Understanding Sales Tax

By on August 14, 2009
Understanding Sales Tax

Local Governments bring in revenue from different sources including sales tax.  Teton County relies more heavily on sales tax than other communities in the state.  This has been seen as a good thing because the visitors to Jackson Hole end up paying for a large part of the government services.  Here is how the sales tax is done:

 State Sales Tax          4% (split 69/31 between the State and Local Governments.  Local Governments split up the 31% based on population)

General Revenue           2% (Teton County only does 1%)

Special Excise (SPET)    2%  (Teton County only does 1%)

Economic Development    1% (Only Goshen County does this tax and they only do .25%)

Lodging Tax                     4% (Teton County does not do a lodging tax)

Resort Tax                        3% (Teton Village is the only qualifying area in Wyoming)

Teton County = 4% State Sales Tax + 1% General Revenue + 1% SPET = 6% sales tax in Teton County

Teton Village = 4% State Sales Tax + 1% General Revenue + 1% SPET + 2% Resort Tax = 8% sales tax in Teton Village

State Sales Tax

The 4% state sales tax gets split between the State and local governments through a split of 69% to the State and 31% to the local governments.  The 31% is split up among the local governments based on their population.  Because the Rural Population of Teton County is about equal to the population of the Town of Jackson the 31% of state sales tax is split almost equally between Teton County and Jackson.  I have advocated in the past that instead of the legislature spending so much time on creating confusing distribution formulas every year for giving money from the state to local governments, we should just change the state sales tax split to a 65/35 split.  In the Homestead Property Tax Exemption bill that I have sponsored for the past two years, changing the sales tax split was how I solved the problem of making sure that local governments were left whole in giving a property tax break. 

General Revenue Sales Tax

The General Revenue Sales Tax is collected by the local governments and again split based on population.  There are no restrictions on the use of the general revenue sales tax, so it can be used to support the operations of the county or town.   This tax used to be limited to only 1%.  Two years ago, Rep. Harshman of Casper was successful in changing the cap from 1% to 2%.  This was seen by some as a potential tax swap option.  A tax swap is where you reduce one type of tax and replace it with a different tax.  Since property tax has been such a huge issue in Teton County, there was a push (which I supported) to increase the general revenue sales tax from 1% to 2% and then reduce the property tax mill levies.  In order to accomplish this idea, both the town of Jackson and Teton County had to agree.  The Board of County Commissioners of Teton County voted to do it, but the Jackson Town Council voted no.  Many are still hoping that with a new makeup of the Jackson Town Council there will be a chance to still get the votes to do the tax swap and reduce property tax in Teton County.

Special Excise Tax (SPET)

SPET is very popular in Teton County and has remained in place for more than a decade.   The voters vote unanimously about every 3 years to continue the tax.  The popularity of the tax comes about because the tax is used for specific projects from building the new adult basketball gym at Jackson Elementary to building pathways throughout the valley.  Most of the pathways have been built with SPET funds.  This tax actually could go to 2%, but it is only at 1% in Teton County.

Economic Development Tax

This tax allows communities to collect up to 1% to pay for activities that might encourage businesses to come to their communities.  Goshen County is the only county that has ever used this tax and they only do .25%.  They use the money to pay for an economic development director. 

Lodging Tax

Lodging Tax can be 1, 2, 3, or 4%.  Teton and Sublette Counties are the only two counties with no lodging tax.  (Campbell County just voted to start a lodging tax on January 1, 2009 and Sublette County voted to end their lodging tax on December 31, 2008).  A lodging tax is assessed on hotel rooms. 

Resort Tax

Only Teton Village currently qualifies for this sales tax.  They presently assess 2% and use the money for the major infrastructure improvements that are ongoing right now, in particular the new parking lot.   

Posted: Saturday, December 20, 2008 3:41 PM

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