Wyoming's lodging tax brings in more than $60 million annually, but not everyone is paying it
SHERIDAN — Like many Wyoming residents, Dalton Goodyear has seen firsthand the influence of tourism — Wyoming’s second-largest economic driver.
Goodyear works in the hospitality industry as the owner of Wyo Stays, a vacation rental company operating out of Sheridan. Since 2017, Goodyear has welcomed 25,000 guests, and in that time, he’s seen Wyoming’s tourism economy grow to $5 billion per year.
“We know that we contribute, and I see the benefit of that,” he said. “I’ve been able to watch our hospitality industry grow.”
Goodyear and other short-term rental owners are required by the state to charge a lodging tax to its customers, in addition to the state’s traditional sales tax. The lodging tax applies to nonlocal guests who stay 29 nights or less in hotels, motels, RV parks, campgrounds, guest ranches, vacation homes and B&Bs. It is not paid by locals.
According to Wyoming's April 2026 tax rate charts, guests staying at Sheridan County establishments are charged 5% for statewide lodging taxes and 2% for local lodging tax. Each vendor is tasked with reporting the amount of lodging tax collected each month back to the state, and the state distributes these dollars to the county government.
Yet Goodyear and others have a growing concern of property owners finding loopholes in Wyoming’s existing reporting system to rent lodging space without collecting or reporting lodging tax revenue.
This form of tax evasion is one of the most common questions the Wyoming’s Department of Revenue Director Bret Fanning is asked, but there’s little the state can do to regulate or monitor the crime under existing state statute.
“We do have Airbnb, Vrbo and a variety of other short-term rental companies licensed through our office,” Fanning explained. “Where the department struggles for compliance is when someone posts a room up on the telephone pole or at the local coffee shop.”
Fanning said there’s no statute in Wyoming requiring businesses to disclose their properties, giving business owners privacy but preventing further regulation and data collection.
“I’ve seen a lot of direct booking channels are just unregulated, unlicensed managers not properly contributing,” Goodyear added. “It’s challenging whenever there’s people able to operate their business without following (Wyoming’s) rules.”
The lodging tax impact
In Sheridan County, the money from the lodging tax is leveraged by the Sheridan County Travel and Tourism Board for marketing and promotional tools to support Sheridan County businesses. The lodging tax history dates back to the 90s, when it was first approved by county voters in 1992.
Back then, the lodging tax collected $21,817 in its first five months. By the following 1994/95 fiscal year, the county generated $113,317 from the lodging tax.
By the 2024/25 fiscal year, Sheridan County collected more than $1 million from the lodging tax.
The revenue increase is due to visitation boosts, which Parker said has remained moderate and consistent. In Sheridan, Parker believes this is a good thing.
“In a small community we don’t want to see massive double-digit growth numbers year after year, as this would mean huge numbers of visitors and strain on infrastructure, crowding at beloved events, restaurants, shops, etc.,” Parker explained. “The visitor economy is critically important to businesses and jobs across Sheridan County - and Wyoming - but it's also critically important to manage that growth so that it generates meaningful economic impact for residents in a way that enhances our living standards.”
The lodging tax is SCTT’s sole source of funding, and Parker said this money goes into a variety of ad and promotional campaigns. In the organization’s most recent spring industry update, SCTT reported two 2025 campaigns bringing in $3.6 million and $2.2 million, respectively, in economic impact.
SCTT tracks each campaign’s success through analytics, impressions and conversions. Parker said he and his staff monitor how long an event keeps visitors in town and how much money visitors are spending, along with hotel, restaurant and attraction reviews.
“Tourism is an extremely competitive industry, and every community in the West depends on visitor dollars to some degree,” Parker said. “It's important that we stay ahead of the game to provide meaningful value for the community with each campaign or program or initiative that we launch.”
SCTT’s proposed 2027 budget is under review and will be released later this month. Parker said all budgeting and spending is approved by its nine-member board and the city of Sheridan.
Contributing to the lodging tax funding this budget are Sheridan County’s 25 hotels and lodges, eight RV parks and campgrounds and three guest ranches listed on SCTT’s website. The list also includes seven B&B and specialty lodging facilities recognized by the SCTT. These properties offer a different experience from a traditional hotel, often providing a multi-bedroom home for groups with kitchens or other home amenities.
Are there others operating outside of that number, and outside of popular booking companies like Airbnb and Vrbo? Parker said he hasn’t heard of significant issues.
But if tax evasion were happening, Parker said he wouldn’t know, and his office wouldn’t be able to do anything about it.
Statute
When the lodging tax is collected by the state, Fanning said it is reported in good faith.
“The Department, the citizens of Wyoming, they’re under the impression that all the tax dollars that were collected… by everyone who stayed at a lodging service actually got reported to the local government and to the Department of Revenue,” Fanning said.
The only way to ensure the taxes were reported correctly is through an audit by the Wyoming Department of Audit, but there’s no mandatory requirement that every lodging establishment needs to be audited once a year — or ever.
“There are a lot of factors that can determine who gets audited and who doesn’t, but that’s also part of the effectiveness of it,” Fanning said. “You don’t know when you’re going to get audited.”
The state also can’t audit properties it doesn’t know exists, and Fanning said Wyoming’s Title 39, Taxation and Revenue does not require a company or individual to disclose a list of properties they rent out to guests.
“There’s no mechanism for reporting… no one entity in Wyoming right now has to collect that (information),” Fanning said.
Fanning believes many Wyoming residents want to know how many short-term properties are being rented in their communities.
“These tourism entities are reliant upon these tax dollars,” Fanning said. “If (Wyoming residents) have someone that’s not compliant in their area, they would want to (help).”
Other regions have implemented regulatory requirements for property renters, but it prevents business privacy. In states like Arizona and Colorado, short-term rental laws vary by city, but busy tourist cities like Denver or Scottsdale have their own permits, licensing and occupancy limits.
Signed into law in 2021, House Bill 134 established a statewide 5% lodging tax, and in its wake, Fanning said the state could see opportunities for statutory change. He’s not sure what the solution looks like, but he is seeing ideas passed around in individual communities.
“Wyoming has started looking at this at the local level,” Fanning said. “Some governmental entities are looking at having local ordinances that either prohibit short-term rentals in their area or require some sort of licensure at the local level.”
As a property owner, Goodyear said he sees the lasting benefit of the lodging tax, but it creates an unfortunate dynamic if a competing property isn’t charging its customers the same fees. Nine times out of 10, Goodyear said visitors who stay in his properties are experiencing something in the city those tax dollars have touched, so he’s received very few complaints.
But Goodyear said there will always be people who cheat the system.
“Unless there’s true, honest infrastructure to support the regulation of (taxes), it’s going to be hard,” he said. “It’s always going to be an honor system to a certain point until it's too late.”
This story was published on June 8, 2026.