A measure that would have added 1 cent to the statewide sales tax to benefit local governments was killed in the House on Tuesday as representatives agreed it would hurt the ability of towns and counties to tax themselves.
The House voted 10-50 against House Bill 174, agreeing with arguments it would hamper the ability of residents of towns and counties to vote to impose an optional sales tax on themselves to pay for special projects in their communities.
“We pride ourselves on telling our citizens ‘You get to choose what this tax pays for,’” said Rep. Christopher Knapp, R-Gillette. “This takes that away and makes it mandatory.”
Wyoming tax laws impose a statewide 4% sales tax and allow local governments to impose up to another 3%.
House Revenue Committee Chair Rep. Steve Harshman, R-Casper, said HB174 would have increased the statewide tax to 5% and reduced the local taxes to 2%. The extra statewide 1%, estimated to raise up to $181 million a year, would have been distributed to towns and counties, easing financial strains created with the declines in the state’s mineral industries.
Harshman said the bill would not have imposed a new tax on residents, just changed how the tax is charged.
“This bill does not increase one tax,” he said. “It does not raise one penny in tax.”
But Rep. Chuck Gray, R-Casper, argued that voters would be hesitant to approve local sales tax increases given the higher statewide sales tax.
“This decreases options for the people,” he said during the bill’s third reading in the House. “It makes that first percent mandatory. This decreases people’s voices.”
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