According to the Tax Foundation, Wyoming takes top honors for the lowest taxes nationwide. – Eric O’Keefe
1. NO INDIVIDUAL INCOME TAX
Only six states in the Union shun a personal income tax: Alaska, Florida, Nevada, South Dakota, Texas, and Wyoming. And at the other end of the spectrum, there’s California, which has a top marginal income tax rate of 13.3 percent.
2. NO CORPORATE INCOME TAX
Only two states on the honor roll above don’t levy a corporate income tax: South Dakota and Wyoming. Not surprisingly, these neighbors take top honors from the Tax Foundation in its 2018 State Business Tax Climate Index: South Dakota ranked second and the Cowboy State first.
3. NO TAX ON RETIREMENT INCOME
So you’re not from Wyoming, yet you own property in the 44th state. Not to worry. The state legislature isn’t eyeing your out-of-state retirement income. No wonder you want to become a resident.
4. NO TAX ON MINERAL OWNERSHIP
Wyoming shares a border with Nebraska, but few of its tax policies make it across the state line. The Cornhusker State has a top marginal individual income tax rate of 6.84 percent, and that’s just the start. Nebraska’s property taxes fall in the 2 percent range and apply to real property as well as personal property. This means that land, structures, wells, minerals, and even payments related to oil or gas leases are taxable. Wyoming has no mineral tax.
5. NO ESTATE (DEATH) TAX
Above a congressionally-mandated multimillion-dollar threshold, Uncle Sam rewards your demise with a 40 percent estate tax. According to Morgan Scarboro at the Tax Foundation, 14 states and the District of Columbia add insult to fatality by imposing their own estate tax. Washington tops the leaderboard at 20 percent. Wyoming’s death tax? Goose egg.
6. NO STATE GIFT TAX
What if real property is transferred not at the time of death but when the donor is alive? Known as an inter vivos (among the living) gift, this is not taxed by Wyoming.
7. YES DYNASTY TRUSTS
OK. When it comes to dynasty trusts, Wyoming does not top the list. Several states actually allow the creation of legal instruments (such as a deed or a will) that exert control over a family’s landholdings in perpetuity. Yes, forever. Short-sighted Wyoming only allows a family to shield real estate holdings from federal estate taxes for 1,000 years.
To learn more about federal, state, and local taxation from the nation’s leading independent tax policy nonprofit, go to: TaxFoundation.org.