Possible institution of a gross receipts tax most worrisome to small business
The Wyoming Legislature will convene its 2018 budget session February 12 with a look at raising taxes.
Even-numbered years are the time when the Wyoming Legislature meets for the sole purpose of examining the state’s books to align revenues and costs. Although other issues could surface, a two-thirds-vote requirement to bring them up makes it unlikely any will.
NFIB/Wyoming will direct its concentration on what proposals for raising revenues come out of the Joint Revenue Interim Committee, which has been, and will be, holding hearings from the close of the 2017 session to the opening of the 2018 session.
“Priority #: 1,” according to the committee, is to look at “Wyoming tax structure and revenue streams. This topic will include a global review of the current tax structure in Wyoming and will include a review and update of the Tax Reform 2000 report to consider possible future revenue sources. The Committee
will review and identify new revenue sources or diversion of existing revenue streams or sources for the support of generally funded operations of the Wyoming state government and public schools in Wyoming to offset the deficits in state government operations and in public education for school operations, school facilities and major maintenance.”
Tobacco and alcohol taxes, excises taxes, a statewide lodging tax all will come under the committee’s scrutiny, but one, in particular, poses the biggest problem for small business, and it’s not buried in the details, it’s right up top:
“Priority #: 2 Gross receipts tax. This topic will include a study of the opportunities and challenges related to imposing a gross receipts tax in Wyoming. The study will focus on the ability of imposing a gross receipts tax on foreign corporations. The study will review the imposition of gross receipts taxes by states with similar
economies and industries as Wyoming.”
Take no comfort from it being proposed just on “foreign” corporations. In discussions NFIB/Wyoming has had with legal experts, imposing a gross receipts tax on just foreign corporations would invite a constitutional challenge—which could be avoided by imposing the tax on all businesses.
NFIB has fought a gross receipts tax in states that have thought of imposing one and in states that regrettably implemented one because of the harm, or would-be harm, to small businesses everywhere: The tax is on a company’s gross sales—without regard to profit!
If a small business brings in gross sales of $10,000 one month, it’s taxed on that even though it may have paid out $15,000 in labor, inventory, and dozens of other costs for that month. A gross receipts tax makes sure the state gets its cut of your labors, even if you get nothing from them.