Bill To Base Wyoming Property Taxes On Purchase Price Passes House Committee

State Rep. Tony Locke, R-Casper, thinks Wyoming needs significant property tax relief and has proposed a controversial reform that would make property taxes based on a property’s fair market value and purchase price.

The House Revenue Committee passed by a 5-2 vote Locke’s bill that would do that, with Reps. Kevin Campbell, R-Casper, and Liz Storer, D-Jackson, the only members to vote against it. Locke, and Reps. Clarence Styvar, R-Cheyenne, Jayme Lien, R-Casper, Ann Lucas, R-Cheyenne, Gary Brown, R-Cheyenne, voted in support of it.

Storer described the bill as “an affront” to Wyoming and that the state’s current tax system works.

“If our goal is to bankrupt local communities, cost schools millions of dollars, invite litigation, increase our reliance on the fossil fuel industry in order to give wealthy second homeowners the biggest tax breaks in the state … then this bill is clearly the ticket,” she said.

‘Gambling On Hope’

Property taxes now are now based on year-to-year assessed value.

Locke believes Wyoming homeowners are being taxed based on unrealized capital gains and “gambling on hope” in a system he believes is inherently flawed.

“We hope we can recover those unrealized capital gains, but the truth is, with the current tax structure, they’re taking your profits away before you even realize them,” he said.

Property taxes have become a hot button topic in recent years in Wyoming due to large increases seen around the state after the COVID-19 pandemic. In 2019, property taxes collected in Wyoming amounted to $380 million. By 2024, that number skyrocketed to $652 million. Many have argued local services have not increased at a corresponding level or at all.

“Part of this bill is us readjusting because of the bubble,” Locke said.

The Legislature has attempted to address rising property taxes in recent years by issuing tax exemptions and caps, which Locke doesn’t view as constitutional or a sufficient long-term solution. He pointed out that wide sweeping exemptions affect different counties differently that have experienced different rates of growth.

Uniformity

But the bill itself applies a similar mechanism to individual homeowners by taxing uniformly based on the purchase price of their homes.

Locke sees his bill as bringing property tax reform rather than property tax relief and creating more uniformity in taxation.

“It affects each county fairly,” he said.

Uniform taxation, Wyoming Board of Equalization Chair Martin Hardsocg argued, is a cornerstone value of the Wyoming Constitution.

“It puts the duty on the Legislature to ensure this,” he said.

Hardsocg views the bill as at least partly unconstitutional. If passed in its current form, Hardsocg said the Board of Equalization would have to sue the Legislature over it.

“You can’t use today’s notion of uniformity, you have to go back to the Constitution,” he said.

He also said the bill strips the Board of Equalization of its authority to assess uniformly, which he said can only be addressed in the state Constitution.

“In effect, the board cannot not perform its uniformity and equalization function,” he said.

Former legislator Mark Jennings disagreed and said the Legislature can adapt the Constitution as it sees fit to changing circumstances.

Styvar also countered that being taxed unrealized capital gains is also unconstitutional, but Hardsocg said that is more of a form of income tax.

Jennings also brought up the fact that California has had an acquisition value-based system since the 1970s that has not been repealed.

Lien even made the claim that public services in California are well-funded because of this. Many of the recent wildfires in California have been blamed on depleted local services, which Storer pointed out.

“It has hurt the state, it has hurt education, it has hurt the university system that was frankly a crown jewel for the U.S.,” Storer said.

Hardsocg brought up the 2014 lawsuit involving former Superintendent of Public Instruction Cindy Hill, which determined the Legislature could not ignore pieces of the Constitution as it saw fit by stripping Hill of her duties.

What The Bill Does

If passed into law, House Bill 282 would go into effect in 2026 and roll back taxation to be based on the fair market value on all Wyoming properties to a 2019 baseline.

From there, a yearly inflation “escalator” is built into the bill, but it can be no more than 2% each year.

Any homes bought after 2019 would be brought back to the baseline fair market value in the year it was purchased, with the 2% escalator applied moving forward.

Converse County Commissioner Jim Willox warned that during his decades as commissioner, costs to provide services have increased by more than 2% almost every year.

Hardsocg said the escalator aspect is also unconstitutional.

“You have to square your statues with the Constitution and whatever they thought fair market value was of fair market value,” he said.

Former state legislator Allen Slagle disagreed and said as long as the taxation rate is consistently applied, that’s all that matters.

Moving forward, homes purchased in 2026 or later will be based on their purchase price.

The annual fiscal impact of the bill is expected to be at least $260 million. It does not include any backfill option.

Storer said bringing taxes back to 2019 in her home of Teton County would amount to a 50% tax reduction. The new property tax system would also apply to second-home owners.

“You’re giving the biggest tax breaks to the wealthiest people who own property in the state,” she said.

Locke admitted this may be the case but stressed the bill applies uniform taxation across the state to whatever a home was purchased for.

Storer also expressed concern that the home valuations applied in the bill would not be transparent for the public to understand.

Locke disagreed and said it’s actually easier than the current process. He said the biggest challenge will be determining the acquisition value of homes. Wyoming is a non-disclosure state for home sales, but a few elements of the bill attempt to counteract this.

This taxation structure would be based on residential real property up to 35 acres.

Converse County Assessor Dixie Huxtable agreed with Hardsocg about the bill’s constitutionality and said the bill would essentially remove Wyoming’s non-disclosure status since the amount of taxes assessed are public information. But she also said it would be very difficult for the assessors to lock this price down as they already struggle to get voluntary disclosures of sale prices.

“I can’t imagine how that will transpose into what we will get once they know that statement of consideration is going to set their value forever as long as they own it,” she said.

Huxtable also said the bill takes no account for people who made changes to their homes from 2019-2024 or people who build their own homes.

She urged the committee to delay working on acquisition value until the interim session.

“There’s significant issues with this bill as drafted,” she said. “It needs some significant work.”

A few years ago, the Legislature initiated a study on acquisition value-based taxation. Jennings said the purpose of this study was to be able to identify and plan for opposition to this concept.

Jennings brought the most recent bill attempting to enshrine acquisition value taxation in 2024 but it was not considered for introduction.

Now with a different political makeup in the House, the subject will get much more consideration than it ever has before.

Leo Wolfson can be reached at leo@cowboystatedaily.com.