Introduction to the Wyoming Corporate Tax Rate
The spirit of the Wild West lives on in Wyoming, one of the country’s most tax-friendly states for small businesses. Wyoming ranked first in the Tax Foundation’s 2024 Business Tax Climate Index due to the low Wyoming corporate tax rate on income and sales and the lack of a franchise tax. Wyoming imposes no sales tax or income tax. Wyoming also has strict privacy and asset protection laws, few regulations, a strong state economy, and reputable banking systems. Furthermore, Wyoming has a high quality of life and is a top tourist destination due to its scenic beauty and outdoor sporting opportunities.
Key Takeaways:
- The lack of a Wyoming corporate tax rate on income and franchise makes it one of the most business-friendly states in the US.
- Wyoming takes pride in having a low state sales tax rate of 4%, low filing and maintenance fees, low costs, and identity-protection privacy laws.
- Wyoming is an excellent place to establish a business due to its asset protection, flexible laws, absence of a stock ceiling, and no citizenship requirements.
- Getting started is simple, with minimal requirements and low filing and licensing fees.
Is Wyoming a Business-Friendly State?
According to the Tax Foundation’s 2024 State Business Tax Climate Index, Wyoming is ranked #1 – absolutely first. This demonstrates how well-structured Wyoming’s tax system is. Wyoming offers the following benefits in addition to its low sales tax and lack of an income tax:
- Privacy and Asset Protection: Wyoming’s laws provide businesses with strong privacy and asset protection. The exemption from disclosure of an LLC’s managers or members in public records provided by the state adds an extra layer of privacy.
- Business-Friendly Regulations: Wyoming is known for its business-friendly regulations and simplified process for business formation. This can save you time and effort when establishing your business.
- Virtual Office Availability: Wyoming allows businesses to have a virtual office address, which can be advantageous for those who want a physical presence without needing a dedicated office space.
- No Franchise Tax: Wyoming doesn’t impose a franchise tax on businesses, which can be another cost-saving factor for companies operating there.
- Economic Diversity: The state’s economy is diverse, with industries such as energy, agriculture, tourism, and technology.
- Strong Banking System: Wyoming has a strong banking system, which can be advantageous for businesses seeking financial services and funding.
- Quality of Life: While not a direct business advantage, Wyoming’s scenic beauty and outdoor activities can contribute to a high quality of life for residents and potential employees.
How Do I Start a Business in Wyoming?
For most businesses, all that is required to get going is to submit articles of incorporation with Wyoming. It is essential to double-check that this is all you need, as some industries require a Wyoming business license. The basic steps are as follows:
- Choose a business structure. Consider booking a consultation to determine the best pre-formation structure. In addition, we now offer new company packages that include consultation.
- Choose a name for your business.
- File the Formation Papers with the WY Secretary of State.
- Get Wyoming business licenses, such as the sales and use tax license, which costs $60. It is a one-time fee, so no renewals are required. Depending on the type of business you operate, you might need additional licenses.
- File a Wyoming Annual Report each year on the Secretary of State website.
Does the State of Wyoming Have an Income Tax?
Wyoming collects no corporate or individual income taxes, making it very tax-friendly. However, your company may still be required to submit sales tax to the local and state governments, even though there is no Wyoming corporate tax rate on income to worry about.
Does Wyoming Have a Franchise Tax?
To conduct business in Wyoming, one is not required to pay a franchise tax.
Does Having a Mailing Address in Wyoming Trigger Corporate Income Tax or Registration Requirements?
Having a mailing address in Wyoming is unlikely to trigger the need to pay the Wyoming corporate tax rate and registration requirements. The state is well-known for not having a Wyoming corporate tax rate on income. This means that corporations registered in Wyoming and doing business solely within the state are generally exempt from paying corporate income tax to the state, regardless of their mailing address.
Will I Have to Pay Taxes If My Business is Located in Wyoming But I Live in Another State?
If you own a business in Wyoming but live in another state, you generally will not have to pay the Wyoming corporate tax rate on your income. However, keep the following points in mind:
- Business Taxes: While Wyoming does not have a state income tax, other taxes or fees may be associated with operating a business there. This may include sales, real estate, and other business-related taxes.
- State Nexus and Business Activities: Having a business in Wyoming while living in another state doesn’t automatically mean you have no tax obligations in the state. If your company has a substantial physical presence or significant economic activity in Wyoming, you may still be subject to certain taxes or reporting obligations. This is commonly referred to as having a “nexus” in the state.
- Your Home State: While Wyoming may not tax your business income, your home state may tax the income generated by your Wyoming business, depending on your home state’s tax laws. This can vary widely between states.
Do I Have to Pay the Wyoming Corporate Tax Rate If the Founders Live in Another Country and All Activities are Outside the United States?
If all of your business operations are conducted abroad, you reside abroad, and your Wyoming company does not operate within the U.S., your Wyoming company may not have significant tax obligations in the state of Wyoming. However, there are a few other factors to consider:
- Nexus: If your Wyoming business has no employees, no physical presence, or no significant business activities in the country, it may not have a nexus (taxable presence) in Wyoming or any other U.S. state.
- Federal Taxes: Even if you do not owe state taxes, there may still be federal tax ramifications. If your Wyoming company is a U.S. entity, you may need to consider federal tax reporting requirements, even if your business activities are conducted entirely outside the U.S.
- The type of business entity you own (corporation, LLC, etc.) can affect your tax obligations. The tax reporting requirements differ depending on the type of entity.
- Consult your Cleer Tax Professional. It is strongly advised that, on account of the intricacy of international tax regulations and laws, you seek the counsel of an expert in international taxation who possesses knowledge of both the United States federal tax system and the tax legislation of your country of origin. At Cleer, we provide tailored-fit guidance based on your business structure, activities, and the tax treaty agreements between your country and the U.S.
- Annual Reporting. A Wyoming company may still be required to fulfill annual reporting requirements, such as submitting an annual report to the state of Wyoming, even if the company does not owe any taxes to the state. This is usually more administrative in nature and has nothing to do with income or franchise taxes.
Do I Need to Pay the Wyoming Corporate Tax Rate on Income If I Have an Employee?
Out-of-state corporations are not subject to paying a Wyoming corporate tax rate on income. In addition to not having a corporate income tax, Wyoming does not impose one on its employees who work for corporations based outside the state. However, the concept of “nexus” must be considered when it comes to taxation. A nexus is a significant connection or presence in a state that can result in tax obligations. While hiring an employee in Wyoming may not trigger corporate income tax on its own, it could potentially contribute to establishing a nexus in the state, depending on the nature and extent of your business activities.
If your business activities create sufficient nexus in Wyoming, you may be subject to other tax obligations, such as sales or business-related taxes. Nexus determination can be complex and is subject to state laws and regulations. For more information, please consult our state-by-state tax guide or contact us at hello@cleer.tax.
Does Having an Independent Contractor in Wyoming Trigger the Requirement to Pay a Wyoming Corporate Tax Rate?
In Wyoming, having an independent contractor does not trigger corporate income tax for out-of-state corporations. There is no Wyoming corporate tax rate on income, and the presence of an independent contractor from an out-of-state corporation in Wyoming is not typically a direct trigger for corporate income tax in the state.
However, the concept of “nexus” must be taken into account. If your business activities, including the use of independent contractors, create a significant connection or substantial presence (nexus) in Wyoming, you may be required to pay additional taxes, such as sales taxes or other business-related taxes.
Determining the nexus can be complicated and dependent on various factors, including the scope and extent of your business activities, the frequency of transactions, and the overall nature of your business relationships in the state. Check out our guide to all state tax requirements for more information.
If a Founder Lives in Wyoming, Does That Trigger Corporate Income Tax Requirements?
A corporation’s founder residing in Wyoming does not generally trigger the requirement to pay a Wyoming corporate tax rate on income. Wyoming does not have a corporate income tax at the state level. As a result, a founder living in Wyoming does not automatically subject the corporation to Wyoming corporate income tax.
However, it’s crucial to keep in mind that several variables, such as the corporation’s business operations, nexus, and structure, can affect corporate tax considerations. While the residence of a founder may not directly trigger corporate income tax, other factors related to the corporation’s operations and presence in Wyoming may have tax implications.
Does Holding Board Meetings in Wyoming Trigger Corporate Income Tax Filings?
Holding board meetings in Wyoming is unlikely to trigger the need to pay a Wyoming corporate tax rate for a company not based in Wyoming. Holding occasional board meetings or business activities in a state generally does not, by itself, establish the level of substantial presence (nexus) that would trigger corporate income tax for an out-of-state company. However, it’s important to consider the broader context of your business activities and presence in Wyoming. If your company’s activities in Wyoming extend beyond occasional board meetings and include significant business operations, employees, property, or sales in the state, it may create a nexus and result in tax obligations.
Does Wyoming Impose a Sales Tax?
Yes, Wyoming does collect sales tax. However, Wyoming has one of the lowest sales taxes in the nation. Wyoming’s state sales tax rate is 4%, which is relatively low compared to other states. In addition to the state sales tax, some local jurisdictions in Wyoming may levy local sales taxes. These local rates vary and are added to the state sales tax rate, resulting in the total sales tax rate that consumers pay.
Are There Any Goods and Services Exempt From Wyoming Sales Tax?
Wyoming law grants several sales tax exemptions, including those for agricultural products, construction services, mining products, and manufacturing equipment. Some of the more common exemptions are:
- Livestock or livestock feed for marketing purposes (sampling)
- Poultry and poultry feed for marketing purposes (sampling)
- Seeds, bulbs, small plants, roots, and fertilizer to grow products for sale
- Wholesale sales, except for controlled substances not sold with a prescription
- Fuel, if used as boiler fuel to generate electricity
- Tangible personal property and services sold to the government and certain charitable and nonprofit organizations
- Water delivered by truck or pipeline
- Food for consumption at home
- Transportation costs for drilling rigs
- Newspapers
- Certain farm implements
Does Wyoming Tax SaaS Income?
Wyoming is known for having a business-friendly tax environment, with no state or corporate income taxes. SaaS companies that operate solely in Wyoming are not subject to state-level income tax on software sales or downloads. Wyoming does not tax income from Software as a Service (SaaS). Custom software and downloaded software are exempt from Wyoming sales tax.
Does Wyoming Tax Online Marketplaces?
If their gross revenue from sales of tangible personal property, admissions, or services exceeds $100,000, or if they conduct 200 or more separate transactions, remote sellers and marketplace providers must collect and remit Wyoming sales or use tax on taxable sales in the previous or current year.
Does Wyoming Tax Remote Software Sales?
In Wyoming, sales of canned software downloaded are subject to sales tax, while sales of custom software delivered on tangible media are exempt.
How Do We Close a Business in Wyoming?
There are several steps you should take if you want to close your business in Wyoming to ensure a smooth and proper closure. Keep in mind that the specific requirements will vary depending on the type of business entity you have (corporation, limited liability company, partnership, sole proprietorship, etc.). The following are the general guidelines:
1. Tax Obligations: Ensure all your tax obligations have been met before closing your business. This includes state and federal taxes, sales, employment, and other applicable taxes.
2. Inform Appropriate Authorities:
- Notify the Wyoming Secretary of State’s office of your intention to dissolve or cancel your business entity. This may entail the submission of specific dissolution or cancellation documents.
- Local Authorities: Depending on your business activities, you may be required to notify local and municipal authorities.
3. File Dissolution Documents: If you have a formal business entity, such as an LLC or corporation, you will almost certainly need to file dissolution or cancellation documents with the Wyoming Secretary of State’s office. This procedure will formally terminate the legal existence of your business entity in the state.
4. Notify Creditors and Customers: Inform your creditors, vendors, customers, and any other parties affected by your business’s closure. Settle any outstanding debts, contracts, or obligations.
5. Cancel Business Licenses, Permits, and Registrations: Cancel any business licenses, permits, and registrations you no longer need. This could include local business licenses as well as industry-specific permits.
6. Close Commercial Accounts: Close your commercial bank accounts and credit lines. Make certain that any outstanding balances are settled.
7. Final Tax Returns: Submit your company’s final federal and state tax returns. Consult with a Cleer Tax professional to ensure this step is completed correctly.
8. Disposal of Assets: Plan how to dispose of any remaining business assets, whether through sale, transfer, or other means.
9. Notify Employees: Inform all employees of the company’s impending closure. Comply with all applicable employment laws, including those governing termination and final paychecks.
10. Cancel Insurance: Cancel all company insurance policies that are no longer required.
11. Maintain Records: Even after you close your business, you will most likely need to maintain certain records for a specified period of time, as required by law.
To ensure that you fulfill all legal obligations and take all necessary actions, it is vital that you seek the advice of legal and financial experts who specialize in business closures. Professional assistance is strongly advised to ensure a smooth closing process, including legal, financial, and regulatory aspects.
When is Wyoming’s State Tax Return Due?
Because Wyoming does not collect income taxes on businesses, you are not required to file a WY State Income Tax Return. You must, however, file a Federal Income Tax Return for as long as your EIN is active, whether or not you have transactions. There is no requirement to file a tax return with the state.
Can Cleer Tax Help Me File My Wyoming State Taxes?
YES! Every Cleer Corporate Income Tax Package includes BOTH Federal and State income tax filings. If you do business in multiple states, each additional state is only $175. Even though there is no Wyoming corporate tax rate, it is still important to ensure that all of your bases are covered when filing to a vid penalties and late fees.
Cleer Tax provides accurate, affordable, and efficient financial and tax services for U.S. businesses and subsidiaries, assisting entrepreneurs to do it right from the start. We also offer all-inclusive monthly accounting packages that include monthly statements as well as your federal and state tax returns. If you have any other questions about forming your company or maximizing your tax savings, schedule a consultation to discuss the best structure for your startup business, regardless of the state in which you register. We also provide a new company package that includes a tax consultation, bookkeeping, and a chart of accounts set up to ensure you do it right from the start.
