CHEYENNE — A bill changing the law explaining the local optional sales and use taxes, heavily utilized by the city of Sheridan, passed through Wyoming’s House of Representatives and rests in the hands of the Senate for approval.
The current optional sales and use tax law allows for cities to impose a 3 percent general sales tax, with voters’ approval, yet if voters shoot down the tax, all of the optional sales tax disappears.
“The catch has always been that if you had, say, the fifth penny, and for some reason you wanted to increase that sales tax to one and a half or even two pennies in the general (election), what you have to do is offer up on the ballot the entire package, which means if the voters turn down the 2 percent, that you’re back to zero,” Rep. Michael Madden, R-Buffalo, said.
The new law allows for the tax, when on a ballot, to no longer turn to zero if denied.
“With this new law, it says if you try to enact or vote in a new sixth penny, it does not jeopardize your fifth penny,” Madden said.
The city lodging tax rate bill, also working its way through the House floor, ensures the same thing as the optional sales tax.
“The same application was true with the tourism tax,” Madden said.
On Sheridan County’s 2016 election ballot, citizens voted to continue the 4 percent city lodging tax with a whopping 6,359 votes in favor to 1,512 votes against.
“The nice thing about it is it’s up to the public,” Madden said. “It’s not the state saying you’ve got to impose that tax, it’s available if the local people want it.”
Sheridan County’s Optional One-Cent Sales Tax did not appear the ballot this year, but if the bill passes through the Senate for governor approval, a change might ensue. Madden guessed the first opportunity to seize more taxing opportunities will take place with lodging tax rates; House Bill 102 introducing those rates went through a second reading on Friday with no amendments.
“I don’t know of anybody that’s waiting in the wings to do it, but I would guess that the first opportunity you would see where this is used is some county will try to move the lodging tax from 2 percent up to 4 or something like that,” Madden said.
One-cent optional sales and use tax collections have benefited Sheridan County. Sheridan County sits above all others in 2015 and 2016 collections with the exception of Campbell and Laramie counties, according to October 2016 totals presented by Jim Harmon, the city’s finance and administrative director.
Local improvements funded by the Optional One-Cent Sales Tax include the South Park Natural Area, construction projects and groups like the Sheridan County Museum, Downtown Sheridan Association and the Senior Center. A 2010 website supporting the tax, claims revenues are used as matching funds to obtain state and federal funding dollars for use on community infrastructure and other improvements. In its Dec. 19 meeting, Sheridan City Council approved $50,000 of the Optional One-Cent Sales Tax funds from the 2018 budget to help the Sagebrush Community Arts Center finish its downtown space in the Montgomery building.
“I think this is an excellent example of how by having that optional one-cent sales tax and being able to provide a small increment of money to a non-profit in this community,” Councilman Thayer Shafer said of the allocation of funds to Sagebrush. “That we leverage that money many-fold and are able to accomplish things that the city itself could not accomplish, that they couldn’t accomplish on their own.”
The local optional sales and use taxes bill, House Bill 82, continues on to the Senate on Monday, while House Bill 102, the lodging tax rate bill, continues with a final reading, also on Monday. Keep track of action on proposed bills at legisweb.state.wy.us/LSOWEB/Session/BillsInfo.aspx.