Wyoming remains one the most tax-friendly states in the nation year after year. If you are looking to stretch your retirement dollars or protect your estate this can be a very important consideration. Here are 10 good reasons offered by Brian Jones, a senior vice president at Bank of Jackson Hole, why it’s good to make Wyoming your residence:
1. No state income tax: With no state tax on personal or corporate income, “you have more disposable income,” Jones says.
2. Dynasty trusts: In Wyoming, you can shield your real estate from federal estate taxes for up to 1,000 years through a dynasty trust. “You can establish a trust in Wyoming for the benefit of your family or other beneficiaries,” Jones says. “You can transfer your real estate into a limited liability company or family partnership and then put that into the ‘dynasty trust,’ which can continue for a thousand years.” As a result, multiple generations can make use of and enjoy the property, without having to pay estate taxes or worse, having to sell the property in order to pay the taxes. A key point to remember: The trust must be administered in Wyoming.
3. No inheritance tax: “Wyoming can collect a very limited estate tax, which is tied to the federal estate tax credit, but you have to have a very large estate before that would kick in,” Jones says. “But in general, Wyoming doesn’t collect any inheritance tax.”
4. No state gift tax: “Somebody who owns property in Wyoming can ‘gift’ that real estate to their heirs without having to worry about paying a state gift tax,” Jones says.
5. No tax on out-of-state retirement income: “A lot of people in Jackson Hole use Wyoming as a second home,” Jones says. “They have retirement income that comes from other states where they may be a resident. Wyoming doesn’t tax that retirement income that’s earned outside of Wyoming, which is certainly beneficial.”
6. Low property taxes: “Wyoming has very low property taxes compared to other states,” Jones says. “The taxes that you do pay here are based on the assessed value of the property.” For Teton County, he says, the rate is 1.2 percent of a property’s assessed value. The rate for the city of Jackson is 8/10 of 1 percent.
7. No excise taxes: When you fill up your car’s gas tank or buy a bag of groceries in Wyoming, you won’t pay any state tax on your gas or food.
8. No tax on mineral ownership. “A lot of states charge owners a tax on their mineral ownership, but Wyoming does not,” Jones says. “If you own minerals, you won’t pay a tax on it like you would your home.
9. No intangible taxes: Wyoming doesn’t make you pay a tax on financial assets like stocks and bonds.
10. No tax on the sale of real estate.