TAX BENEFITS OF HOME OWNERSHIP IN WYOMING
There are numerous reasons why those who live in Jackson Hole have chosen to have their “Primary Residences” here. Some of those reasons are emotional, such as the sheer beauty of the natural surroundings and the overall quality of life. Other reasons are more practical in scope and include Wyoming’s overall tax-climate benefits, when compared to all other states. For years, Bloomberg has rated Wyoming as the most tax-friendly state in the U.S. Here are the 10 top tax benefits offered by Brian Jones, a senior vice president at Bank of Jackson Hole.
NO STATE INCOME TAX
With no state tax on personal or corporate income, “you have more disposable income,” Jones says.
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.
NO INHERITANCE TAX OR ESTATE TAX
“Wyoming repealed its estate tax as of January 1, 2005,” Jones says.
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.
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.”
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 one percent.
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.
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.
NO INTANGIBLE TAXES
Wyoming doesn’t make you pay a tax on financial assets like stocks and bonds.
NO TAX ON THE SALE OF REAL ESTATE.
Please contact us to discuss why your most significant tax savings may not be realized through thoughtful tax planning and accounting practices, but by choosing the best location for your primary residence. If you would like any other information at this time or if you would like to speak with a local tax professional, we can easily arrange that for you.