Tax Benefits of Wyoming Home Ownership.
Why do we live in Wyoming? First of all, consider the fact that Wyoming is the least populated state in the union (even the smaller metropolitan cities are larger in population than our whole state), and Wyoming offers more to do in the great outdoors than Disneyland has rides. How about our abundance of wildlife and recreation? We can go on and on, however…one of the more significant reasons to live here is that Wyoming is one of the most “tax-friendly” states where you can live. Bloomberg Wealth Management magazine cited Wyoming as the most “tax-friendly” state in the country. Brian Jones, a Senior Vice President with the Bank of Jackson Hole offered these 10 good reasons to own a home in Wyoming:
1) No state income tax: With no state income 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 (that’s a couple of generations) 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 (one thing to remember, if you transfer ownership out of your individual names or family trust into a business entity, you will no longer be able to get a secondary market mortgage) 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 (just ask your relatives in Florida what they are paying for property of comparable value) 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 (this may require a small mortgage) 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.