SHERIDAN — Wyoming lawmakers are considering implementing a corporate income tax for some of the largest corporations operating in the state. If passed, the bill would represent the first ever income tax in the state and target businesses with more than 100 shareholders.
Companies with an Employee Stock Option Program would count everyone under the program as one share. Thus, ESOP companies are not more likely to reach the threshold simply because the company is employee-owned.
Sponsored by Rep. Jerry Obermueller, R-Casper, the “National Retail Fairness Act” was introduced during last year’s legislative session as House Bill 220 and quickly passed by a wide margin. However, the bill was never brought up for a vote in the Senate, presumably because it was not anticipated to have enough votes to pass, Obermueller said.
Obermueller said he plans to reintroduce the bill in 2020 with slight modifications.
“There was a concern that the bill was too narrow in targeting certain companies,” he said, acknowledging the first draft of the bill set up precise qualifications to aim to target only “big box” stores and large chain restaurants. “I have changed it so that it now includes all corporations with 100 shareholders.”
Wyoming is currently one of only two states that does not impose any form of corporate income tax. Because of this, income generated in Wyoming is instead taxed by the state that hosts that company’s headquarters. For example, taxes on income made by Walmart in Wyoming is taxed by the state of Arkansas, where Walmart’s headquarters are located.
Chris Carroll, owner of Carroll’s Furniture on Main Street, said he would support the measure, which could bring in as much as $45 million for public schools.
“It’s only going to affect large corporations, like Walmart, not small businesses like me,” he said. “That type of thing is more favorable for a small business because it’s not going to affect the average corporation in Wyoming.”
Obermueller said there are a few Wyoming-based companies that have come forward saying the bill would affect them. None of those companies are in Sheridan.
Carroll said the measure could bring needed income to the state without compromising Main Street businesses.
“I’m not worried about getting too big for it,” he said.
In an age where the fossil fuel industry is diminishing and the state needs to diversify its economy, doing anything to tamper with the “business friendly” climate of the state has, so far, been met with skepticism.
Weatherby CEO Adam Weatherby said that while his firearm manufacturing company doesn’t presently have the shareholders that would cause the bill to affect his business, he’s put off by the idea of any kind of corporate tax. He purposefully moved his company here from California last year to find a friendlier business climate.
“We came from a place where there was a new tax being introduced every other day,” Weatherby said. “It’s disappointing they’re looking at this right after we got here.”
Weatherby cited statistics published by the U.S. Tax Foundation that ranked Wyoming No. 1 in state business tax climate. Implementing this kind of legislation would kick the state down to the No. 3 slot.
The Wyoming Liberty Group said last year’s bill could be a precursor to a statewide corporate income tax and may have hidden costs or unintended consequences.
“It’s a slippery slope,” Weatherby agreed.
Kennon Products CEO Joe Wright said via e-mail, “I’ve always found it is more complex than what is conveyed.” Wright did not provide further commentary on the proposed legislation.
By Tracee Davis
The Sheridan Press