OPINION: Wyoming Retailers Targeted By New, First Ever Corporate Income Tax

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Magnifying Glass and Tax
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The following was written and submitted by Chris Brown, Executive Director of Wyoming Retailers Association.

 

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As the Wyoming Senate considers what would be the very first corporate income tax in
the history of our state, it is important to know that H.B. 220 unfairly imposes a new
corporate income tax on a very narrow and select group of businesses.

The bill arbitrarily targets the retail and hospitality industries and imposes a tax on corporations in those industries with more than 100 shareholders.

Notably, large publicly traded corporations in other industries and privately held corporations in the retail and hospitality industries are not taxed under this bill. H.B. 220 is discriminatory and raises serious constitutional issues.

This new Wyoming corporate income tax has been wrongly portrayed as tax that does
not increase the total tax liability of the taxpayer, i.e., a “net neutral” tax.

While it is true some corporations that would be subject to the new tax may be entitled to a
corresponding reduction in taxes owed to other states, many corporations will not be entitled to any offset. The tax offset is only allowed in states that have a so-called “throwback” rule.

Significantly, roughly half of the states do not have a throwback rule and corporations operating in those states would experience an overall tax increase under the bill.

An income tax would be a new way of doing things in Wyoming and it is important to be
clear – this is a new tax with potential unintended consequences and enormous implications.

This could hurt Wyoming consumers and increase costs on the items that we buy every day. It treats retailers, restaurants, and lodging properties in the same community, selling the same products, very differently by taxing one and exempting the other simply because one is privately held and the other is publicly traded.

As the legislature continues to look at tax reform, they should focus on options that are
inclusive, fair, equitable, and thoroughly vetted.

The Wyoming Retail Association and Wyoming Lodging and Restaurant Association
strongly oppose the discriminatory new tax imposed under this bill.

If you would like more information about this bill please contact WRA Executive Director Chris Brown at (307) 221-1736 or chris@wyoretail.org.