CASPER, Wyo. — A bill that would make changes to local sales and use tax rules in Wyoming passed the Wyoming House of Representatives on first reading on Thursday, Feb. 13.
The bill, which includes provisions that would allow counties to make the so-called “fifth penny” general purpose tax permanent, would need to be passed on two further readings in the House before it would be sent to the Senate.
House District 58 Representative Pat Sweeney said that the proposal has support from both the Wyoming Association of Municipalities and the Wyoming County Commissioners Association.
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“This was brought to at first by the organization that represents municipalities,” he said. “The county commissioners have through their association negotiated this. In the end it really favors, I think, our counties. This has been negotiated, it has been vetted. “
“Is it quirky? Yes, but both groups are satisfied.”
House District 43 Representative Dan Zwonitzer explained the major provisions of the bill on Thursday.
Wyoming has a 4% state sales tax. Counties are able to add 1% to sales tax collections with voter approval, sometimes referred to as the “fifth penny.”
The bill would also make provisions which would allow counties to ask voters to support special purpose “sixth penny” excise taxes and municipalities to seek voter support for special purpose “seventh penny” excise taxes.
Zwonitzer explained that the bill would allow voters in each county to decide whether to make the fifth penny permanent. Currently, voters are asked every two years whether they would like to approve such a sales tax in their counties.
“This bill has been well vetted,” Zwonitzer said. “This would allow the possibility of making that ‘fifth cent’…permanent. This means they don’t have to go back and ask the voters every four years for consent.”
With some counties receiving frequent, large voter support for the fifth penny, Zwonitzer explained that the bill would allow voters in such counties the ability to make this permanent, though he added there are provisions in the bill which would allow for the future repeal of such a decision.
He added that the bill would also lower the threshold with which municipalities in a county must agree to bring “fifth penny” tax requests to voters. Zwonitzer explained that currently, the governing bodies of at least two-thirds of the municipalities in a county must agree to bring the issue before voters.
He explained that in Laramie County, there are four municipalities. That puts Cheyenne in a position where municipalities with much smaller populations are able to prevent such an issue being brought to voters.
Zwonitzer said the bill would require only half of municipalities to agree to bring the issue to voters, which he said would be a more fair arrangement for larger municipalities like Cheyenne.
House District 25 Representative Dan Laursen said he would bring an amendment up on second reading regarding the provision in the bill which would reduce the threshold to 50%.
The bill would also make changes to how specific or general purpose taxes could be imposed by counties or municipalities.
“First, you would have to have a specific or general purpose tax brought forward by the county,” Zwonitzer said. “Then muncipalities could come in for a special purpose tax.”
He explained that if voters approve county-wide specific or general purpose taxes, municipalities could ask voters to support an additional tax which would have to expire before the county-wide tax expires.
The municipal tax could not exceed the county-wide tax rate.
One exception in the proposed bill would give municipalities an option to ask voters to support a special purpose tax if counties have not enacted such a tax.
Zwonitzer explained that this would require municipalities to obtain consent from county commissioners to bring such a request to voters. He explained that in Sublette County, the fifth penny tax has not been enacted.
The bill would allow a town like Pinedale to ask voters to support a local tax for a purpose specific to their town even if Sublette County doesn’t impose such a tax.
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