One of the most aggressive approaches to property tax relief in Wyoming proposed — and ultimately killed — during the 2024 legislative session will return for discussion this summer.
The bill brought by state Rep. Steve Harshman, R-Casper, was one of the most talked-about bills during the recently completed session, legislation that would have cut property taxes for 97% of Wyomingites in return for increasing the state sales tax rate by 2%.
During Monday’s Management Council meeting, state Sen. Bo Biteman, R-Ranchester, co-chairman of the Joint Revenue Committee, said his committee will continue discussing Harshman’s bill during the upcoming interim session this summer. It will be the committee’s second highest priority.
“Maybe as we get away from property taxes and go more toward a sales tax base, it’s more fair, it’s broad-based,” Biteman said.
Biteman said this also could include broadening the sales tax base to get rid of some of the more than 50 sales tax exemptions that now exist under state law, which he said would help keep overall tax rates low.
“A lot of folks that I’ve talked to seem to like that idea,” he said. “They’d rather pay a little bit higher sales tax and no property tax or a lot less property tax.”
What It Does
Harshman’s House Bill 203 would have eventually forgiven $1 million of fair market assessed value for all single-family residences in Wyoming, thus completely eliminating property taxes on about 97% of Wyoming homes. It also would have increased the state sales tax rate from 4% to 6%.
Initially, the bill received wide support on both sides of the aisle, but eventually died on its third reading in the House, mostly out of concerns that it would have no direct benefit to anyone who doesn’t own residential property in Wyoming, like renters, and draw too many people to the state.
The committee also will consider a review of other potential sources of revenue, including a tax on purchases of real property to replace all or a portion of reduced property tax revenue.
Discontent
One of the biggest sources of frustration coming out of the 2024 legislative session was Gov. Mark Gordon’s veto of Senate File 54, a bill that would have forgiven 25% assessed value on home value up to $2 million.
This prompted some members of the Legislature to call for a special session, a move that was rejected by a 50-43 vote on Sunday night.
Gordon approved other bills providing property tax relief such as a 4% cap on year-to-year increases, an expansion to the state’s property tax rebate program, and a 50% tax exemption on longtime homeowners.
In Biteman’s view, these solutions weren’t enough.
“We solved most of it — well not most of it — some of it this year,” he said.
The question of whether the Legislature made sufficient progress on property tax relief this year will likely be a major talking point on the campaign trail this summer.
Reform Vs. Relief
Wyoming’s property tax structure hasn’t changed significantly since Wyoming statehood and many of the property tax issues lawmakers are grappling with will likely require deeper reform to fully resolve rather than the short-term relief provided with exemptions and caps.
There was no discussion Monday about addressing significant property tax reform in addition to relief, which Ashley Harpstrieth, executive director of the Wyoming Taxpayers Association, said she found disappointing.
“It was definitely discouraging considering when people are so upset about property taxes and want to call a special session to deal with it,” she said.
Harpstreith said this avenue is the only way to truly address property taxes in Wyoming, as she believes the relief approach simply involves substituting one tax for another and continues the state's dependence on the boost-and-bust cycle of mineral revenues.
“When we bust, who's going to pay for that?" she questioned.
A constitutional amendment is going to voters this fall to add a fourth class of taxation for residential properties, but Harpstreith said if passed this will only erode the tax base further, which she believes will lead to more taxes in the future.
“If you don’t pay it there, it’ll come back as another tax,” she said. “You’re robbing Peter to pay Paul.”
Harpstreith said her organization would support a constitutional and state law change allowing local governments and special districts to only charge on their tax mills what they actually need for each given year, and any other measure that broadens the tax base equally.
Other Property Tax Discussions
Biteman said SF 54 will be back for consideration in the upcoming interim session, and he doesn’t believe many changes need to be made to it.
“That will probably come front and center again to get immediate relief, broad relief to the majority of Wyoming taxpayers,” he said.
SF 54 passed by a supermajority vote in both chambers and likely would have received the two-thirds support necessary to override Gordon’s veto of the bill had the Legislature had not already adjourned by the time he made it.
Biteman also said tangible personal property taxes will be brought up. During the 2024 legislative session, a bill was proposed to exempt all tangible personal property from taxation up to $20,000 of the fair market value of personal property.
Biteman described this bill as taking a “bazooka approach” to the issue, which he believes could possibly be better addressed in other ways.
“The committee maybe wanted to take a more measured approach,” he said. “Trying to find a sweet spot for what that should be so we’re not hurting our small business owners and people that probably don’t even know the law exists.”
Harpstreith said she would prefer looking at the indexing of tangible personal property.
The Revenue Committee will have its first meeting of the interim session May 30-31 in Casper.
Leo Wolfson can be reached at leo@cowboystatedaily.com.
