Wyoming does not have a state income tax

Wyoming is one of nine states with no state income tax on wages, salaries, or investment income. You will not owe Wyoming state income tax on money you earn, no matter how much you make or where you work. This applies to residents and nonresidents who work in Wyoming.

The absence of state income tax does not mean Wyoming has no taxes at all. The state funds schools, roads, and services through other revenue sources: sales tax, property tax, mineral extraction taxes, and business taxes. Your federal income tax obligation remains unchanged — you still owe the IRS based on your total income.

Key Takeaways

  • Wyoming residents pay no state income tax on wages, salaries, self-employment income, or investment gains.
  • You still owe federal income tax to the IRS; Wyoming's lack of state income tax does not affect your federal return.
  • Wyoming funds state services through sales tax (currently 4 percent statewide), property tax, and taxes on mineral extraction and businesses.
  • If you move to Wyoming from another state, you do not owe back state income tax to your former state on income earned after you establish residency in Wyoming.

How Wyoming funds state services without income tax

Wyoming relies on a different tax structure than most states. The largest revenue source is taxes on mineral extraction — primarily oil, natural gas, and coal. These industries generate substantial tax revenue that funds the state budget. Wyoming also collects sales tax, which varies by county but starts at 4 percent statewide, with some counties adding local sales tax on top.

Property tax is another major funding source. Wyoming has no state property tax, but counties and municipalities set their own property tax rates. The state also taxes businesses, including corporate income tax on certain business structures and franchise taxes on specific industries. This combination of revenue sources allows Wyoming to operate without taxing individual income.

What you still owe to the federal government

Wyoming's lack of state income tax does not change your federal tax obligations. You must still file a federal income tax return with the IRS if your income exceeds the threshold set by the IRS for your filing status. The IRS collects federal income tax from all states, including Wyoming.

Your federal return works the same way it does for residents of any other state. You report all income, claim deductions and credits you are may have access to to, and pay federal tax based on your total income and tax bracket. Some people confuse state and federal taxes and assume no state income tax means no taxes at all — this is incorrect. Federal tax is separate and mandatory.

Moving to Wyoming and your tax situation

If you move to Wyoming from a state with income tax, you do not owe that former state income tax on income you earn after you establish Wyoming residency. Most states tax only income earned while you were a resident. Once you move and establish residency in Wyoming, income you earn is subject to Wyoming's tax rules, not your former state's.

Establishing residency typically means obtaining a Wyoming driver's license, registering your vehicle in Wyoming, and living in the state with the intent to stay. The timing of when you are considered a resident for tax purposes can vary by state, so if you are moving from a high-income-tax state, it may be worth confirming the exact date your former state stops taxing your income. Some states tax income through the end of the calendar year in which you move.

Sales tax and property tax in Wyoming

While Wyoming has no income tax, you will pay sales tax on most purchases. The state sales tax rate is 4 percent. Many counties and municipalities add local sales tax on top of this, bringing the total to between 4 and 6 percent depending on where you shop. Groceries are generally exempt from sales tax in Wyoming, as are prescription medications.

Property tax is set by county and varies significantly across the state. Wyoming has no statewide property tax, so your rate depends entirely on which county you own property in. Property tax is typically paid annually to your county assessor. If you own a home or land in Wyoming, you will receive a property tax bill from your county, even though there is no state-level property tax.

Self-employment income and Wyoming taxes

If you are self-employed and live in Wyoming, you do not owe Wyoming state income tax on your business income. However, you still owe federal self-employment tax to the IRS, which covers Social Security and Medicare. This is true regardless of which state you live in.

Self-employed people in Wyoming file a federal Schedule C (or Schedule F for farming) and pay federal self-employment tax based on net business income. You may also owe Wyoming sales tax if you sell products or taxable services, depending on what your business does. The absence of state income tax does not eliminate your federal obligations or sales tax requirements.

Frequently Asked Questions

Do I have to file a Wyoming state income tax return?

No. Wyoming has no state income tax, so there is no Wyoming state income tax return to file. You only file a federal return with the IRS if your income exceeds the IRS threshold for your filing status.

If I work in Wyoming but live in another state, do I owe Wyoming income tax?

No. Wyoming has no income tax, so you do not owe Wyoming tax on income earned there. You may owe income tax to your home state, depending on that state's rules. Some states tax residents on all income regardless of where it is earned.

Does Wyoming have any other taxes I should know about?

Yes. Wyoming has a 4 percent state sales tax (higher with local additions), county property tax, and taxes on businesses and mineral extraction. You will encounter sales tax at the register and property tax if you own land or a home.

Can I deduct Wyoming property tax on my federal return?

Yes, if you itemize deductions on your federal return. Property tax is a deductible state and local tax (SALT) up to $10,000 per year on your federal return. You must itemize rather than take the standard deduction for this to benefit you.

If I retire in Wyoming, will I owe state income tax on my retirement income?

No. Wyoming has no state income tax on any income, including retirement income, pensions, Social Security, or investment income. You will not owe Wyoming state tax on retirement funds, though you will still owe federal tax on most retirement income.