Wyoming does not have a state income tax
Wyoming is one of nine states with no state income tax. You will not owe Wyoming state income tax on wages, investment income, retirement distributions, or business profits, regardless of how much you earn or how long you live there. This applies to residents and non-residents who work in Wyoming.
The absence of income tax does not mean Wyoming has no taxes at all. The state funds schools, roads, and services through other sources: sales tax, property tax, mineral extraction taxes, and business taxes. Your total tax burden depends on where you live, what you own, and what you buy — not on what you earn.
Key Takeaways
- Wyoming residents pay no state income tax on any type of income, including wages, pensions, and investment returns.
- Wyoming funds state services through sales tax (currently 4 percent), property tax, and taxes on mineral extraction and businesses.
- If you work in Wyoming but live in another state, you typically owe income tax only to your state of residence, not to Wyoming.
- Moving to Wyoming for tax reasons alone does not lower your total tax burden if you own property or spend heavily on taxable goods.
How Wyoming funds state services without income tax
Wyoming relies on a narrow tax base. The state collects a 4 percent sales tax on most purchases, plus local sales taxes that vary by county (bringing the total to between 4 and 6 percent depending on location). Property owners pay property tax to their county, and rates vary widely — from roughly 0.6 percent to over 1 percent of assessed home value depending on the county.
The largest source of state revenue is taxes on mineral extraction, primarily oil, natural gas, and coal. When commodity prices rise, Wyoming's budget expands; when prices fall, the state faces shortfalls. This volatility is why Wyoming has built a savings account called the Permanent Wyoming Mineral Trust Fund, which invests revenue from mineral taxes and returns earnings to the general fund.
Businesses also pay corporate income tax and various licensing and franchise fees. The state does not tax retirement income, Social Security, or military pensions — a policy that attracts retirees but does not offset the loss of individual income tax revenue.
What happens if you move to Wyoming from a state with income tax
If you move to Wyoming from a state that taxes income, you stop owing that state's income tax once you establish Wyoming residency. Residency is typically determined by where you spend the majority of the year, where you register your vehicle, and where you hold a driver's license. You do not need to own property to be a resident.
However, your former state may still tax you on income earned before you moved. Some states tax residents on income through the date you leave, and a few have "departure taxes" on capital gains. Check your former state's rules before you file your first Wyoming return.
If you work remotely for a company in another state, you owe income tax to your state of residence (Wyoming), not to the state where your employer is located. This is one reason remote workers sometimes relocate to no-income-tax states. However, if you work in another state and commute across the border, that state may tax your wages — check the reciprocal tax agreements between Wyoming and your work state.
Wyoming's sales tax and property tax burden
Wyoming's base sales tax is 4 percent, but most counties add a local sales tax, bringing the total to between 4 and 6 percent. Food, prescription medications, and medical equipment are generally exempt. The sales tax applies to every purchase you make in the state, so a household that spends heavily on goods may pay more in sales tax than it would have paid in income tax elsewhere.
Property tax in Wyoming is assessed on real estate and, in some counties, on vehicles and equipment. Rates vary by county and by property type (residential, agricultural, commercial). A homeowner in one county might pay 0.6 percent of home value annually, while a homeowner in another county pays 1.2 percent. You can look up your county's rate through the county assessor's office.
For someone earning $60,000 per year, Wyoming's lack of income tax saves roughly $3,000 to $5,000 annually (depending on the state they left). But if they buy a $300,000 home and spend $30,000 per year on taxable goods, property and sales taxes may offset much of that savings.
Federal income tax still applies in Wyoming
Wyoming's lack of state income tax does not affect your federal income tax. You still owe federal tax on all income, and you file a federal return the same way as residents of any other state. The standard deduction, tax brackets, and filing requirements are identical whether you live in Wyoming or elsewhere.
Some people mistakenly believe that moving to a no-income-tax state reduces their federal burden. It does not. Federal tax is separate from state tax, and the IRS taxes all U.S. citizens and residents on worldwide income regardless of where they live.
Tax considerations for retirees and investors in Wyoming
Wyoming's tax structure is often promoted to retirees because the state does not tax Social Security, pensions, or retirement account distributions. A retiree receiving $40,000 per year from a pension and $20,000 from Social Security owes no Wyoming state tax on that income. This can be a significant advantage compared to states that tax retirement income.
Investors also benefit from the lack of capital gains tax. If you sell stock or real estate at a profit, you owe federal capital gains tax but no Wyoming state tax. However, this advantage applies only to Wyoming residents; if you live elsewhere and own Wyoming property, you owe tax to your state of residence on the gain.
Wyoming also does not tax interest, dividends, or other investment income. Combined with no income tax on wages, this makes Wyoming attractive to high-income earners — but again, only if they establish residency and do not owe tax to another state.
Frequently Asked Questions
Do I have to file a Wyoming state tax return?
No. Wyoming has no state income tax, so there is no state return to file. You file only a federal return with the IRS. Some states require residents to file a return even with no income tax, but Wyoming does not.
If I work in Wyoming but live in Colorado, do I owe Wyoming tax?
No. You owe income tax to your state of residence (Colorado), not to the state where you work. Wyoming does not tax wages earned by non-residents. However, Colorado will tax your Wyoming wages as part of your total income.
Does Wyoming tax rental income or business income?
Wyoming does not tax individual income from any source, including rental income, self-employment income, or business profits. However, you still owe federal tax on this income. Some business entities (corporations, partnerships) pay Wyoming business taxes, but sole proprietors do not.
What if I inherit money or property in Wyoming?
Wyoming has no state inheritance tax or estate tax. You do not owe Wyoming tax on inherited assets. You may owe federal estate tax if the estate is very large, but that is a federal issue, not a Wyoming one.
Is Wyoming's total tax burden actually lower than other states?
It depends on your income level, spending habits, and property value. High earners with low spending and modest property holdings pay less in Wyoming. Homeowners with expensive property or households that spend heavily on taxable goods may pay more in property and sales tax than they would have paid in income tax elsewhere.