Lawmakers discuss sales tax changes amid property tax cuts
CHEYENNE — The Wyoming Legislature’s Joint Revenue Committee advanced a comprehensive bill draft Tuesday that’s aimed at reorganizing the state’s sales and use tax laws.
The committee also discussed ongoing issues surrounding tax exemptions for data centers and reviewed proposals for stabilizing local government distributions.
Merging sales and use taxes
The committee approved the bill draft, “Sales and use tax reorganization,” which proposes merging the existing sales tax and use tax statutes, Chapters 15 and 16, respectively, into a unified chapter. The primary intent is administrative simplification and improved legislative efficiency.
“We knew it was going to be long,” said Bret Fanning, director of the Wyoming Department of Revenue, of the bill draft. “But then going forward, all bill drafts are shorter if they reference sales or use tax.”
Legislative Service Office Senior Staff Attorney Josh Anderson noted that the merger addresses instances in which changes were previously made to the sales tax code but failed to include conforming changes to the use tax code.
Fanning supported the measure, stating it “absolutely”
makes tax measures easier to implement.
Sen. Cale Case, R-Lander, praised the effort.
“It will be a big bill ... but in the end, this is really a great thing that we’re doing,” he said. “It’ll help our taxpayers and it’ll help us; we’re doing this for the future.”
The reorganization bill is intended not to impose any new taxes, but only to merge and conform existing law.
Ultimately, the committee voted 11-0 to advance the reorganization bill, 26LSO-0201, with a few clarifying amendments.
Data center tax exemptions
Another portion of the meeting focused on broader discussions, rather than bill drafts, regarding sales and use tax exemptions, particularly those benefiting data centers.
Case asked for quantifiable information regarding the revenue impact of these exemptions.
Josh Dorrell, CEO of the Wyoming Business Council, said he did not have exact numbers off the top of his head, but he estimated that the publicly known companies developing data centers in Wyoming have invested hundreds of millions, if not billions, of dollars in the state.
Chairman Rep. Tony Locke, R-Casper, said the lack of direct information is why the committee is discussing the issue, though there is no bill addressing data center tax exemptions for the Revenue Committee to consider.
“There are these exemptions that exist. We have no idea what the impact of these exemptions are, (and) we have very little feel for the overall revenue generated by the data centers because of the reporting requirements being as loose as they are. So, this is, more than anything, an attempt to maybe get some additional detail ... so this committee can make decisions with some data,” he said.
Dorrell later provided more details on the data center tax exemption.
He clarified that the exemption does not cover all taxes.
For Tier 2 data centers (that involve a minimum $50 million investment), which covers many data centers in the state, the exemption applies to crucial components like computer equipment, servers, software, uninterruptible power supplies, backup power generation and specialized HVAC equipment.
The exemption does not apply to construction costs, property taxes or sales taxes on electricity.
Betsey Hale, CEO of Cheyenne LEADS, the economic development agency for Cheyenne and Laramie County, confirmed that data centers have paid $27 million in sales tax during the past seven years, largely due to taxation on power, in the area.
She added that data centers employed 284 people in 2023 and wages paid in that year were $23 million, adding $35 million in economic value to the community. She said state sales tax revenues from this were $700,000 and $100,000 for the county, also in 2023.
“Thirty-seven other states do offer this sales and use tax exemption. Many others also offer a sales tax exemption on the power, and that’s a very big number,” she said.
Hale encouraged the committee to consider mandatory tax reporting, which is currently required, and said she will work to calculate a number for the “opportunity loss” in revenue differences between including or excluding certain tax exemptions.
Dorrell said the tax exemptions are necessary for competitiveness, stating that if a state “doesn’t offer this exemption, it is incredibly unlikely that a data center would choose that state as its location to build.”
Dan Diorio, vice president of state policy for the Data Center Coalition, provided economic impact data and reported that the industry supported nearly 4,000 total jobs in Wyoming in 2023, contributed $365 million to Wyoming’s GDP and generated $26 million in state and local tax revenues.
Addressing the committee’s concerns regarding reporting transparency, Diorio offered that the DCC “stands ready to work with the Wyoming Legislature on reporting requirements.”
David Bush, state government affairs manager with Black Hills Energy, addressed concerns about data centers burdening local power customers, stating that contracts with these large loads are structured so that they do not impact other customers.
This is because Black Hills has a large power contract service tariff that enables them to serve large-load data center customers in Wyoming without turning to ratepayers or taxpayers for support. Instead, the large-load customers must front 100% of the bill.
In places like Cheyenne, taxes from data centers, paired with other business developments, have helped offset losses in property taxes typically received by the municipality.
However, local officials have expressed concern over the inability to fund safety and community services to keep up with community growth, like fire protection for data centers.
Some lawmakers are turning to sales taxes, saying the state should consider distributing more in sales taxes to counties and municipalities, something Gov. Mark Gordon said he supports during a press conference Friday.
Sales tax distribution formula
LSO Budget and Fiscal Administrator Don Richards provided a summary of the state’s 4% statewide sales and use tax distribution, the process by which revenues are allocated among the state’s general fund, counties, cities and towns.
Of the approximately $950 million collected annually, 69% goes to the state’s general fund ($657 million) and 31% ($294 million) is distributed to local counties, cities and towns.
Richards also detailed the “Madden formula,” which provides distribution, historically $105 million, to less wealthy counties (called hardship counties).
Joint Appropriations Committee co-Chair Rep. John Bear, R-Gillette, addressed his committee’s proposal to codify this distribution.
The draft bill, currently under consideration by the JAC, would direct 5.6% of total sales tax collections through the Madden formula, generating an estimated $105.2 million and potentially canceling out the need for the $105 million appropriated by the governor through the Madden formula.
Bear called this move a stabilization effort.
“I saw this as an opportunity to make a more stable amount of money that we’re sending to those local governments, at the same time reducing the amount of angst, if you will, that local governments have as to whether they’re going to get anything,” he said, referencing the recent and potentially continued cuts to property taxes.
Richards noted that while tourism sectors are up, overall collections are affected by volatility in heavy industry, explaining that the current decline in collections is due to mining being down more than 20% because of oil companies purchasing fewer pipes that are subject to sales tax.
On Tuesday, the committee also discussed a bill draft that would revise Wyoming’s property tax exemption rules by defining when land or buildings are “used primarily for a governmental purpose,” to exempt more properties from property taxes.
After more than two hours of discussions, the bill was tabled on a 7-6 vote.
This story was published on Nov. 19, 2025.