid within five days of termination. For details of this change, see Chapter 6, Section 6.18 of this edition.

  • State Minimum Wage: The Wyoming minimum wage remains at $5.15 an hour, and Wyoming (along with Georgia, also at $5.15) is one of only two states in the union with a minimum wage lower than the $7.25 federal minimum wage. However, most Wyoming employers will be subject to the higher federal minimum wage, so the $5.15 Wyoming minimum wage is largely irrelevant.

  • Rise in Wyoming Unemployment Rate: The jobless rate in Wyoming rose sharply, from 4.2% in May, 2015 to 5.6% in May, 2016, reflecting the state's weakening economy, in the wake of the collapse in the shale oil boom that Wyoming had been enjoying until 2014. However, the state's economy has bounced back, and the unemployment rate was back down to only 4.0% in September, 2017.

FEDERAL CHANGES:

  • 2018 I.R.S. Annual Inflation Adjustments: The I.R.S. has issued several notices setting forth the numerous 2018 tax law inflation adjustments, such as income tax brackets, pension plan and IRA limits, fringe benefit exclusions and increased federal estate and gift tax exemptions. This edition is fully updated throughout all chapters for those dozens of 2018 indexing adjustments, plus other annual tax law adjustments like the 2018 standard mileage rate allowance for business use of an auto, which was increased from the 2017 allowance.

  • New I.R.S. Regulations on Debt-Equity Distinction: In October, 2016, the I.R.S. released massively detailed and highly complex new regulations under Section 385 of the Internal Revenue Code, which determine whether debt issued by a corporation will be be treated as valid debts or as equity (stock) for tax purposes. The main concern for taxpayers are the onerous new documentation requirements that must be met in order for debt to qualify as debt, rather than equity, when the debt is created. The classification of a corporate debt as equity by the I.R.S. can have severe consequences, since payments of interest and repayment of the principal of the debt will be treated as dividends to the recipient and the interest paid will not be deductible by the payor corporation.

    The new regulations and the exemption of most small businesses from the documentation requirement, are discussed in Section 12.4 of Chapter 12 of this edition.

    Further developments regarding these regulations are the recent postponement of their effective date until January 1, 2019 and the fact that the Treasury Department under President Trump, in July, 2017, has identified this set of regulations as unduly "burdensome" for taxpayers, meaning that they may be modified or rescinded before they go into effect.

  • Medical Reimbursement Plans Are No Longer a Tax Trap for Small Businesses in 2017: Prior to issuance of regulations under the Affordable Care Act ("ObamaCare"), many small corporate businesses set up medical benefit plans to pay some medical expenses for their employees, as a valuable fringe benefit. However, under the ObamaCare law and regulations, such plans no longer met the new "market reform" requirements, and a brutal IRS penalty of $100 per day per employee for every day such a plan continued to exist could quickly bankrupt a small business.

    Small businesses with under 50 employees, who had assumed they were not subject to ObamaCare, had a rude awakening if they did not act to cancel any medical reimbursement plans they may have had, or else made the drastic changes needed to bring any such plans into compliance with the new law and regulations, as full-fledged health care plans

    Fortunately, Congress came up with a solution to this unhappy situation, by enacting the "Cures Act" on December 13, 2016. Under this bi-partisan legislation, certain "qualified small employer health reimbursement arrangements" (QSEHRAs) may be safely established in 2017 or later by small employers (under 50 full-time employees or full-time equivalent), and will NOT be considered to be "group health plans" and thus will not be subject to the ObamaCare penalties described above if they meet certain minimal requirements. See Chapter 10, Section 10.2 for pointers on how to set up such a plan without incurring the massive I.R.S. ObamaCare penalties and for information on the 2018 limitations for benefits under QSEHRA plans.

  • Internet Tax Freedom Act Made Permanent: The Internet Tax Freedom Act, a 1998 federal law, imposed a temporary moratorium on state taxation of Internet access fees for three years. After the moratorium was extended eight times, it was finally made permanent in 2016, although the new law made exceptions for some states. See Chapter 8, Section 8.9 for more on this and other information on Internet taxation and regulation.

  • The Consolidated Appropriations Act of 2016 Tax Legislation: This massive budget and tax enactment by Congress made a great many sweeping changes in the federal income tax laws, including many such laws relevant to small businesses. It retroactively reinstated numerous tax deductions, exemptions, and credits that had expired in 2015 and finally made permanent a number of tax incentives that have been renewed and extended by Congress every few years. Details on the many provisions of this sweeping new tax law are covered in the relevant sections of all chapters of this edition of Starting and Operating a Business in Wyoming.

  • Major Improvements in the R & D Tax Credit, Starting in 2016: The PATH Act, part of the Consolidated Appropriations Act of 2016, made major changes to the tax rules relating to the research and development ("R & D") tax credit for small businesses. For details on how the use of the R & D credit has been expanded and improved for small businesses, and to learn which small businesses can qualify for the new R & D incentives, see Chapter 11, Section 11.5.

  • Tax Write-Off of Small Items Made Easier in 2016: The I.R.S. recently (2015) issued tax regulations that allowed taxpayers to fully write off small purchases of under $500 each for tangible items such as tools, supplies, small machinery or parts, rather than having to capitalize such costs and depreciate them over a number of years. Responding to criticism from various organizations representing professionals such as accountants, attorneys, and tax preparers, the I.R.S. has since greatly increased the "safe harbor" amount to well beyond the $500 amount that was initially proposed, effective January 1, 2016. See Section 9.2 of Chapter 9 for details.

  • New Federal Overtime Regulations Placed on Hold: Under new U.S. Department of Labor Regulations, which were to go into effect in December, 2016, the existing overtime regulations were amended by President Obama to (generally) include an overtime pay requirement for millions of salaried white collar employees, such as store managers, who were previously not covered by the federal overtime laws.

    However, a federal District Court imposed a temporary stay on implementation of the new regulations in 2016 and then ruled on August 31, 2017 that the new regulations are invalid, since the President had no authority to make such new laws and overturn existing regulations. Accordingly, while that decision is being appealed, it is now unclear when the new overtime rules will go into effect, if ever. Details on how the new overtime regulations may affect your business, should they eventually be upheld by the higher courts, are covered in Chapter 6, Section 6.6.

  • ObamaCare Employer Mandate Apparently Will Remain in Effect: For large employers, those with 50 or more full-time employees (or the equivalent), the employer mandate, requiring such employers to provide health insurance for their employees, went fully into effect in 2016 under the Affordable Care Act ("ObamaCare"). ObamaCare was expected to be repealed after the election of Donald Trump as President and Republican majorities in both houses of Congress in 2016. However, as of this publication date, in late 2017, that has not occurred, and the odds of repeal of ObamaCare or even portions of it, like the employer mandate, are now thought to be somewhere between exceedingly slim and vanishingly small, since several key Republican Senators have joined with all 48 Senate Democrats to prevent any changes or dismantling of President Obama's legacy.

  • Changed Filing Dates for Federal Income Tax Returns for Businesses: For the first time in the better part of a century, the due dates for filing partnership and corporation federal income tax returns have changed, for taxable years that began in 2016 or later. Some types of corporations are not affected by the new tax return due date provisions, however. The due date for an LLC return depends on whether the LLC is treated as a partnership, C corporation, or S corporation for income tax purposes.

    Note, however, that in I.R.S. Notice 2017-47, the I.R.S. announced that it would waive penalties for 2016 partnership returns that were either filed late or an extension was requested late, but were filed (or an extension requested) before the 15th day of the fourth month after the taxable year ended (by April 15th, for calendar year 2016 returns).

    To determine whether these changed tax return dates will affect your business, see Chapter 5, Section 5.5 of this edition for further details regarding the filing of Form 1065 and Form 1120 tax returns.

  • Increased Withholding Rate on Sales of Real Estate To Foreign Persons: Under the Protecting Americans from Tax Hikes Act of 2015, the former 10% withholding rate when you sell U.S. real property or real property interests to nonresident aliens or foreign entities was generally increased after February 16, 2016, with certain exceptions. For details on the new withholding requirements on sales of real estate to foreign persons, see Section 3.6 of Chapter 3.

FOREIGN TAX CHANGES THAT WILL AFFECT SOME WYOMING BUSINESSES:

Most owners of small businesses in Wyoming might not be aware that tax changes made by foreign governments could have any effect on them, if their business is conducted in Wyoming. However, if you sell certain types of items to customers in most parts of Europe, as well as Japan, India, South Korea, and other countries such as Australia and New Zealand, you will be affected by these foreign taxes, so you need to be aware of recent new or changed taxes that might apply to your business if you sell into those parts of the world.

For example, since 2003, most countries in Europe that impose Value Added Taxes ("VAT taxes") on certain sales of digital products or services on the Internet or by mail order, ranging from a 17% VAT tax rate in Luxembourg to 27% in Hungary, have required foreign (e.g., American) sellers to collect and pay over those taxes to the appropriate nation.

VAT taxes now apply to sales of digital products to customers in more countries. Effective in 2016 and 2017, foreign (such as U.S.) sellers of digital goods into several more major countries must collect the local value-added tax (VAT) or Goods and Services Taxes, in various countries in Europe, Asia, and elsewhere.

See Chapter 8, Section 8.9 of this edition for rates and other information on these foreign taxes on international digital sales and for information on which countries have newly begun imposing such taxes in 2016 and 2017.


WYOMING BUSINESS CLIMATE OVERVIEW

Wyoming has an exceptionally attractive business climate, in terms of its tax and legal structure. According to the Tax Foundation rankings in 2017 (for 2012, the most recent year for which state tax data is available), Wyoming was tied with South Dakota for second lowest per capita tax burden, as a percentage of per capita income, in the nation. Also, in 2016, the Tax Foundation's State Business Tax Climate Index ranked Wyoming as #1 in the nation, reflecting the fact that Wyoming does not impose any of the following types of taxes that are commonly imposed on businesses and/or their owners in most other states:

  • No personal income tax
  • No corporation income tax
  • No personal property tax on merchants' or manufacturers' inventories
  • No property taxes on intangible property, generally
  • No chain store taxes
  • No real estate transfer or conveyance taxes
  • No gross receipts tax

Starting and operating a business in Wyoming is probably a simpler matter than in any other state in the union, in terms of having the lightest state-imposed burden of taxes and regulatory red tape to be found anywhere, which probably has a great deal to do with Wyoming's vibrant business climate in recent years. Wyoming is blessed with oil, gas, coal, and other natural resources, so that much of its tax revenue comes from non-Wyoming companies that are engaged in extracting such resources.

Like many states, Wyoming does impose a franchise (capital values or license) tax on corporations and other limited liability business entities, plus sales and use taxes, and various excise taxes, with property taxes imposed at the local level. Wyoming was the first state to adopt a limited liability company (LLC) law and has also adopted a limited liability partnership (LLP) law, so that businesses operating in Wyoming in LLC or LLP form may obtain the advantages of limited liability, without incorporating or becoming subject to corporate taxation, generally.

The Wyoming economy has been quite healthy, in terms of the level of unemployment and other economic measures, during the recent shale oil boom. While the Wyoming unemployment rate had risen to 7.5% by February, 2010 after the recent recession, the rate of unemployment in the state fell afterwards to below 4%.

However, as the prices of oil, gas, and coal collapsed since the latter part of 2014, Wyoming was hard hit, and unemployment in the state jumped from 4.2% in May, 2015 to 5.6% in May, 2016, by far the worst increase in joblessness for any state in that 12-month period, when unemployment rates were falling in most parts of the U.S. In 2017, however, the state's economy has recovered rapidly and the Wyoming unemployment rate for September, 2017 was only 4.0%, down sharply from 5.1% a year earlier, slightly below the national jobless rate of 4.2% for September, 2017.

To view the latest federal Bureau of Labor Statistics unemployment rate data for this or any other state, visit this BLS web site:

BLS Local Area Unemployment Statistics
www.bls.gov/web/laus/laumstch.htm

If you wish to do your own legal research, you may do so at the following free web site operated by Lexis:

Online Wyoming Code (Annotated)
http://michie.lexisnexis.com/wyoming/lpext.dll?f=templates&fn=main-h.htm

II. LEGAL ENTITIES -- FILING FEES AND REPORTING REQUIREMENTS.

(a) In General. A business that operates in Wyoming can do so as a sole proprietorship, a general or limited partnership, a corporation, or a limited liability company (LLC). A corporation may also elect S corporation status for federal income tax purposes, but this will not be relevant for Wyoming tax purposes, since there is no Wyoming individual or corporation income tax.

Wyoming law also provides for limited liability partnerships (LLPs), in which no partner is liable for certain debts of the partnership, somewhat like a corporation or LLC, but with fewer legal formalities than are required for either a corporation or an LLC.

Each of the above entities is discussed below, along with the basic requirements for forming such an entity and any general ongoing (non-tax) reporting requirements that are applicable to it. The tax treatment of each form of legal entity is discussed in Section IV below.

(b) Sole Proprietorships. In general, sole proprietorships in Wyoming can be established with no formalities. However, as discussed in Section IV(b), it may be necessary to obtain some type of state license, and, in addition, it will almost always be necessary for any business to obtain one or more local business licenses from cities or counties in which it will operate. In addition, if you sell any kind of tangible personal property at retail or provide certain types of services, you may be required to obtain a sales tax license and collect sales tax, as discussed in Section IV(d).

No separate tax form filing is required, generally, for a sole proprietorship, under the Wyoming income tax law. Instead, you simply report the net income or loss from your sole proprietorship on Schedule C of your federal Form 1040, individual income tax return. Since the state of Wyoming does not impose any state income tax, you will not need to be concerned with filing state income tax returns with Wyoming or with paying any state income tax on your sole proprietorship earnings in Wyoming.

Doing business as a sole proprietor in Wyoming is generally much simpler than operating as any other kind of business legal entity. As a sole proprietor, if you have no employees, you are also not required to pay any unemployment taxes, withhold any federal income tax from wages, nor obtain workers' compensation coverage for yourself.

(c) Partnerships. Wyoming's partnership laws allow creation of either a general partnership, in which all partners are liable for the debts of the business, or a limited partnership, in which only the general partners are liable for debts, while the liability of limited partners is limited to the amount they have invested, usually. State law also allows for the creation of a limited liability partnership, in which no partner has personal liability (subject to certain exceptions).

As is discussed in Section IV(b), it may be necessary to obtain some type of state license, and, in almost all cases, it will be necessary for any partnership to register for one or more local business licenses from the cities or counties in which it will do business. Also, with very few exceptions, partnerships that have employees will have to register for, and pay, state unemployment tax on wages paid, as discussed in Section V(b).

There is no personal income tax in Wyoming, so the income of a partnership is not taxed to the individual partners for state income tax purposes. Thus, partnerships are not required to file any income tax returns with the state. However, all limited partnerships and LLPs are subject to the license tax on capital, which is imposed at the same rate as for corporations or limited liability companies.

A partnership agreement, for any type of partnership, should spell out in considerable detail such matters as the following:

  • How much and what kind of property will each partner contribute to the partnership?
  • What value will be placed on the contributed property?
  • How will profits and losses be divided among the partners?
  • How will gain or loss be allocated for tax purposes on property contributed to the partnership by one or more of the partners, where such property has a tax basis significantly greater or less than its agreed value?
  • Will the partnership make an Internal Revenue Code Section 754 election to make special basis adjustments to assets when a partner buys a partnership interest or dies, or when the partnership distributes assets to a partner? (Such an election can be very beneficial for the partner in question or for his or her estate, but once made, the election cannot be revoked without IRS approval. Where a number of events requiring the special basis adjustments occur over a period of years, the tax accounting for the partnership can eventually become grotesquely complicated and extremely difficult to do correctly, unless the partnership is able to retain some exceptionally bright accounting talent to make the necessary tax accounting adjustments.)
  • When and how will profits be withdrawn from the partnership?
  • How will certain partners be compensated for their services to the partnership (if at all)?
  • How will partners be compensated for making capital available to the partnership?
  • How will changes in ownership of interests in the partnership be handled?
  • When will the partnership terminate its existence?
  • How will the assets and liabilities of the partnership be handled when the partnership is terminated?

GENERAL PARTNERSHIPS

As a rule, general partnerships in Wyoming can be formed with no formalities, although it is highly advisable to have a written partnership agreement. However, as discussed in Section IV(b), it may be necessary to obtain some type of state license, and, in addition, it will almost always be necessary for any business to have one or more local business licenses from cities or counties in which it operates.

In addition, any partnership or other business that has employees will generally have to register for, and pay, state unemployment tax on wages paid, as discussed in Section V(b). No state income tax withholding on employees' wages is required, since there is no state income tax in Wyoming.

There are no specific filing requirements that apply to general partnerships under Wyoming state law. However, a general partnership may file a statement of partnership authority with the secretary of state, designating which partners in the partnership have the authority to enter into specified types of transactions, such as real estate transactions. A $10 filing fee is charged by the Wyoming Secretary of State for filing an (optional) statement of partnership authority. A statement of partnership authority expires five years after the date it was filed, or the date it was most recently amended.

PLANNING POINT:
While a general partnership lacks the advantage of limited liability for its partners, it is not subject to the annual Wyoming franchise (license) tax on assets and capital that applies to all limited liability entities (unless it elects to be a registered limited liability partnership).

LIMITED PARTNERSHIPS

A limited partnership, in which there is at least one general partner (who is liable for partnership debts) and at least one limited partner (who is not liable for partnership debts), may also be formed under Wyoming law. Unlike a general partnership, a limited partnership must generally have a written partnership agreement, and must file a certificate of limited partnership with the secretary of state, together with a $100 filing fee.

Foreign limited partnerships must also register before being allowed to do business in Wyoming, and must pay a registration fee that is the same as for a domestic limited partnership.

Both domestic and foreign limited partnerships are required to pay an annual license tax which is the same as the corporation license tax: $.0002 per $1.00 of capital employed in Wyoming, or a minimum tax of $50.

For information on limited partnership filing requirements, see the contact information for the offices of the Wyoming Secretary of State, listed in Section VI(a).
 

LIMITED LIABILITY PARTNERSHIPS

Limited liability partnerships (LLPs) are a relatively new form of partnership permitted under the laws of Wyoming. Like an LLC, an LLP provides limited liability for its owners, while retaining the tax advantages of a partnership for federal income tax purposes. However, unlike an LLC, an LLP typically operates like a regular partnership, and is not required to file articles of organization.

Partners in a general partnership can obtain a significant degree of limited liability by simply registering the partnership with the state as an LLP. However, becoming an LLP will not affect the liability of a partner in an LLP for his or her own omissions, negligence, wrongful acts, misconduct or malpractice or that of any person under his or her direct supervision and control.

To form an LLP in Wyoming, you must register with and pay a filing fee of $100 to the secretary of state. Foreign LLPs, those created under the laws of another state, must register with the secretary of state and pay a fee of $100.

Every registered LLP doing business in Wyoming, including both domestic and foreign LLPs, must file an annual renewal and pay an annual fee that is the same as the corporation license tax: $.0002 per $1.00 of capital employed in Wyoming, or a minimum tax of $50.

To let people who engage in transactions with the LLP know that they are dealing with a limited liability entity, an LLP's name must end with the words or letters "Registered Limited Liability Partnership", "Limited Liability Partnership", "R.L.L.P.", "L.L.P.", "RLLP", or "LLP".

For more information on LLP registration and reporting requirements, see the contact information for the offices of the secretary of state, listed in Section VI(a).

Note that one potential drawback of LLPs, if you will do business in other states besides Wyoming, is that you may not enjoy limited liability with regard to creditors of the LLP if you do business in some such states. Some states, namely California and New York, only recognize certain types of professional partnerships as LLPs. Such other states may simply treat your LLP like an ordinary general partnership, with no limitation of liability.

(d) Corporations. To form a corporation in Wyoming, you must file articles of incorporation with the Wyoming Secretary of State and pay a fee of $100. A foreign corporation (one formed under the laws of another state or a foreign country), must obtain a certificate of authority before it may legally conduct business in Wyoming, by filing an application for a certificate of authority and paying a filing fee of $100. Fees are set by the secretary of state.

For more information on filing articles of incorporation or applying for a certificate of authority to do business in Wyoming, see the contact information for the offices of the secretary of state, listed in Section VI(a).

In addition, once your corporation is formed, it will be required to file annual reports and pay an annual license fee based on its capital each year. Failure to file this report on a timely basis could result in suspension or revocation of your corporation's charter. The license tax is computed based on the value of the corporation's assets located and employed in the state, at a rate of $.0002 per $1 of such assets. There is a minimum annual tax of $50.

While corporations, other than S corporations, must pay federal income taxes on their taxable income, and must also pay the annual Wyoming corporation license tax, there is no state corporation income tax in Wyoming.

CAUTION:
There are significant negative consequences for any foreign corporation or LLC that does business in Wyoming without obtaining a certificate of authority to do business in the state. These include the inability to sue in Wyoming's courts, a fine of $5,000, reasonable audit fees and attorney's fees, and payment of all taxes and license fees that should have been paid by the corporation since it began doing business in Wyoming, plus interest at 18% per annum!

For forms and more information on corporate license taxes in Wyoming, see the contact information for the offices of the secretary of state, listed in Section VI(a).

(e) S Corporations. An S corporation is simply a regular corporation that has elected, for federal or state income tax purposes, or for both, to be taxed somewhat like a partnership, with its income, losses and tax credits flowing through to its owners, who report such income, losses, or credits on their individual tax returns.

Since there is no individual or corporate income tax in Wyoming, the existence of a federal S corporation election is not relevant for state income tax purposes in Wyoming. Like any other corporation, an S corporation is subject to the annual Wyoming license tax or fee equal to $.0002 per $1 of assets and capital employed in the state, or a $50 minimum tax, if greater.

(f) Limited Liability Companies. Wyoming was the first state in the U.S. to adopt a limited liability company (LLC) law, back in 1977, which led to adoption of similar LLC laws in all 50 states and the District of Columbia over the next 20 years. Thus, in addition to the traditional choices of a sole proprietorship, partnership, or corporation, a business that operates in Wyoming may also choose to operate in the form of an LLC. In most states, including Wyoming, LLCs are very attractive legal entities for many small businesses, in that they offer the same protection as a corporation from creditors for debts of the business, while offering much of the flexibility plus the flow-through tax treatment of a partnership for federal tax purposes.

See the section on LLC taxation for a discussion of the tax treatment of LLCs under Wyoming tax laws.

To form an LLC under the laws of Wyoming, one or more persons must file articles of organization with the secretary of state and pay a $100 filing fee.

While Wyoming state law at one time generally required an LLC to have at least two members and that the LLC have a limited period of existence (30 years), those provisions have been repealed, so that now a single-member LLC is permitted and an LLC can exist indefinitely, until it is terminated by the members or operation of law. Single-owner LLCs now qualify for treatment as sole proprietorships or "disregarded entities" for federal income tax purposes.

Foreign LLCs, those formed under the laws of another state, must obtain a certificate of authority to do business in Wyoming, by filing an application for a certificate of authority with the secretary of state and paying a filing fee that is the same as for a domestic LLC, as described above.

In addition to initial filing fees, any LLC formed in Wyoming or any foreign LLC is also required to pay an annual license fee or tax. The annual fee is $.0002 per dollar of capital and is imposed on the total of capital, property and assets employed by an LLC in Wyoming, with a minimum annual fee of $50. This is the same fee that is imposed on corporations, limited partnerships, and limited liability partnerships (LLPs), but which is not imposed on an individual sole proprietor or a general partnership that is not an LLP.

IMPORTANT NOTE RE LLC FORMATION:
If you need help setting up an LLC in Wyoming, or any other state, there are firms such as, for example, Northwest Registered Agent LLC, which will handle the entire process of creating an LLC for you very inexpensively, for a flat fee of $100. (Of course, you will still owe the required filing fees that are payable to the Wyoming Secretary of State when forming an LLC in Wyoming.) For details on this economical way of setting up an LLC and protecting yourself from unlimited liability, see www.roninsoft.com/LLC/nw_regagent.htm.

(Or, even if you draw up your own LLC documents, you may need a "registered agent" for your LLC in any state in which you do business but don't have offices. In that case, Northwest Registered Agent LLC will review your LLC documents at no charge before you file them, if you retain them as your registered agent, for $125 a year or less.)

For more information on filing articles of organization for an LLC, see the contact information for the offices of the secretary of state, listed in Section VI(a).


III. BUSINESS ACQUISITIONS

(a) In General. When acquiring an existing business, there are a number of state legal and tax issues you or, preferably, your business attorney, should attend to before closing the purchase. These include matters such as doing a title search for any real property that is being acquired, checking for any recorded security interests on personal property items, and thoroughly researching county, state, and federal records for any judgment liens, tax liens, or other liens, before property is acquired.

You will also benefit from consulting a tax advisor before the agreement of sale is negotiated, in order to seek a structuring of the agreement so that the purchase price is allocated among the assets in a way that favors you. You may be able to obtain considerable tax savings if the purchase price is allocated in a way that gives you the best possible tax results under federal income tax laws, and under other state tax laws, such as sales/use tax or property tax laws.

EXAMPLE:
Tangible personal property transferred in the sale of a business entity is not subject to Wyoming sales tax when all the following conditions are met:
  • The business transfer involves the sale of all or not less than 80% of the value of all of the business entity's assets located in Wyoming;
  • The buyer continues to use the acquired tangible personal property in the operation of an ongoing business in Wyoming; and
  • The seller paid sales tax directly or indirectly when it originally acquired the tangible personal property that is included in the sale of the business.

Accordingly, if you are acquiring an existing business and can comply with the above sales tax law requirements, it may be beneficial in some cases to allocate more of the purchase price to such tangible personal property (such as furniture, equipment, and machinery) and less to assets that are not depreciable (such as land), or that can only be depreciated or amortized over long periods of time (such as real property improvements or intangible assets like goodwill or customer lists).

Depending upon the state (or states) in which the seller's assets are located, you may also have to comply with state bulk sale or bulk transfer laws. You should also obtain tax releases from various state taxing agencies, as discussed below.

(b) Bulk Sale Laws. Typically bulk sale laws require either publication of legal notices to all creditors in advance of the sale and recording of such notices in some cases, or maintenance of detailed lists of the property to be transferred, for inspection by the public.

Wyoming is one of the business-friendly states that has repealed its bulk sale laws, so you no longer have to be concerned with this legal requirement when buying a business in Wyoming.

(c) Tax Releases. When you acquire an existing business, you will want to make sure that you do not unwittingly become liable for any unpaid taxes owed by the seller. Typically, to protect yourself, you will need to receive a tax release or releases from various state taxing agencies, for such taxes as sales and use tax, income tax withholding, and state unemployment taxes, in each state in which the seller does business. If you fail to obtain such a release or written statement from the tax agency that the seller is not delinquent on any tax payments, you will be held responsible for such tax if it is not withheld from the purchase price proceeds and paid to the state at the time the sale of the business transpires.

In Wyoming, you should obtain tax releases for unemployment taxes of the seller from the Employer Accounts Section of the Wyoming Department of Workforce Services, and for sales and use taxes from the Department of Revenue, before completing the business purchase. You must withhold any sales tax owed the state from the purchase price you pay to the seller or you will be liable for the seller's unpaid tax, unless you have received a certificate of no tax due. The seller must file a final sales tax return within 30 days after the sale closes.

You do not have to be concerned with becoming liable for any state income tax withheld from employees' wages that the seller failed to pay over to the state, since there is no state income tax in Wyoming and thus no such withheld state tax.

(d) Unemployment Tax Rating of Seller. In addition to obtaining tax releases, you may find it advantageous to succeed to the seller's unemployment tax experience rating, if the seller has a tax rate lower than you would otherwise obtain as a new business. In Wyoming, a new employer who acquires an existing employer will automatically succeed to the seller's experience rating as a successor employer. If you, as acquirer, are already an employer, your experience rating will be merged with that of the seller and a new composite tax rate will be determined by the Department of Workforce Services. For more information on succeeding to a seller's unemployment tax experience rating, contact the Employer Accounts Section of the Department of Workforce Services.

PLANNING POINT:
Besides possibly obtaining a lower unemployment tax rate and experience rating, another clear advantage of being treated as a successor employer is that you may take into account wages already paid to the acquired employees by the former employer during the year of the acquisition. Thus, you will not have to pay tax on the amount of wages paid to an employee in that year by the former employer, who will have already paid unemployment tax on such wages, for which you may take credit, in determining the amount of tax owed on total wages paid to that employee for the year.
EXAMPLE:
Employee X has already earned wages equal to or exceeding the current year taxable wage base amount, while employed by the former employer, on which the former employer has paid the unemployment tax. Thus, if you qualify as a successor employer, your business would not incur any unemployment tax on wages you pay to Employee X for the remainder of the year of the business acquisition.


IV. WYOMING TAXES AND OTHER GENERAL REQUIREMENTS.

(a) In General. Wyoming has some of the fewest and least intrusive business regulations of any state, which makes it a very attractive place to start or operate a business. It is one of only four states (along with Nevada, South Dakota and Washington) that has neither an individual nor a corporate income tax. It also has no property tax on intangible assets or business inventories and is one of the few states without a transfer tax on real estate conveyances or recordation of deeds.

It also has the lowest state minimum wage rate (along with Georgia), $5.15 an hour, of any state that has a minimum wage law; workers' compensation is optional, except for "extra-hazardous industries" (rather broadly defined); and Wyoming also has a right-to-work law.

In the Tax Foundation's study of 2012 state and local tax burdens, as a percentage of per capita income, Wyoming was tied with South Dakota as having the second lowest tax burden among the states, at 7.1% of per capita income, compared to a national average of 9.9% and to New York's 12.7% tax burden, and 12.6% in Connecticut. Only Alaska, at 6.5%, had a lower tax burden than Wyoming.

For state tax forms and tax information, see the contact information for the Wyoming Department of Revenue in Section VI(a).

(b) State and Local Licensing. Nearly any business, operated anywhere in the United States, will have to have at least one government license of some kind. In most cases, this will be a local license, issued by your city or county. Before you open your business, contact your local city or county hall and find out if your particular business needs one or more local licenses. Most kinds of local business licenses are granted upon payment of a fee, with no further requirements, except possibly for annual or other periodic renewal fees.

However, if you are engaging in any kind of food business, you will usually need to also obtain a health department permit and show that you are in compliance with health department food-handling requirements. Secondly, be sure to check with an attorney or local government zoning or planning department officials to determine if your business will be in compliance with all local zoning and planning restrictions. If you own or rent any type of facility, you will generally need fire department permits, showing that you meet fire safety codes and, of course, any construction or improvements to an existing structure will almost always require a building permit.

Even if you intend to simply operate your business from your home, you may be in violation of local zoning requirements, but this is less likely to be a concern if you don't have clients, customers, suppliers, or employees coming to your house on business on a regular basis.
 

STATE LICENSES

State governments have traditionally required special licenses for many kinds of professionals, such as physicians, dentists, lawyers, and accountants. To further protect consumers, Wyoming has expanded the list of occupations that must be licensed by the state to include many other occupations. Most state licenses not only require payment of fees, but are only issued for a given profession or occupation upon showing that you have completed certain educational or experience requirements, or passed certain tests, or some combination of the foregoing.

Some of the businesses, professions, and occupations that require state licenses in Wyoming include those in the following partial list:

  • Accountants
  • Aerial horse hunting, prospecting or spraying
  • Aeronautics
  • Agricultural commodities
  • Alcoholic beverages
  • Animals-carcass disposal, feeders, garbage
  • Architects
  • Auctioneers
  • Barbers
  • Boxing exhibitions
  • Carnivals
  • Cattle
  • Child care facilities
  • Cigarettes
  • Circuses
  • Collection agencies
  • Commercial feedstuffs
  • Commercial fertilizers
  • Contractors, electrical
  • Cosmetologists
  • Dairy products
  • Dentists and dental hygienists
  • Economic poisons
  • Eggs
  • Electricians
  • Employment agencies
  • Engineers and surveyors
  • Fish and game
  • Funeral directors
  • Grain dealer
  • Horse racing
  • Hospitals
  • Insurance_agents, brokers, rating organizations
  • Junkyards
  • Livestock brands, inspection, remedies, sales rings
  • Meat peddlers, processing, slaughtering
  • Merchants (itinerant, transient)
  • Mining
  • Motor boats
  • Motor clubs
  • Nursery stock
  • Nurses
  • Nursing homes and_administrators
  • Optometry
  • Peddlers
  • Pesticides
  • Pharmacies
  • Pharmacists
  • Physical therapists
  • Physicians
  • Private schools
  • Psychologists
  • Real estate brokers and real estate salespersons
  • Sales financing
  • Seed dealers
  • Sheep and lambs
  • Slaughtering, meat processing
  • Small loan business
  • Taxidermists
  • Veterinarians
  • Weather modification

If your business will be selling good or services that are subject to sales tax, you will need to register with the Wyoming Department of Revenue for a sales tax license. You can download a copy of the Sales/Use Tax License Application from the Department of Revenue website. To do so, see then link to that website in Section VI(c). There is a $60 license application fee for each place of business in the state, but this is a one-time fee.

Employers subject to the Wyoming unemployment tax are required to register with the Employment Tax Division of the Wyoming Department of Workforce Services on the Wyoming Joint Business Registration Form. This form also will serve as your registration for workers' compensation insurance. For more information on state unemployment tax, see Section V(b) and for more on Wyoming workers' compensation requirements for employers, see Section V(c).

For assistance with state licensing and business registration requirements in Wyoming, see the contact information for the offices of the Wyoming Business Council, listed in Section VI(a).

IMPORTANT NOTE:
An important state requirement, other than taxes and licenses, that may apply to a significant number of businesses, is the Wyoming "No-Call" law. This law applies to any business that makes more than 225 unsolicited phone calls to Wyoming residents in a year. The law applies only to telemarketing calls and does not apply to phone calls to existing customers or calls made to persons in connection with existing debts or contracts.

The Wyoming "No-Call" law's requirements include the following:

  • Businesses subject to the law must register with the Wyoming Attorney General's office, by filing a form with the Attorney General, the Notice of Intent to Engage in Telephone Solicitation and Designation of Agent for Service of Process;
  • Calls may not be made to persons whose Wyoming telephone numbers are listed on the Direct Marketing Association's "Do-Not-Call" list;
  • Calls may not be made before 8:00 a.m. or after 8:00 p.m. local time at the consumer's location;
  • Unsolicited calls may not be made to any unpublished cellular telephone number;
  • Disclosure requirements apply, which require a telemarketer to disclose the nature of the call, who is calling, and certain other information at the beginning of the phone call; and
  • Limits are imposed on the use of automated telemarketing technology for the selection or dialing of numbers or the playing of recorded messages when a connection is completed.

Effective since July 1, 2010, a telephone solicitor or merchant may not willfully make any unsolicited telephone sales calls to unpublished cellular phone numbers.

For more information on the Wyoming telemarketing laws, contact the office of the Wyoming Attorney General, at the link for the Attorney General website, listed in Section VI(c).

(c) Income and Franchise Taxes. Wyoming is one of only four states that does not have either a corporate or individual income tax. However, corporations and other limited liability entities (LLCs, LLPs, LLLPs and limited partnerships) are subject to an annual franchise (license) tax based on capital employed in the state, which is equal to $.0002 (.02 of one cent) per $1 of such capital, with a minimum annual tax of $50.
 

TAXATION OF SOLE PROPRIETORS

Because there is no state income tax in Wyoming, the income of a sole proprietorship is not subject to state income taxes in Wyoming. Wyoming is one of only a few states that has no income tax on individuals, corporations, or other entities. Unlike limited liability entities (corporations, LLCs, limited partnerships, and LLPs), a sole proprietorship is not subject to the state's annual franchise (license) tax on business capital.
 

TAXATION OF PARTNERSHIPS

Because there is no state income tax in Wyoming, the income of an individual, corporation, or partnership is not subject to state income taxes in Wyoming, at either the entity level or the partner level. However, limited partnerships, limited liability partnerships (LLPs) and limited liability limited partnerships (LLLPs) are subject to the same annual license tax that applies to corporations and LLCs, of $.0002 per $1 of capital employed in Wyoming, or $50, whichever is greater. However, a general partnership that has not registered to become an LLP is not subject to the state's franchise (license) tax on business capital.
 

TAXATION OF CORPORATIONS

There is no corporate income tax in Wyoming. However, corporations are subject to an annual franchise (license) tax based on capital employed in the state, which is equal to $.0002 (.02 of one cent) per $1 of such capital, with a minimum annual tax of $50.
 

TAXATION OF S CORPORATIONS

There is no corporate income tax in Wyoming. However, all corporations, including S corporations, are subject to an annual franchise (license) tax based on capital employed in the state, which is equal to $.0002 (.02 of one cent) per $1 of such capital, with a minimum annual tax of $50.

While S corporation shareholders are subject to federal income tax on their share of the taxable income of the S corporation, there is no Wyoming individual income tax, so the income of an S corporation is not taxed by the state of Wyoming at all -- at either the corporate level or the shareholder level.
 

TAXATION OF LIMITED LIABILITY COMPANIES

Since there is no state income tax in Wyoming, the income of an LLC is not taxable at either the LLC level or to the LLC members, for Wyoming tax purposes. However, LLCs and all other limited liability legal entities are subject to an annual franchise (license) tax based on capital employed in the state, which is equal to $.0002 (.02 of one cent) per $1.00 of such capital, with a minimum annual tax of $50.

(d) Sales and Use Tax. Wyoming imposes a general sales tax on retail sales of tangible personal property and certain types of services at the statewide rate of 4%.

Sales tax only applies to a few specified types of services, such as transient lodging, restaurant sales or cover charges at any place where meals are regularly served to the public, admissions to amusement or sporting events, and services performed for the repair, alteration, or improvement of tangible personal property, such as auto or computer repairs. Other taxable services include taxidermy, dry cleaning, car detailing and photography.

Transient lodging is defined as room rentals of less than 30 days and may also be subject to local lodging taxes, at varying rates. Lodging rentals for 30 days or more are not subject to sales tax.

An additional 4% tax surcharge applies to auto rentals for periods of 31 days or less.

Effective since July 1, 2013, all gratuities (tips) offered by a customer or invoiced by the seller are exempted from sales tax. This exemption originally applied to restaurant employees who received tips, but was expanded as of July 1, 2014 to also exempt tips paid to workers in other occupations, such as valet parking attendants or car wash workers, for example.

In addition to the state sales tax, county governments are allowed to adopt local sales taxes, at varying tax rates up to 4%, but which are generally 1% or 2%, and most counties do so. A number of localities also impose additional lodging industry taxes, at rates of up to 4%. The state Department of Revenue collects and administers both the state and local sales and use taxes. The combined sales and use tax rate in Laramie and Sheridan Counties and several other counties is 6%, but is 5% in most counties, as of November, 2017. Combined lodging and sales tax rates are as high as 10% in four counties (Laramie, Albany, Hot Springs and Weston counties) and in the city of Sheridan in Sheridan County.

Sellers are required to obtain a sales tax license and to collect and pay over the state and local sales and use taxes to the Department of Revenue. Apply for a sales tax license on Form ETS 001, Sales/Use Tax License Application. There is a $60 license application fee for each place of business, which is non-refundable. This is a one-time fee, and a license does not have to be renewed.

For vendors who collect over $150 of sales tax per month, monthly sales tax returns must be filed. Those who collect $150 or less per month file quarterly returns or may be allowed to file an annual return. Returns are due by the last day of the month that follows the end of the monthly, quarterly, or annual reporting period.

PLANNING POINT:
Pay your sales tax early! If you do so, by the 15th day of the month instead of at the end of the month when the tax is due, you are allowed a tax credit, to defray some of the costs of compliance, of 1.95% of the first $6,250 of tax collected for the period, plus 1% of the excess over $6,250, but with a maximum credit of $500 for any tax return period.

There are numerous exemptions from the sales tax, the most important of which is the resale exemption. If you are a wholesaler or retailer who purchases goods that you will resell, your purchase of such goods may qualify as an exempt sale for resale. Similarly, if you sell goods to wholesalers or retailers for resale by them, your sale may also qualify as an exempt sale for resale. In any such transaction, the exemption is ordinarily available only if the purchaser gives the seller a valid resale certificate, certifying that the items are being purchased for resale, and not for use or consumption by the buyer.

Other major types of exemptions include the following:

  • Sales to federal, state, or local government entities;
  • Sales to religious or charitable organizations (but require a revenue identification number issued by the Department of Revenue, in addition to the Exemption Certificate);
  • Custom software, that is designed and developed to the specifications of a specific purchaser ("pre-written software" is taxable);
  • Sales of farm implements;
  • Sales of livestock, feed for livestock, or poultry for marketing services, and seeds, roots, bulbs, small plants and fertilizer planted or applied to land, the products of which are to be sold; and
  • Sale of a business, provided that at least 80% of all the assets of the seller located in Wyoming are sold, the buyer will continue to use the tangible personal property in an ongoing business in the state, and the seller directly or indirectly must have paid sales tax on any tangible personal property involved in the sale.

In addition, effective July 1, 2004, a new use tax exemption was enacted, effective until December 31, 2010, for the purchase or lease of machinery and machine tools used in manufacturing. The exemption applies only to a manufacturer classified by the Department of Revenue under the NAICS code manufacturing sector 31 - 33. (NAICS is the North American Industry Classification System, which was developed jointly by the U.S., Canada, and Mexico to provide new comparability in statistics about business activity across North America.) This exemption was extended initially until December 31, 2011, and extended again to December 31, 2017 and again to December 31, 2027.

UPDATE NOTE:
Under legislation that became effective on July 1, 2015, the lease or rental of tangible property between a corporation and an 80%-owned (or more) subsidiary is exempted from sales and use tax, as are such transactions between other affiliated businesses that are owned in similar percentages by the same persons.

A shadow tax, the use tax, is imposed at the same rate as the sales tax. It is primarily intended to tax property that is acquired from sources outside of the state, in transactions not subject to sales tax, when such property is used or consumed within Wyoming. Use tax may also apply to items purchased on an exempt basis, such as for resale, if such items end up being used or consumed, instead of being resold.

In 2006, Wyoming amended its sales and use tax law to exempt sales of food for domestic home consumption. The exemption applies to substances, whether liquid, concentrated, solid, frozen, dried, or in dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. The exemption was to apply for only two years, until July 1, 2008, but was made permanent by act of the Wyoming legislature in the 2007 session.

IMPORTANT NOTE:
Effective January 1, 2008, Wyoming became a full member of the Streamlined Sales Tax Project (SSTP) and conformed its laws on sourcing of transactions (for determining which local tax rate applies) to the SSTP standards. This means, generally, that the applicable tax rate will be that of the locality where the product is delivered, except when sales are made at the seller's place of business, such as a retail store. If neither of those conditions apply, the seller is required to charge sales tax according to the buyer's address; and if that is not available, according to the address where the item was shipped from.

For more information on Wyoming sales and use tax registration and compliance, see contact information for the offices of the Department of Revenue in Section VI(a).

(e) Real and Personal Property Taxes. In Wyoming, as in every other state, any business real estate you own will be subject to real property taxes. In general, there is little that you must do, unless you wish to challenge your assessed valuation, since the assessor will bill you for each year's property taxes as they come due.

Wyoming localities also impose personal property taxes on tangible personal property. ("Personal property" is any kind of property that is not real estate.) However, certain types of business personal property, such as business inventories, are exempt from personal property tax in Wyoming.

While Wyoming generally taxes tangible personal property, it does not impose a property tax on intangible personal property, such as stocks, bonds, promissory notes, and other such paper assets, but does not exempt intangible real property such as mineral rights, leasehold interests, water rights and reservoir rights.

(f) Other Business Taxes. Wyoming imposes a number of excise and other taxes on businesses, some of which may affect you. These include:

  • Taxes on alcoholic beverages;
  • Cigarette and tobacco products taxes;
  • Gasoline and other fuel taxes;
  • Motor vehicle registration taxes and fees;
  • Severance taxes on natural resources (mineral rights and water rights are also subject to personal property tax); and
  • Various other taxes on special kinds of businesses, such as insurance companies and utility companies.

Wyoming is one of only a few states that does not impose a tax on real estate mortgages or conveyances. It does nominally impose an inheritance tax, equal to the allowable federal estate tax credit for state death taxes, but since that credit (in 2017) is currently zero, the Wyoming inheritance tax does not currently have any application. However, this may change at some future date, since in 2013 Congress made the temporary elimination of the federal death tax credit permanent, so Wyoming may eventually do as several other states have done, by making the state's "pick-up" tax equal to what the federal death tax credit was before it was reduced and eliminated by Congress.

(g) Trade Names. A trade name, also known as a fictitious or assumed name, is any name used in the course of business that does not include the actual legal names of all the owners of the business. Thus, if your business goes by any name other than your own real name, it is operating under a trade name. The same is true of a corporation, if it operates under a name other than its legal name. A trade name might also be one that suggests the existence of additional owners, by using such words as "company," "associates," or "group."

In most states where you do business, it will be necessary to register a trade, fictitious, or assumed name, so that people who do business with you can find out who the actual owners of your business are. You may also want to register any such trade name, as a means of protecting against other companies usurping that particular trade name.

Wyoming law does not require you to register your trade name, but you may wish to protect your exclusive use of the trade name by registering it with the Wyoming Secretary of State's office.


V. EMPLOYER REQUIREMENTS IF YOU HAVE EMPLOYEES

(a) Employer Registration and Withholding. Once you hire the first employee in your business, you must comply with many more Federal and state laws. One of the first things you will need to be concerned about as a new employer is withholding personal income taxes from the wages of your employees. As an employer, you are responsible for withholding the taxes and paying them over to the government on behalf of the employee.

If you have any employees, you will have to withhold federal income tax and FICA taxes from their wages. However, since Wyoming has no state income tax, you will not need to be concerned with any obligation to withhold state income tax from wages paid, but if you pay more than a minimal amount of wages, you will most likely be required to pay state unemployment tax. If so, you will have to register with the state as an employer for unemployment tax purposes, as described in Section V(b).

(b) Unemployment and Other State Payroll Taxes. If your business has one or more employees, except for certain small agricultural employers or employers of domestic servants, you, as an employer, will be required to pay state unemployment tax based on the amount of such wages paid.

Employers subject to the Wyoming unemployment tax are required to register with the Employment Tax Division of the Wyoming Department of Workforce Services on the Wyoming Joint Business Registration Form. This form also will serve as your registration for workers' compensation insurance.

New employers are required to pay tax at a rate that varies by industry in 2017 on the first $25,400 of wages paid to each employee (down slightly from $25,500 in 2016).

After you have had employees for a while, you will develop an unemployment tax experience rating. This rating is based on the number of employees you terminate who then claim unemployment benefits and the amount of such benefits paid to those former employees, under complex formulas. The state will inform you when they have assigned you an individual tax rate based on your firm's experience rating. That rate may be higher or, if you have had relatively few benefit claims charged to your account, lower than the standard new employer tax rate you initially were paying. For 2017, the minimum tax rate for any experience-rated employer is 0.34% and the maximum is 8.84%.

All state unemployment taxes are imposed upon you as the employer, and, under Wyoming law, cannot be charged to your employees or withheld from their wages. Employers are required to display posters in the workplace, notifying workers of their rights to unemployment benefits.

For more information on your Wyoming unemployment tax obligations as an employer, see the contact information for the offices of the Employer Services, Employment Tax Division, of the Wyoming Department of Workforce Services, listed in Section VI(a).

(c) Workers' Compensation. In Wyoming, only businesses involved in "extra-hazardous employment" with one or more employees are required by law to have workers' compensation insurance. The definition of "extra-hazardous" applies to a wide range of businesses, however, including not only industries such as mining, manufacturing, utilities, and transportation, but also many types of industries that you might not consider to be very hazardous, such as many types of wholesale and retail businesses, hotels, restaurants, bakeries, and many types of service businesses. Thus, as a practical matter, most kinds of businesses, with relatively few exceptions, are subject to the Wyoming workers' compensation law requirements.

Most employers are required to establish a Workers' Compensation account before hiring employees in Wyoming. Those employers who are not required to be covered may choose to cover their employees, but must opt to cover all of their workers, if choosing to cover any. Account applications may be obtained from any office of the Workers' Safety and Compensation Division (WSCD) of the Wyoming Department of Workforce Services. Register on the Wyoming Joint Business Registration Form. This form also will serve as your registration for unemployment compensation insurance. You may also register for both workers' compensation and unemployment compensation (tax) on the website of the Department of Workforce Services (see Section VI(c)).

Note that a sole proprietor, a partner in a partnership, or a member (owner) of a limited liability company is generally not considered an employee. An employee of a corporation who is a corporate officer is not required to be covered, but may elect coverage under the workers' compensation law.

Sole proprietors, partnerships, LLCs, or corporations may elect coverage for any or all of their owners or corporate officers, but if they do so, they must also elect coverage for all their other employees.

CAUTION:
Don't make the mistake of thinking you can pay employees at the $5.15 an hour Wyoming minimum wage. If employees are covered by the federal minimum wage law, as is almost always the case, you must pay the (higher) federal minimum wage, currently $7.25 an hour since July 24, 2009.

Private employers are not generally required to pay overtime premium pay under Wyoming state law, but must do so at a rate of time-and-a-half, for hours worked in excess of 40 hours a week, if subject to the federal wage-hour laws.

Note that, as under federal wage-hour laws, certain classes of executive, administrative, and professional employees are exempted from the Wyoming wage-hour rules, as are outside salespersons who are paid solely on a commission basis.
 

STATE CHILD LABOR LAWS

In addition to wage-hour laws, most businesses are subject to federal child labor laws, which put numerous restrictions on the working hours and kinds of work in which minors under the age of 18 may engage. Your business must also be cognizant of similar state child labor laws, in Wyoming.

While the Wyoming child labor laws may apply when federal laws do not, the Wyoming child labor rules are generally less strict than the federal laws and regulations. For example Wyoming state child labor laws do not impose any limits on the hours that children 16 years of age or older may work, unlike federal laws.

Children of age 14 or 15 may be employed, but not in heavy construction, any kind of work involving explosives, or in other occupations declared hazardous by the Wyoming Department of Workforce Services. Children who are 14 or 15 years old may work in non-hazardous employments, but only if they meet the following requirements:

  • Proof of age is required (such as a properly completed federal Form I-9);
  • They may not work during school hours;
  • They may not work more than 8 hours in a 12-hour period; and
  • They may not work before 5:00 a.m. or after 10:00 p.m. on days followed by school (or after midnight on days not followed by school).
Children between the ages of 14 and 16 who are not enrolled in school may work any 8 hours between 5:00 a.m. and midnight of any one day. However, children under age 16 may work during hours when they should be in school.

Recent child labor law changes now permit 14- and 15-year-olds to work at places such as banks, insurance companies, advertising agencies and information technology firms, as well as in retail, food service, and gasoline service establishments. However, there are also new prohibitions for such children, against working as "youth peddlers" (doing sales outside the place of employment), riding outside the passenger compartment on motor vehicles, or working with an expanded list of power-driven machinery, including lawn mowers, trimmers, weed-eaters, golf carts, all-terrain vehicles, and various types of food processing equipment.

Children under the age of 14 are generally prohibited from being employed, except for farm, domestic, or lawn and yard service. However, a child under 14 may work in a non-hazardous business for a parent, grandparent, or legal guardian, or for a business owned by a parent, grandparent, or legal guardian.

For more on Wyoming wage-hour and child labor laws, contact the Labor Standards Division of the Wyoming Department of Workforce Services at the address listed for that agency in Section VI(a).

(e) State Occupational Safety and Health Laws. Approximately half of the states have their own OSHA-like agency, charged with administering the state's own occupational safety and health laws. The remaining states have no such enforcement agency, and thus rely instead on the federal Occupational Safety and Health Administration (OSHA) to administer the federal job safety rules within such states.

Wyoming is one of the states that has its own OSHA-type agency. To determine if your workplace is in compliance with federal and Wyoming job safety requirements, you may wish to contact the Workers' Safety and Compensation Division (WSCD) of the Wyoming Department of Workforce Services and request a free on-site safety consultation. You will not be cited for any violations detected, provided that you promptly correct the unsafe conditions.

For information on your job safety and health obligations as an employer, required posters, and possible on-site safety consultations, see the contact information for the Cheyenne offices of the WSCD, listed in Section VI(a).

(f) Other Miscellaneous State Labor Laws. Other Wyoming labor laws you need to be aware of, as an employer, include the following:

(1) Wage payments to terminated employees. Unlike other states, Wyoming state law does not generally dictate how often or when wages must be paid to employees, except that semi-monthly wage payments are required to be made in certain industries, such as railroads and mining, or to workers at factories, mills, or workshops. However, Wyoming law does require that the final paycheck must be provided by the next regular payday after an employee resigns, retires, or is discharged from employment. An employee who has to sue for unpaid wages is entitled to 18% interest on the amount owed, plus attorney's fees and costs of the lawsuit, and the employer may also be subject to a fine of between $500 and $750.

UPDATE NOTE:
Wyoming law previously required that payment of final wages be made to an employee who quits or is discharged within five days after such termination. This law was changed in 2015 to provide that the employer must simply pay the final wages according to the employer's usual practice on the next regularly scheduled payroll date.

(2) Right-to-work laws. About half the states have enacted "right-to-work" laws, which guarantee that no person may be denied employment for refusing to join a union or for not paying union dues, thus banning either "union shop" or "agency shop" agreements, or both. In a union shop, an employee not belonging to a union may be hired but then must join the union, usually within 30 days. In an agency shop, an employee need not join the union but, to remain employed, must pay union dues.

Wyoming has a right-to-work law, which makes it an attractive place to do business for many employers. This law makes it illegal to refuse to hire or to terminate the employment of any persons on account of their membership (or non-membership) in a labor union.

(3) State anti-discrimination laws. In addition to complying with federal anti-discrimination laws, employers must also be aware of and comply with state civil rights laws in Wyoming, and display a poster informing employees of their rights. You can obtain this poster from the Cheyenne office of the Division of Labor Standards of the Wyoming Department of Workforce Services, at the address listed in Section VI(a).

Wyoming state law prohibits discrimination in employment practices against any qualified disabled person or any person otherwise qualified, because of age, sex, race, creed, color, national origin, ancestry, or pregnancy. The Wyoming anti-discrimination statute applies to any employer that employs two or more persons in the state.

(4) Reporting new hires. Under federal welfare reform laws, employers in every state are now required to report newly-hired (or rehired) employees to an appropriate state agency (the Wyoming New Hire Reporting Center for Wyoming employers) within 20 days after the date of hire. Reports may be filed on IRS Form W-4, the Wyoming New Hire Report Form, or on a form you create that contains all the information required by the state's reporting form. Employers who submit reports magnetically or electronically must submit the reports in two monthly transmissions not more than 16 days nor less than 12 days apart.

See Section VI(a) for contact information and on where to file new hire reports.


VI. STATE SOURCES OF HELP AND INFORMATION

(a) Key State Agencies Contact Information. When starting or relocating a business in Wyoming, you will need to contact the various agencies that are mentioned in this book or listed below on an individual basis, to obtain needed forms, official posters, information and other assistance from each such agency. However, Wyoming now has a single agency to whom you can go for assistance in handling all your licensing and permitting requirements for your business under the laws of Wyoming -- the Business Permitting Assistance Office. Contact that office, which is part of the Wyoming Business Council, at the address listed below.

Addresses and other contact information for other key state and federal government agencies in Wyoming, mentioned in preceding sections of this book, are listed below for your convenience.

BUSINESS STARTUP INFORMATION. A key agency that can provide helpful information on getting your business up and running in Wyoming is the Wyoming Business Council. Contact the WBC at:

Wyoming Business Council
Business Permitting Assistance Office

214 West 15th Street
Cheyenne, WY 82002-0240
(307) 777-2800
(800) 262-3425
(307) 777-2837 (FAX)

SECRETARY OF STATE. Contact the Business Division of the office of the secretary of state for information on:

  • Filing an optional Statement of Authority for a partnership
  • Limited partnership filings and information
  • Limited liability partnership (LLP) filings and information
  • Corporate filings, including articles of incorporation, and information on corporations
  • Limited liability company (LLC) filings, including articles of organization, and information on LLCs
  • Registration of trade names or trademarks in Wyoming
Secretary of State
Business Division

2020 Carey Avenue, Suite 700
Cheyenne, WY 82002-0020
(307) 777-7311
(307) 777-5339 (FAX)

TAXES. Obtain state sales and use tax, and various other miscellaneous business tax forms, instructions and information from the Wyoming Department of Revenue, which is the main tax collection agency in Wyoming.

Wyoming Department of Revenue
Herschler Building, 2nd Floor West
122 West 25th Street
Cheyenne, WY 82002-0110
(307) 777-5200 (Excise Tax Division -- Sales tax)

STATE LABOR LAWS. Contact the following agency (formerly named the Department of Employment) about your obligations as an employer under various state labor laws, including:

  • Wyoming wage-hour laws
  • Wyoming child labor laws and regulations
  • Workers' compensation laws
  • Wyoming unemployment tax
  • Other miscellaneous Wyoming labor laws
  • Wyoming anti-discrimination laws
Department of Workforce Services
Labor Standards Division

1510 E. Pershing Bldg., West Wing, Room 150
Cheyenne, WY 82002
(307) 777-7261
(307) 777-5633 (FAX)

STATE LICENSES. Contact the Wyoming Business Council for information on Wyoming licensing requirements, at the address listed above for that state agency.

STATE SALES TAX. Obtain your sales and use tax license or permit and information on the Wyoming sales and use tax law, from the Department of Revenue, at the address listed above for that agency.

EMPLOYER WITHHOLDING. Wyoming does not have an income tax. Accordingly, no withholding of state income tax from wages of employees is required in Wyoming.

STATE UNEMPLOYMENT TAX. Contact the following state agency to determine whether you are an employer subject to payment of state unemployment taxes, and for registration as an employer if you are subject.

Department of Workforce Services
Unemployment Tax Division
Employer Services

P.O. Box 2760
Casper, WY 82602-2760
(307) 235-3217 (Tax Division)
(307) 235-3264 (Help Line)
(307) 235-3278 (for field representatives)

WORKERS' COMPENSATION INSURANCE. If you employ workers for whom you must supply workers' compensation coverage, contact the following agency for further information:

Department of Workforce Services
Workers' Safety and Compensation
Employer Services Division

1510 E. Pershing Blvd.
South Door, 2nd Floor
Cheyenne, WY 82002
(307) 777-6763
(307) 777-5298 (FAX)

NEW HIRE REPORTING. File new hire reports with the Wyoming New Hire Reporting Center no later than 20 days after hiring or rehiring any employee, either by mailing or faxing the reports to the following address. Employers who submit new hire reports magnetically or electronically must submit the reports in two monthly transmissions not more than 16 nor less than 12 days apart.

Wyoming New Hire Reporting Center
P.O. Box 1408
Cheyenne, WY 82003-1408
(800) 970-9258 (Toll-free in Wyoming)
(800) 921-9651 (Toll-free FAX)

STATE OSHA PROGRAM. For information on both federal and state occupational safety and health laws that affect you as an employer in Wyoming, contact the Workers' Safety and Compensation Division of the Department of Workforce Services at the address listed above for that agency.

STATE ANTI-DISCRIMINATION LAWS. Contact the Wyoming Department of Workforce Services, Labor Standards Division, for more detailed information on Wyoming civil rights laws that may apply to your business, at the address listed above for that state agency.

(b) Small Business Development Centers. A number of Small Business Development Centers (SBDCs) are located throughout Wyoming to assist you. These centers, usually located on college campuses, provide a wealth of start-up information and sponsor frequent business-oriented seminars. Contact the lead office below for information, or for the location of other SBDCs nearer to you.

Wyoming Small Business Development Center
State Office

406 S. 21st Street
Laramie, WY 82071
(800) 348-5194 (Toll-free in Wyoming)
(307) 766-3405
(307) 766-3406 (FAX)

(c) Internet Sites. For anyone with access to the Internet, there is a wealth of state and even local business information provided by state and local governments. All states now have a state government Web page, and all major Wyoming state agencies also have sites on the Internet where you can obtain useful small business information on matters such as state taxes, financing sources, or the addresses and the phone numbers (or e-mail addresses) of various state and federal agencies' offices in Wyoming.

All of the website URLs listed below are currently working as of the date of this publication's release, in our annual update. However, since we find that many state government agencies change their website URLs frequently, you may find that some of these URLs are no longer working when you click on them. In that case, you might need to search for that particular state agency's websites by using one of the popular Internet search engines, such as Google, Bing, or Yahoo.

To start your Internet search for Wyoming government information, you may want to begin with the following Internet sites:

State of Wyoming home page (with links to state agencies):
www.wyo.gov/
Department of Revenue (sales tax and other tax forms and information):
http://revenue.wyo.gov/
Secretary of State of Wyoming (corporate, LLC, partnership filing fees and forms):
http://soswy.state.wy.us/
Wyoming Department of Workforce Services (wage and hour laws, workers' compensation, new hire reporting, anti-discrimination laws, and state unemployment tax):
www.wyomingworkforce.org/
Wyoming Business Council (business assistance and resources):
http://www.wyomingbusiness.org/
Wyoming Attorney General (telemarketing regulations and enforcement):
http://ag.wyo.gov/
Wyoming Business New Hire Reporting Center (file new hire reports online):
http://newhire-reporting.com/WY-Newhire/default.aspx

(d) Financing Sources. For information and help on locating financing for your small business, contact the U.S. Small Business Administration office in Wyoming, or contact the Wyoming Business Council at the address listed in Section VI(a) for that state agency.

The address of the SBA District Office in Wyoming is:

U.S. Small Business Administration
100 East B Street
Federal Building, Room 1011
Casper, WY 82602
(307) 261-6500
(800) 776-9144, Ext. 1


Copyright © 2017 Michael D. Jenkins
Wyoming chapter last full revision date: November 30, 2017