In the past five weeks, the Wyoming Legislature has examined a property tax, a tax on wind energy, and taxes on hotel rooms, cigarettes and vape products.
None of those tax proposals, however, attracted the attention or scrutiny that House Bill 220 — aka the National Retail Fairness Act — has managed to draw.
The effort to introduce Wyoming’s first corporate income tax has garnered the wrath of a cadre of foes, including lobbyists for multimillion-dollar companies and Washington, D.C., think tanks.
The opposition has arisen despite the measure having a significantly smaller impact than any revenue proposal pitched this year, Senate Revenue Committee Chairman Sen. Cale Case, R-Lander, said Thursday night.
The Wyoming Republican Party has come out in opposition to the bill as well, and conservatives have banded together to speak out against it.
It is designed to affect only “big box” stores and would theoretically allow the state to recapture “hidden taxes” that are already being absorbed by the companies’ large, interstate income pools, said the bill’s sponsor, Rep. Jerry Obermueller, R-Casper.
Early conservative estimates place the potential revenue for the state at $45 million a year, though as Department of Revenue Director Dan Noble testified, that figure was a “wild-ass guess” based on the result of corporate taxes in similar, energy-centric states like North Dakota and Alaska.
The system to collect the tax would cost $10 million to set up and $3 million to maintain, along with $1.5 million for staff — essentially 10 percent of the rough revenue estimate annually.
Obermueller and other supporter of the bill argued that the companies that would be targeting already benefit from an unfair financial advantage in numerous regards, including friendlier treatment under the federal tax code and a multijurisdictional income model that allows industries to spread expenses across a broad consumer base.
Wyoming — considered one of the most business-friendly states in the country due to its lack of a corporate tax — has a unique provision in its tax code that allows companies to essentially write off a significant share of the proposed 7 percent corporate tax rate through property and sales tax credits and other provisions under state law.
“This is not a tax increase on the people on Wyoming,” Obermueller said Thursday. “This is not an increase on small business. This is a tax-return bill in its essence.”
Despite that, industry lobbyists argued that the new tax would cause large companies like Walmart, grocery stores like Safeway and chain restaurants to slash employees, cut hours and decrease community investment.
In a Thursday night hearing on the bill, the largest conference room in the temporary Capitol was packed wall-to-wall with high-priced attorneys, legislative leadership and representatives of groups such as the Council On State Taxation — a Washington, D.C., think tank — and companies like Walmart.
“Quite frankly, I find it incredibly interesting,” said Senate President Drew Perkins, R-Casper, “that we’ve attracted this type of attention when the amount this raises is not a huge amount.”
At the crux of the bill is an effort for the state to essentially end the practice of multimillion-dollar businesses taking advantage of Wyoming’s friendly tax environment in the context of a national tax system.
Despite that inherent advantage, industry voices have called the National Retail Fairness Act “unfair” and discriminatory to multijurisdictional retail and lodging chains.
Of the more than a dozen to speak about the bill Thursday night, only two — representatives for the Wyoming Education Association and the Wyoming School Board Association — spoke in favor of it.
“Nobody runs on raising taxes, but I sure hear a lot of us saying we need to broaden the tax base,” said Ken Decaria, of the school board association. “I’m sure a lot of people have told voters