PROPERTY TAXES

Statutory Background and Basis of Property Valuation

Article 15, Section 1 of the State of Wyoming Constitution, states that “All lands and improvements thereon shall be listed for assessment, valued for taxation and assessed separately.”

Article 15, Section 11(a), adopted November, 1988, requires uniformity of assessment. All property, except that which the constitution otherwise provides, shall be uniformly valued at its full value as defined by the legislature. Clause (b) exempts agriculture and grazing lands from the full value requirement and directs that the lands be valued according to the capability of the land to produce agricultural products under normal conditions. The Wyoming legislature felt it important to maintain the lands for ranching and agriculture and believed valuing them at full value could lead to the breakup of agricultural lands into other uses.

The Wyoming State Legislature established in § 39-13-103(b)(B)(ii) that all taxable property shall be annually valued at its fair market value. § 39-13-103(b)(B)(x) states the taxable value of agricultural land is to be based on the current use of the land, and the capacity of the land to produce agricultural products, including grazing and forage, based on average yields of lands of the same classification under normal conditions.

To be considered agricultural land, the land must be used primarily for the purpose of obtaining a monetary profit from agriculture pursuits, and unless legally zoned otherwise. It must be used for agriculture for two years.

The Article 15, Section 11(a)(i-iii) of the constitution prescribes three classes of property: (i) gross production of minerals and mine products in lieu of taxes on the land where produced; (ii) property used for industrial purposes as defined by the legislature; and (iii) all other property, real and personal. The legislature is not allowed to create new classes or sub classes.

The Wyoming Constitution states in Article 15, Section 3 that mines and mining claims, …shall be taxed in addition to the surface improvements, and in lieu of taxes on the lands, on the gross product thereof, as may be prescribed by law; provided, that the product of all mines shall be taxed in proportion to the value thereof.

The state legislature enacted in Wyoming § 39‑11‑101(xiv) that those properties used or held for industrial use are:

(A)Manufacturing, milling, converting, producing, processing or fabricating materials;

(B)The extraction or processing of minerals;

(C)The mechanical, chemical or electronic transformation of property into new products.

Property belonging to non-industrial businesses is classified as commercial property, and along with property owned by agriculture interests and residential real property is considered all other property, real and personal. Wyoming § 39-11-105(a)(xi) excludes all residential personal property from property taxation except mobile homes.[1]

All tangible personal property used in a business is taxable including but not limited to: all furniture, fixtures, machines, computers, software, equipment, telephone systems, tools manuals or libraries, unlicensed vehicles, mobile machinery, along with any small items used in a business. It depends on its use, industrial or commercial, as to how it is assessed. Leasehold improvements must be reported and listed separately. Leased equipment must be listed in detail along with the name and address of the leasing company.

The legislature is to prescribe the percentage of value to be assessed against each class of property. There cannot be more than one rate for each class of property and the taxation is to be equal and uniform within each class of property. Wyoming State Constitution Article 15, Section 11 (b).

Wyoming § 39-13-103(b)(A)(i) states that except as otherwise provided that all taxable property shall be annually listed, valued and assessed for taxation in the county in which located and in the name of the owner of the property on January 1;”

Assessment Ratios of Property

Wyoming § 39-11-101 (xvii) establishes the assessment ratio to determine the taxable or assessment value for the 3 classes of property:

Beginning January 1, 1989 "Taxable value" means a percent of the fair market and production value of property in a particular class as follows:

(A)Gross product of minerals and mine products, one hundred percent (100%);

(B)Property used for industrial purposes, eleven and one‑half percent (11.5 percent);

The property of commercial businesses is valued at 9.5 percent of fair market value for tax purposes. Residential real property, mobile homes, improvements on agricultural land, and agricultural equipment fall in the latter category. Agricultural land is valued at 9.5 percent of productive value..

These ratios were established by the legislatures according to Cynthia Lummis[2], State Treasure and past state representative, for various reasons. Minerals were to be assessed at 100 percent because they are only taxed once whereas other real and personal property is taxed year after year. Industrial property is taxed only two basis point higher than other property to comply with the Federal 4R Act. This act limits the disparity between the taxing of railroads and other property by state governments. Article 15, Section II of the Wyoming constitution meets this requirement by providing that the percentage of value prescribed for industrial property shall not be more than 40 percent higher nor more than (4) percentage points prescribed for property other than minerals. Commercial property is not assessed at the same percentage as industrial property because of the impact on small business. The legislature also felt the percentage for residential properties should be less than industrial in order to mitigate the possibility of a regressive tax.

Property Tax Exemptions and Relief Measures

Exemptions

Wyoming’s property tax exemptions are listed below.

Article 15, Section 12 of the Wyoming State Constitution exempts the property of the United States, state, counties, cities, towns, school districts and municipal corporations used primarily for governmental purposes. Public libraries, lots and buildings used for religious worship, church parsonages, church schools and public cemeteries are also exempt from taxation. The constitution gives the power to the legislature to exempt other property by statute.

Wyoming § 39-11-105 more specifically exempts the above property and those properties exempted by the legislature. These exemptions include: property of non-profit water utilities, fire departments, museums, hospital, water and sewer, water conservancy and irrigation districts.

Property of charitable entities is excluded as long as it is used for non-profit purposes. Property of charitable entities more specifically defined includes that of schools, orphanages, hospitals, secret, benevolent and fraternal organizations, senior citizen centers, and facilities of corporations providing services for the disabled, mentally ill, substance abusers or victims of family violence.

Property owned by non-profit entities used for community fine art’s presentations is exempted. Improvements to residential property are not taxed if they are meant to provide access for handicapped persons. Specific exemptions are given by statute to property owned by the Wyoming Community Development Authority and the Black Hills Joint Power Commission.

Personal property that is excluded includes property held for personal or family use, inventories, in transit property, intangible personal property, livestock, property designed and used underground for mining purposes, pollution control equipment, and fire suppression equipment.

Certain property is excluded because taxes or fees from another source are paid on it. This property includes snowmobiles, mobile machinery if registered and real property owned by the Wyoming Game and Fish Commission.

Relief Measures

1. Veteran’s Exemption - Wyoming § 39‑13-105 allows the exemption for veterans of World War I&II, Korean War, and the Vietnam War. In addition, the exemption is allowed for veterans participating in several foreign military operations including the recent Persian Gulf-Desert Storm operation. The total tax exemption is $800.00. It can be used against county property taxes at a rate of two-thousand assessed dollars per year (depending on mill levies, this equates to approximately $150 per year) or against the county fees for vehicle registration ( up to $60 per year). In all cases the property or vehicles must be deeded or titled in the veteran’s or his spouse’s name. Once the $800 is used, the exemption continues only if the veteran has a service related disability. If the veteran is deceased, the exemption continues for the spouse if they do not remarry and continue to reside in Wyoming. The state appropriates money each biennium to reimburse county governments for veterans’ exemptions.

2. Homestead Exemption – Wyoming § 39-13-109(d)(i) allows for the property of owner occupied dwellings with an assessment value of between $1.00 and $5,850.00 to apply for this exemption which is a credit against the homeowner’s taxes. The county where the exemption is claimed is then reimbursed by the state for the total amount of the exemptions claimed. In order for the exemption to be allowed, the state legislature must appropriate the reimbursements to the counties. The exemption has not been funded since 1990.

3. Property Tax Relief - Wyoming § 39-13-109(iii) allows a taxpayer to apply to the county treasurer for a property tax refund from property taxes paid on time for the preceding calendar year upon his principal residence including the land upon which the residence is located not to exceed two (2) acres. The tax relief is granted to those individuals who meet the poverty guidelines outlined in the statute. The maximum reimbursement allowed is $500.00. This provision sunsets January 1, 2003 unless extended by the legislature.

4. Property Tax Deferral – Wyoming § 39‑13-107 (b)(iii) allows a qualified taxpayer to apply to the board of county commissioners for deferral of the collection of not to exceed one‑half (1/2) of any real estate ad valorem taxes owed by the property owner on his principal residence. The deferral becomes a tax lien against the property with interest accruing on any tax collection deferral at a compounded rate of 4 percent per year. The taxpayer must qualify annually for a continual deferral. Once the taxpayer’s financial condition improves arrangements are made to repay the taxes deferred. If the property is sold, the taxes deferred are deducted from the sale proceeds. This program is a county option. Teton, Sublette, and Sheridan counties currently have the program approved and in place. Teton County is the only county with participants.

Mill Levies

Assessed or taxable value is determined by multiplying the fair market production value of property times the assessment ratio for the property class. A mill is .001 of $1.00 (or 1.00 per $1000 of assessed value). A mill is multiplied by the taxable or assessed value of property to determine the taxes due.

Fair Market or Production Value X Assessment ratio = Taxable Value X .001 = Tax rate/ mill assessed.

$80,000. X 9.5% = $7,600 X. 001 = $7.60

The Wyoming Constitution states the maximum number of mills the governmental entities in the state can assess. The actual number of mills used is at the discretion of the governing body of the governmental entity and depends on the anticipated expenditures that must be funded by the entity for the next fiscal year.

State government can assess up to four mills on the state’s total assessed valuation but these mills have not been levied since 1969, the year the legislature passed the minerals severance tax. There is currently no statutory mechanism to enact the tax. County governments can assess up to twelve mills on the taxable value of the county. Cities and towns are limited to eight mills assessed on the taxable value of the property located in municipal limits.

Both state and local governments collect property taxes for support of schools. The State constitution provides that the state should collect up to twelve mills for schools on the assessed value of all property in the state, the county up to six mills on property in the county. The Constitution in Article 7, Section 9 allows the legislature to make further provision for schools through taxation. § 21‑13‑102 provides that a unified school district can levy up to twenty-five mills and a K-8 district up to twenty mills on the valuation of property within the district. An additional six mills were allowed at the option of the school districts by this statute until the adoption of the new school funding measure was passed by the 1998 Legislature.

In addition, mill levies are assessed by special districts in Wyoming. The mill levies that are allowed for special districts are stated in Wyoming § 39-13-104 (e). Special districts are allowed by state statute to provide special services. School districts are a form of special districts. Wyoming has statutes that allow for the creation of twenty special districts. The creation of a district is usually by vote of the residents residing in the proposed boundaries of the district. Districts are governed by an elected or an appointed board. The maximum number of mills a district can levy is stated in statute. Table 3A describes the districts allowed by statute, their statute citation and the maximum number of mills allowed.

TABLE 3A

District	Statute	Mill Levy Limitation
Cemetery	35-8	3 Mills
Community College	21-18	10 Mills
Conservation District	11-16	1 Mill
County or Municipal Health District	35-1	1 Mill
Downtown Development Authority	15-9	30 Mills
Drainage District	41-9	At discretion of county commissioners
Fire Protection District	35-9	3 Mills
Flood Control District	41-3	12 Mills on real property, only
Hospital District	35-2	6 Mills
Improvement and Service Districts	18-12	At the discretion of property owners residing in the district for bonds and interest.
Irrigation District	41-7	At discretion of county commissioners
Local Improvement District ( public utilities)	37-13	Mills assessed to meet bonding needs.
Museum	18-10	1 Mill
Rural Health Care District	35-2	2 Mills
Sanitary and Improvement District	35-3	1 Mill
Senior Citizen District	18-15	1 Mill
Solid Waste District	18-11	3 Mills
Water and Sewer District	41-10	8 Mills
Water Conservancy District	41-3	1 Mill
Weed and Pest Districts	11-5	2 Mills

Levies are made to pay principal and interest for bonded indebtedness approved by the voters of a jurisdiction for capital improvements. A school district’s debt limit is 10 percent of the assessed valuation if it is a unified district or 6 percent if it is K-8 district. Cities and towns are limited to 4 percent and counties to 2 percent of the assessed value. Certain special districts can assume bonded debt and the limit is between 1 percent and 10 percent of the assessed value depending on the district.

The average number of mills levied in Wyoming in 1998 was 73.3. Taxes on the $80,000. home shown on page 5 would be $557.00 (7.60 X 73.3). The average mills assessed by each type of jurisdiction between 1983-1998 are shown in Table 3B.

TABLE 3B[3]

Mill Levy	1983	1987	1991	1994	1995	1996	1997	1998	Change from 83-98
All Purpose/Statewide	88.542	77.427	76.780	78.016	77.158	77.860	78.551	73.303	7.0%
State	0	0	0	0	0	0	0	0
State School Foundation	12	12	12.00	12	12	12	12	12	0%
County Tax	12.697	11.578	11.721	11.628	11.578	11.567	11.531	11.526	-9.2%
Municipal Tax	8.854	8.061	7.510	7.266	7.279	7.311	7.292	7.303	-17.5%
School Tax	35.867	38.660	39.336	40.304	39.639	40.514	41.893	37.858	5.6%
Special District	10.873	11.211	3.934	4.330	4.542	4.692	4.56	4.616	-57.6%

Administration

Unless provided by law for specific property, the statutes provide that the Wyoming Department of Revenue shall prescribe by rule and regulation the appraisal methods and systems for determining fair market value using generally accepted appraisal techniques. Wyoming Department of Revenue Rules and Regulations establishes the sources by which property tax appraisers can value property.

Wyoming § 39-13-102 (m)(i) through (viii) gives the power of valuation of certain industrial property (state assessed property) to the Wyoming Department of Revenue.

The Department of Revenue shall annually value and assess the following property at its fair market value for taxation:

The gross product of all mines and mining claims; property of pipeline companies; property of electric utilities; property of railroad companies; property of rail car companies; property of telephone and telegraph companies which have more than two thousand dollars ($2,000.00) in assessed value; property of other public utilities; leased property consisting of warehouses, storage facilities and office structures and any other property that is in support of or which is used or held for use for the activities listed in this subsection. If leased property is assessed to the lessee it shall not be assessed to the property owner.

All other industrial property, including above ground improvements and equipment belonging to the mining and oil and gas industries, is valued by local county assessors. The county assessors also value residential, commercial and agricultural property.

State Assessed

Chapter 7 of the Wyoming Department of Revenue’s Rules and Regulations describes the valuation methodology used to determine the taxable value of state assessed public utility and railroad property. The operating section of the Ad Valorem Tax Division of the Department of Revenue is the State Assessment Section delegated the authority to appraise and value all state assessed property. All real and tangible property existing on January 1 of each year shall be subject to assessment except that property exempt by statute.

The reporting of taxable property is the responsibility of the taxpayer. Wyoming § 39-13-107 (b)(ii) requires on or before the dates shown below that any person whose property is state assessed shall sign under oath and submit a statement to the department listing the information necessary to assess the property:

(ii) May 1, rail car companies (see section car companies);

(iii) April 1, pipeline companies, electric utilities, telephone and telegraph companies and other public utilities;

(iv) May 1, railroad companies.

Mineral production reports for gross products (ad valorem) tax valuations are due to the Minerals Tax Division of the Department of Revenue by February 25 per § 39-14.

If a report is not filed or if it is incomplete, the State Assessment section will appraise the company by a best information available method as described in the Department of Revenues Rules and Regulations and subject those companies to the penalties specified in § 39-13-108(c)(ii).

The State Assessment section appraisers utilize three distinct appraisal techniques to estimate fair market value: 1) sales comparison approaches; 2) cost approaches to Value; and 3) income capitalization to value approaches. Section 6 of Chapter 7 of the Department of Revenue’s Rules and Regulations describe these appraisal techniques. One or more of these approaches shall be used to determine fair market value. The property shall fit the assumptions inherent in the appraisal approach, and the appraisal approach should consider the nature of the property or industry, and the regulatory and economic environment within which the property operates.

Once the values are determined by the above approaches, the appraiser shall reconcile the approaches by considering the relative significance, applicability and appropriateness of the indications of value. The appraiser will place the most consideration and reliance on the value indicator which, in his professional judgment, best approximates the value of the subject property.

All interstate public utilities or railroads use a unitary value system.[4] An allocation process is used to reasonably allocate property values in Wyoming. Apportionment is used to distribute the values of state assessed properties among counties or taxing districts. This is especially important for non-situs property, property not defined by legal description, (i.e. miles of pipeline, wire miles, cable miles, transmission lines, and others) and specific investment accounting assets segregated by the above items.

Accurate reporting of company operations for tax assessment is the responsibility of the business entity. Once every four years, the Department of Revenue’s Rules and Regulations requires the Ad Valorem Division, State Assessment Section to physically inspect state assessed properties or a representative sample of such properties. Entities who fail to file the necessary reports for assessment purposes can be charged penalties according to Wyoming § 39-13-108(c)(i)(A-C).

The taxpayer whose property is appraised is notified of a preliminary estimate of fair market value of their property. If the taxpayer has objections to the assessment, within ten days of receipt of his preliminary estimate of value, he may request an informal conference with the Department of Revenue, Ad Valorem Division, to provide information as to any error of fact for the company.

A formal notification of assessed value is required by Wyoming § 39-13-102 (n). If the taxpayer feels the values established in this notice are incorrect, an appeal can be filed within 30 days of the postmark of the notification with the State Board of Equalization.

Wyoming § 39-13-102 (o) establishes dates by which the State Assessment Section and the Minerals Tax Division must certify to county assessors the valuations determined by the department for state assessed real and personal property:

(i) June 1 and no later than July 1, mines and mining claims, pipeline companies, electric utilities and other public utilities;

(ii) First Monday in June, telephone and telegraph companies;

(iii) First Monday in July, railroad companies.

County Treasurers are responsible for collecting the property taxes generated by the assessment value of state assessed real and personal property except for rail cars

Car Companies

Wyoming § 39‑13‑103(b)(xvi) legislates the method by which rail cars are to be valued and taxed. Chapter 8 of the Department of Revenues Rules and Regulations describes the annual reporting requirements of rail car companies, the valuation methods and tax billing and collection procedures. The State Assessment Section of the Ad Valorem Division of the Department of Revenue is the operating section for the valuation of rail cars. There are three major differences between the property tax procedures for rail cars and those of other state assessed industrial properties:

1) Valuation is to be fair market value for each particular class of car. Fair market value is determined by using the market information available, class specific costs, sales and income information submitted by taxpayers, data from surrounding state governments, and recognized value publications.

Each car owned is not valued separately. The number of cars for which each company is assessed is determined by the average number of cars necessary to make the Wyoming miles. Chapter 8, Section 6(iii) of the Department Rules and Regulations details the information and formula used to determine the number of cars assessed.

2) Rail cars are industrial property. The level of assessment is determined by multiplying 11.5 percent times the fair market value. The amount of tax due is determined by multiplying the assessed value times the statewide average mill levy as specified in Wyoming § 39-13-104 (g).

The department shall each year make a levy equal to the statewide average county, school district and state levy for the year immediately preceding against the values assessed for each of the counties through which the rail cars may have been operated.

3) The Department of Revenue collects the tax due from each taxpayer rather than the county treasurers and then through the state treasurer distributes the taxes collected to the respective county treasurers. Wyoming § 39-13-104 (g) continues:

When the tax due is determined, the department shall send to each owner a statement of the amount of the assessment, the rate of levy and the amount of tax due, which shall be paid to the Department of Revenue. When all these taxes have been collected the state treasurer shall pay to the respective county treasurers the amount due their counties.

The amount paid each county is determined by the track mileage in the county. The county treasurer distributes the car company taxes received per Wyoming § 39-13-111(a)(iii).

The county treasurer shall credit all these taxes to an account within the trust and agency fund and after the regular state, county and school district levies are made, distribute them in the same manner property taxes are distributed.

Motor Vehicle Property Taxes

Wyoming residents and businesses pay a county property tax on motor vehicles and trailers owned and operated for road use. The tax rate is 3 percent of the factory cost of the vehicle or trailer adjusted for its age. The tax is the county registration fee and is in addition to the sales tax paid on the vehicle at the time of purchase.

Wyoming residents pay the tax in the county treasurer’s office when the vehicle is registered and it is renewed annually. The county treasurer also collects the state registration fee which is a flat fee varying according to the type of vehicle being registered.

The county treasurer credits the county registration fees to an account within the trust and agency fund and after the regular state, county, and school district levies are set, distributes them in the same manner as property taxes.

Locally Assessed Properties

Wyoming § 18-3 outlines the duties of county assessors. Assessors determine the fair market value for local assessed properties annually and commercial personal property, maintain a current record of property characteristics and veterans’ exemption records, research public records to determine ownership, review mobile homes annually and perform or contract out locally assessed industrial appraisals. The county assessor maps all tax district boundaries and agricultural land based on use and soil. The assessor has the authority to grant or deny exemption status to locally assessed property. They administer state assessments and defend values and testify in appeals.

The Wyoming Department of Revenue, Ad Valorem Division provides support functions to local assessors:

The Department prescribes appraisal methods and systems for determining fair market value. The Department maintains a computer assisted mass appraisal (CAMA) system housed on the State of Wyoming main frame for this purpose. The Department is responsible for programming and the assessors maintain and input data. Assessors have the option of determining fair market value by using the BOECKH program based on cost (WYS system) or the CLT based cost system (MAS system). Eleven counties use WYS and 12 counties MAS. Both systems are capable of using multiple regression analysis (MRA), sales ratio analysis and vertical and horizontal assessment adjustment system (VHAAS) to arrive at market value.

The department downloads values to the assessor’s computer system in order to generate assessment schedules, compile the abstract and provide the tax roll to the treasurer’s office.

The department publishes rules covering all aspects of the valuation and assessment systems and provides for uniform interpretation of the statutes among counties. The department produces the “Wyoming Personal Property Valuation Manual”, the “Wyoming Appraisal Manual”, “Mapping and Agricultural Manual” and the “Tax District Designation Manual”.

The department monitors work in progress for each county assessor’s office to determine that procedures and formulas promulgated are being strictly applied.

During their 1988 session, the legislature adopted education requirements for local county assessors and each person in the assessor’s office. The assessors and their employees are required to be certified as property tax appraisers and receive annual training to maintain certification. The Department of Revenue funds the cost of the courses for certification. County governments are required to provide travel expenses.

The State Board of Equalization establishes the standards and procedures that the county assessors use in equalizing values across counties within the state. They also act as the hearing board for appeals from County Boards of Equalization and the Department of Revenue. They promulgate the rules to establish procedures for processing information disclosed in the statement of consideration. This document must be completed at the time of transfer of all real estate to disclose the sale price and sale provisions to the county assessors office and is used in the process of determining fair market values.

As is the case with state assessed industrial property, the responsibility of reporting commercial, agricultural and locally assessed industrial taxable property is that of the taxpayer. County assessors are required to review all properties every 4 years.

The taxpayer must submit a statement to the county assessor of taxable personal property by March 1 of each year. The Department of Revenue, Ad Valorem Division, does have forms that county assessors can use for taxpayers to meet the reporting requirements. There are individual forms for oil field equipment and drilling/well service work over/seismic rigs. All other commercial, agricultural and locally assessed industrial personal properties are reported on the “Statement of Personal Property, Tax Year 19--, Merchants, Manufacturing, Construction, Equipment, Professional”. County assessors can develop and use their own forms.

Once initial personal property information is received from the taxpayer, the county assessor can enter it into the Computer Assisted Mass Appraisal (CAMA) sub system developed by the Department of Revenue. The information contained in this file is used to generate letters and forms sent to businesses each year requesting updated reports/renditions of personal property. The forms, sent in January or before, include an itemized listing of the personal property previously reported. The taxpayer is asked to correct, delete, or add new items and return it to the assessor by the due date.

The county assessor can use their own developed appraisal systems with the Department of Revenue’s prior approval or under written agreement with the Ad Valorem Division, the CAMA system. The system values all real and personal property except property for which narrative appraisal or other recognized approaches to value are used as a substitute to the CAMA system.

Fair market value is determined by utilizing three approaches to value: 1) sales comparison approaches; 2) cost approaches to Value; and 3) income capitalization to value approaches. Section 6 of Chapter 9 of the Department of Revenue’s Rules and Regulations describe these appraisal techniques. One or more of these approaches shall be used to determine fair market value. The property shall fit the assumptions inherent in the appraisal approach, and the appraisal approach should consider the nature of the property or industry and the regulatory and economic environment within which the property operates.

In addition, the valuation methodology for personal property must reflect the trade level at which personal property is found and shall account for factors influencing the value in place including utility, usefulness to the owner or the actual income produced. The “Wyoming Personal Property Valuation Manual” aids county assessors in the valuation process and does include a mobile/manufactured home index for determining the fair market value of mobile homes.

The taxable value of agricultural land is based upon the current use of the land and the capacity of the land to produce agricultural products, including grazing and forage, based on average yields of land of the same classification under normal conditions. It is the Ad Valorem Divisions responsibility to determine the taxable value of agricultural land. Valuation figures for agricultural land for assessment purposes shall be based upon the Department of Revenue’s “Mapping and Agricultural Manual” which is published annually by the Department.

It is the County Assessor’s responsibility to determine the type or class of agricultural land to be valued. To this end, the assessor has the statutory discretion to determine the productivity value within the appropriate high or low ranges based on, but not limited to: local review of agricultural land property, productivity conditions; mapped soil classifications; land resource areas; tabulated acreage; and actual conditions.

Once the fair market value of residential, industrial, personal and commercial property and the productive value for agricultural lands is determined, the appropriate percentage is applied to generate taxable value: 11.5 percent for industrial and industrial personal property and 9.5 percent for all other personal property. Wyoming § 39-13-103(a)(vii)-(viii)establishes the procedure by which the taxpayer is notified of the taxable value of his property.

The county assessor on or before the fourth Monday in April, or as soon thereafter as practical, shall mail assessment schedules to all taxpayers except those with state assessed valued property. The assessment schedules shall contain the property’s estimated fair market value for the current and previous year. It shall also contain the assessment ratio; the amount of taxes assessed from the previous year and an estimate of the taxes due based on the previous year’s mill levies. The statement must inform the taxpayer how he can contest his property assessment.

Tax Payment

Ad valorem taxes, for local and state assessed property except car companies, are billed from and paid to each Wyoming’s county treasurer’s office. Each treasurer is required by Wyoming § 39-13-107 (b)(i)(C), after receiving the tax list from the county assessor, to send a statement to each tax payer on or before October 10. Taxes can be paid in two installments or in one payment. If the installment option is chosen the first installment is due between September 1 and November 10, the second installment is due between March 1 and May 10. If the entire tax is paid on or before December 31, there will be no interest or penalty charged.

Enforcement

If taxes are not paid by May 11, the county treasurers can initiate enforcement measures.

County treasurer declares taxes not paid as delinquent as of the day they were payable and assesses interest of 18 percent per annum until paid or collected.

Taxes upon real property are a perpetual lien upon the property against all persons excluding the United States government and the State of Wyoming. Taxes upon personal property are lien upon the personal property owned by the person against whom the taxes were assessed. If the property is transferred before the taxes are paid, the taxes can be collected from other real or personal property of the transferor or from the proceeds of the sale of the property.

Real and personal property can be sold by the county for failure to pay taxes, interest and penalties. The party that purchases the property is given a certificate of purchase which entitles them to control of the property until they can apply for a tax deed, which gives them ownership of the property. During the time they have control of the property, they must continue to pay the taxes on the property. The procedures for tax sales are set forth in Wyoming § 39-13-108.

Taxpayer Remedies

To contest a property assessment, the taxpayer must file not later than thirty (30) days after the postmark date of the assessment schedule, a statement with the county assessor. The county assessor and the taxpayer will attempt to settle their disagreements over the taxable value. If they are not successful, the issue is brought before the County’s Board of Equalization for settlement. The county commissioners sit as the County Board of Equalization. Rulings of the County Board of Equalization can be appealed to the State Board of Equalization and from there to the Wyoming court system.

Taxpayers who have over paid their taxes or who have paid their taxes and who upon appeal have had their taxes reduced can be granted refunds by order of the county commissioners. A refund can also be in the form of a credit against future tax payments for a period not to exceed five years.

Taxpayers who have had real property sold at a tax sale do have six years in which to redeem their property. This provision also applies to lien holders of the property. The parties redeeming the property must not only pay all past due property taxes, but the interest and penalties that have accrued. In addition, the certificate of purchase holder on the property must also be reimbursed for their expenses.

Taxpayers who have paid taxes under protest subject to an appeal before the State Board of Equalization or competent jurisdiction, must have the taxes under appeal placed in an interest bearing escrow account by the county treasurer. To the extent that the taxpayer prevails, the county treasurer is to refund the taxes plus interest within thirty days of the decision.

All personal property taxes not collected within ten years from the time they were levied shall be cancelled and consider uncollectable. Property that has been omitted from the tax roll and later discovered by the county assessor can only be assessed back taxes for a period of five years.

Collections and Distribution

Tax Collections

Property tax plays an important role in financing local governments in Wyoming. More so in Wyoming than in surrounding states. The map below shows the property tax revenue in surrounding states and Wyoming as a percent of the total of three tax revenues, sales tax, property tax, and income tax.

27.7%

30.3%

36.0%

45.9%

40.5%

34.8%

64.3%/

54.8%

57.2%/

44.3%

Wyoming does not have an income tax and Montanadoes not havea personal sales tax.

The first number showing on the map ofWyoming is thepercentage of property tax collected from the total of propertyand salestaxes. The second numberincludes themineral severance tax as the third tax. Wyoming is more in line with surrounding states when thistax isincluded. The firstfigure on theMontana map is the percentage of property tax collected from thetotal ofproperty and income tax collected. Thesecond figure includes the business sales taxes includingseverance taxes asthe third tax. Even with these taxes, Montana’s property tax percentage of tax revenues ishigh.

The assessed value of minerals is thepredominant source ofproperty taxes in Wyoming.

The Table 3C below shows the history of theassessed valueof minerals in relation to the state’s total assessedvalues. It also depicts total taxescollected andthe portion attributed to minerals. The assessed valuation shownwas determinedthe year prior to when the tax

TABLE3C

Year

Assessed

TotalAssessed Value

AssessedValue fromMinerals

MineralValues as a % oftotal values

Year taxespaid

TotalProperty Taxes

TaxesCollected fromminerals and mineral related

Taxes fromminerals as % oftotal taxes

1969

1,317,876,063.00

1970

78,273,440.00

25,667,876.00

32.79%

1974

2,168,456,373.00

1975

131,082,890.00

56,781,222.00

43.32%

1979

4,515,133,799.00

1980

298,415,206.00

162,726,224.00

54.53%

1984

8,389,156,815.00

5,987,627,146.00

71.40%

1985

565,740,057.00

393,652,409.00

69.58%

1989

6,074,431,051.00

3,772,814,316.00

62.10%

1990

412,013,986.00

247,692,543.00

60.01%

1993

6,291,213,307.00

3,523,774,856.00

56.01%

1994

436,644,341.00

237,229,568.00

54.33%

1994

6,231,754,659.00

3,316,362,145.00

53.22%

1995

430,007,453.00

221,575,958.00

51.53%

1995

6,423,400,855.00

3,298,317,781.00

51.35%

1996

450,010,743.00

223,879,371.00

49.75%

1996

7,145,869,312.00

3,876,129,226.00

54.24%

1997

509,052,515.00

267,438,424.00

52.54%

1997

7,441,470,939.00

4,017,611,483.00

53.99%

1998

500,551,425.00

263,271,161.00

52.60%

was actually collected. The peak year for minerals was 1985. Since that year there has been a sharp decrease inproperty taxescollected on minerals due to a decrease in oil exploration andproduction andlower market prices for oil and gas, coal and other minerals.

Chart 3A graphs the sources of Wyoming’sassessed valuefrom 1985 to 1998 using percentages. In the mid-eighties, mineralproductionaccounted for over 70 percent of the total assessed value. This percentage hascontinuously decreasedsince 1985. In 1996, mineral and non-mineralproduction wasalmost equal. This is further supported by the lines at thebottom of the chartwhich depict the assessed value of specific minerals and othertypes ofproperty. Coal assessedvalues haveremained relatively stable since 1987 with a slight downturn in1997. The priceper ton of coal continues to decrease, though production hasincreased.

Onthe other hand,residential values increased from 1994 to 1996 and leveled off in1997. One reason for this is thatthe Departmentof Revenue and the State Board of Equalization has been workingwith countyassessors to assure that taxation is equal and uniform within theresidentialtype of property. Thismeans thatresidential property throughout the state is valued by all countyassessors atfull market value. Agricultural values,industrial values and commercial values all took decreases from1996-1997.

Chart

It is interesting to note in Chart 3Athat up until1993, total assessed valuation and mineral valuations followedthe path of oilproduction. After 1993, total assessed valuation increases everyyear but mineralvaluation and oil valuation decrease with a slight increase in1997.

Mineral productionhas amounted to over 50 percent of the states total assessedvaluation. What is also notable is theassessedvaluation of improvements and personal property owned by mineralrelatedbusinesses. Table 3E shows the breakdown of locally assessedvalues betweenmineral related businesses and all other industrial property from1994-1997.

TABLE 3D

Total AssessedValue

LocallyAssessed Industrial Property

Assessed Valueof Locally Assessed Mineral RelatedProperty

Mineral RelatedPercentage of Total

1994

631,666,203.00

476,495,394.00

75.43%

1995

615,519,991.00

471,306,480.00

76.57%

1996

630,199,311.00

555,434,756.00

88.14%

1997

639,622,556.00

570,874,410.00

89.25%

1998

659,506,197.00

571,355,813.00

86.63%

TaxDistribution

Property TaxDistributions can first be considered by understanding whatlevels ofgovernment receive property taxes, and then by seeing within eachlevel how thetaxes are distributed among the individual entities.

Chart 3B depicts whatlevels ofgovernment were funded by property taxes in 1998.

Thefour millsauthorized by the Wyoming constitution have not been authorizedby the StateLegislature since 1969. The Stategeneral fund does not receive any revenues from propertytaxes. School district’s are thechief benefactorof property taxes in Wyoming. Theyreceived 12 mills from a statewide levy, 6 mills from a countylevy and 25mills from a school district levy for a total of 43 mills. Thepercentage shownin Chart 3B reflects the taxes generated by the optional 6 millsschooldistricts could assess at this time and the tax revenues fromlocally approvedmills for bond and interest used to fund capitalconstruction.

Thepercentage shownfor counties reflects the 12 mills counties can levy asauthorized by theWyoming Constitution. Thecity/townpercentage is the 8 mills allowed.

CHART 3B

PROPERTY TAXES

All Governments

1998

StateGovernment

0.00

CountyGovernment

88,187,397.00

City/Towngovernment

12,373,623.00

SchoolDistricts/HigherEducation

377,916,476.00

SpecialDistricts

26,194,556.44

There is a largedifference between taxes distributed to counties and thosedistributed tocities even though there is only a 4 mill levy difference. Theassessedvaluation of cities does not include mineral valuations since themining ofminerals takes place outside city limits. School districts, counties, special districts andcommunity colleges alldo benefit from mineral production.

Thelegislaturecannot increase the amount of mill levies allowed cities andtowns since theyare established by the constitution. Tocounteract this problem, the legislature has diverted sales taxand severancetax revenues as well as federal mineral royalties to cities andtowns. This mayalso account for the growth in the adoption of the local optionsales taxes.

Insome instancesproliferation of special districts with independent taxingauthority is anotherway in which mill levy limits of cities, towns, and counties havebeenskirted. Specialdistricts received 5percent of property tax distributions, third highest of alllevels ofgovernment. Add to this what is distributed to community collegedistricts, thepercentage increases to 12.2 percent, a little over one-percentpoint behindcounties. Table 3Fcompares municipalvaluations to county valuations and includes the number ofspecial district ineach county in 1998

TABLE 3E

County

Assessed Valuation

Number of Municipalities

Valuation ofMunicipalities

% of

County

Number of

Special Districts

Albany

149,948,849

95,331,533

63.58%

BigHorn

129,577,299

17,331,448

13.38%

Campbell

1,495,260,165

70,509,564

4.72%

Carbon

357,009,725

41,793,173

11.71%

Converse

286,990,621

23,658,637

8.24%

Crook

86,103,328

10,314,907

11.98%

Fremont

288,982,662

70,611,686

24.43%

Goshen

70,791,567

21,549,617

30.44%

HotSprings

92,180,926

11,252,011

12.21%

Johnson

79,671,264

16,999,226

21.34%

Laramie

396,377,730

248,195,742

62.62%

Lincoln

445,074,789

24,243,547

5.45%

Natrona

416,733,395

173,052,445

41.53%

Niobrara

33,275,890

4,970,655

14.94%

Park

319,181,952

67,492,894

21.15%

Platte

125,945,935

48,503,672

38.51%

Sheridan

124,588,912

4,006,748

27.30%

Sublette

376,372,632

12,117,201

3.22%

Sweetwater

1,167,481,755

160,016,277

13.71%

Teton

379,656,703

89,777,763

23.65%

Uinta

462,868,967

44,956,067

9.71%

Washakie

96,244,905

24,403,843

25.36%

Weston

61,148,238

10,151,209

16.60%

Total

7,441,468,209

1,321,239,865

17.76%

272

Within each levelof government, taxes are distributed based upon the assessedvaluation of thegeographical boundaries of the specific governmental entity. As discussed above, cities andtowns do notgenerate assessed valuation from minerals. Their tax base is primarily limited to residentialproperties with somecontribution from commercial properties. Counties, special districts, community colleges and schooldistricts alldo benefit from mineral production, but not equitably. Wyoming’smineralproduction is not spread evenlythroughout the state.

Table 3F on page22 compares the 1998 property tax capacity across countylines. It displays what one millgenerates in totaltaxes and in non-mineral taxes. Itshows the percentage for assessed valuation from minerals andfromnon-minerals. It rankscounties in fourcategories.

Though, mineralproduction represents over half of Wyoming’s property tax base,reliance onmineral production varies widely from county to county – fromover 80 percentof Campbell County’s assessed value to just one-tenth of onepercent of TetonCounty’s tax base. Relative taxcapacity also varies dramatically among Wyoming counties. InCampbell County,for example, one mill raises almost $1.5 million, while NiobraraCounty cangenerate only $33,275. This may be onereason a few counties and special districts have not had to usetheir totalmill levy capacity as allowed by the Constitution. Table 3F showsthe milllevies adopted by counties in 1998 total taxes, tax per mill levyand tax percapita. There is a tremendous variation between the dollar amountof taxesgenerated per mill and the taxes per capita for each county.

TABLE 3F

COUNTY

1998 Estimated

Population

1998

County MillLevies

1997 Total

Assessed Value

1998 Total

Taxes

Property Tax RevenuePer

Capita

Tax Value

Per Mill

Albany

31,130.00

12.000

149,948,849

1,799,386.19

58.04

149,948.85

BigHorn

11,490.00

12.000

129,577,299

1,554,927.59

141.36

129,577.30

Campbell

32,450.00

11.038

1,495,260,165

16,504,681.70

532.41

1,495,260.17

Carbon

15,830.00

12.000

357,009,725

4,284,116.70

267.76

357,009.73

Converse

12,150.00

12.000

286,990,621

3,443,887.45

286.99

286,990.62

Crook

5,810.00

12.000

86,103,328

1,033,239.94

172.21

86,103.33

Fremont

36,500.00

12.000

288,982,662

3,467,791.94

99.08

288,982.66

Goshen

12,790.00

12.000

70,791,567

849,498.80

65.35

70,791.57

HotSprings

4,660.00

12.000

92,180,926

1,106,171.11

221.23

92,180.93

Johnson

6,800.00

12.000

79,671,264

956,055.17

136.58

79,671.26

Laramie

80,420.00

12.000

396,377,730

4,756,532.76

60.98

396,377.73

Lincoln

14,140.00

9.369

445,074,789

4,169,905.70

297.85

445,074.79

Natrona

64,520.00

12.000

416,733,395

5,000,800.74

78.14

416,733.40

Niobrara

2,660.00

12.000

33,275,890

399,310.68

133.10

33,275.89

Park

25,850.00

12.000

319,181,952

3,830,183.42

153.21

319,181.95

Platte

8,540.00

12.000

125,945,935

1,511,351.22

188.92

125,945.94

Sheridan

25,580.00

12.000

124,588,912

1,495,066.94

59.80

124,588.91

Sublette

5,710.00

10.266

376,372,632

3,863,841.44

772.77

376,372.63

Sweetwater

40,450.00

12.000

1,167,481,755

14,009,781.06

341.70

1,167,481.76

Teton

13,950.00

9.110

379,656,703

3,458,672.56

266.05

379,656.70

Uinta

20,490.00

12.000

462,868,967

5,554,427.60

277.72

462,868.97

Washakie

8,720.00

14.939*

96,244,905

1,437,802.64

159.76

96,244.91

Weston

6,570.00

12.000

61,148,238

733,778.86

104.83

61,148.24

487,210.00

7,145,869,313.00

85,221,212.22

177.91

323,542.10

* Includes 12.000 county mills and 2.939 county bonds andinterest.

MINERALTAXES

Statutory Backgroundand Basis ofProperty Valuation

Wyoming is one of few states that levies botha property taxand as a privilege to extract or severance tax on minerals. The property tax on mineralswas consideredgenerally in the previous section. The discussion that followsconsiders theseverance tax on minerals and relates the similarities andnon-similarities ofthe two mineral taxes.

A severance tax according to Wyoming §39-11-101(a)(ix)defines severance tax as an excise tax imposed on the present andcontinuingprivilege of removing, extracting, severing or producing anymineral in thisState.

Chapter 14 of Title 39 dictates the proceduresfor thecollection of mineral taxes in Wyoming. There are 7 articles in this chapter, each dealing with aspecificmineral. The minerals are: 1) coal 2) oil and gas 3) trona 4)bentonite 5)uranium 6) sand and gravel and 7) other valuable deposits. Each article is furtherdivided into eleven(11) sections that address specific procedures as they apply toeachmineral. These sectionsare 101)Definitions, 102) Administration, confidentiality, 103)Imposition, 104) TaxRate, 105) Exemptions, 106) Licenses, Permits, 107) Compliance;collectionprocedures, 108) Enforcement, 109) Taxpayer remedies, 110)Statute Limitationand 111) Distribution.

The determination for the imposition of taxesis the samefor both ad valorem (gross product) and severance taxes. Theprimary differencebetween the valuation of minerals for ad valorem and severancetaxes is thetime of reporting and payment. AdValorem taxes are figured on the total production of the previousyear. Severance taxes are figuredand reported onthe current month’s production.

The point of valuation for oil and gas is atthewellhead. Valuation ismade prior toany processing or transportation expense. If the product is not sold prior to the point of valuationin abona-fide arms length sale or if used without sale, valuation isdetermined byusing one of the following methods: 1) comparable sales, 2)comparable value,3) net back, 4) proportional profits or 5) method agreed uponbetween theoperator/owner and the Wyoming Department of Revenue. Net back isan allowablemethod for production years prior to 1990 and is an allowablemethod forproduction years beginning in 1990 with the exception of gasprocessed fromjoint venture owned gas plants. The methods are described in thedepartment’sRules, Chapter 6 Section 10; and in Wyoming § 39-14-203.

Valuation of coal sold at the mouth of themine withoutfurther movement or processing is the fair cash market value asestablished bya bona-fide arms length sale less exempt royalties. Exempt royalties are those royalties for interestsowned by theUnited States, State of Wyoming or an Indian tribe.

For coal sold away from the mouth of the minein a bona-fidearms length sale, ad valorem, all royalties, production taxes,severance taxes,black long excise taxes, and abandoned mine land fees arededucted from theF.O.B. mine sales price. The resulting price is then multipliedby the ratio ofdirect mining costs to the total direct costs. To the resulting amount non-exempt royalties, ad valorem,productiontaxes, severance taxes, black lung excise taxes, and abandonedmine land feesare added back to determine the fair market value of coal.

The sales value of coal, used without sale ornot soldpursuant to an arms length agreement, is the same as coal that iscomparable inquality, quantity, terms, and conditions which is sold both inthe spot marketand through long-term agreements negotiated within the previoustwelve months.This value is multiplied by the respective number of tons used orsold for eachreporting period.

The determination of the 100 percent fair cashmarket valueof the gross product of other minerals is determined at the pointat which themining or production of the mineral is completed, usually themouth of themine. When a solidmineral is sold atthe point of valuation pursuant to a bona-fide arms length sale,the salesprice shall be the fair cash market value. When a solid mineral is sold at a point other than thepoint of valuation,the fair cash market value shall be determined in accordance withrecognizedappraisal techniques. These techniquesinclude the cost approach and the comparison approach and aredescribed inSection 10, Chapter 6 of the Department of Revenues Rules andRegulations.Specific rules for valuation are provided for trona, uranium andbentonite.

Rates

The ad valorem taxes paid on minerals aredetermined as wasdiscussed in the property tax appendix of this report. The 100 percent fair marketcash values asdetermined above are multiplied by the mill levies of theappropriate taxingjurisdiction.

Article 15, Section 19 of the WyomingConstitution statesthat the legislature shall provide by law for an excise tax onthe privilege ofextracting minerals of 1.5 percent on the gross value of themineralextracted. Mineralssubject to the taxare coal, petroleum, natural gas, oil shale and others asprescribed by thelegislature. Such tax is in addition to any other excise,severance or advalorem tax on the minerals. Severance tax rates will varydepending on themineral produced. The following table presents the tax rates foreach class ofmineral including the constitutionally required 1.5 percentrate:

TABLE 4A

Coal

Surface coal– (i) 1.5%

(ii) .5%

(iii) 2.0%

(iv) 1.5%

(v) 1.0%

(vi) .5% - Total7%

Undergroundcoal- (i) 1.5%

(ii) 1.25%

(iii) 1.0% -Total 3.75%

Oil andGas

(i) 1.5%

(ii) .5 %

(iii) 2.0%(1.0% if oil is $20.00 or less perbarrelbetween 1/1/99-12/31/00)

(iv) 2.0%(1.0% if oil is$20.00or less per barrel between1/1/99-12/31/00)

Total 6% (4%if oil is $20.00or less per barrel between1/1/99-12/31/00)

Trona

(i) 2.0%

(ii) 2.0% -Total 4%

Bentonite

(a) 2.0%

Uranium

(i) 2.0%

(ii) 2.0%-Total 4%

Sand andGravel

(a) 2.0%

OtherValuable Deposits

(a) 2.0%

Exemptions, Incentives and ReliefMeasures

Coal

(i) Ad valorem and severance taxes

a. Coal has no value if it is consumed prior tosale for thepurpose of treating or processing coal produced from the samemine.

(ii) Severance taxes

a. If the severance tax on a ton of coal exceeds.60 per ton forsurface-mined coal and .30 per ton for underground coal, the coalis exemptfrom the tax which exceeds the maximum amount per ton.

1. New contracts or modification of an existingcontract ifentered into between March 31, 1987 and December 31, 2003.

2. This exception is subject to meeting certainconditions.

a.) The coal is consumed outside of the state, ormeets certainproduction requirements if consumed within the state, or ifconsumed within thestate replaces a coal source from outside the state.

b.) The new contract is not the result of replacingthe contractof another Wyoming producer.

Oil and Gas

(i) Severance Taxes

a. Stripper 15 production is exempt from (iii)providing for a 4percent tax rate on production less than 15 barrels per day whenthe averageprices is less than $20 per barrel.

b. Crude oil extracted from collection wells priorto January 1,1999 is exempt from (ii),(iii)&(iv) for a net tax of 1.5percent.

c. Tertiary production after July 1, 1985 andbefore March 31,2003 is exempt for (iii) for the first five years of productionfor a net taxof 4 percent.

d. If carbon dioxide gas is used in the productionof crude oilby tertiary techniques, the severance tax paid on the carbondioxide gas isdeducted from the tax due on the crude oil production.

e. Crude oil or gas produced by a wildcat wellbetween January 1,1991 and December 31, 1994 is exempt from (iii) and (iv) for fouryears fromthe first date of production for a net tax of 2 percent.

f. Crude oil or natural gas produced other thanfrom collectionwells between July 1, 1993 and March 31, 2001 is exempt from(iii) and (iv) for2 years providing up to 60 barrels oil per day or 6 MCF of gasper day or untilthe price of oil equals or exceeds $22.00 per barrel or the priceof gasexceeds $2.75 per MCF for the preceding six months. The net rate is 2 percent and this exemption cannotbe usedif c. or e. above isused.

g. Incremental crude oil or natural gas productionresulting froma work-over or re-completion of an oil or gas well between Jan.1, 1997 andMarch 31, 2001 is exempt from (iii) and (iv) for 2 years. The netrate is 2percent and this exemption cannot be used if c. or e. above isused.

h. Crude oil produced from previously shut in wellsis exemptfrom (ii), (iii) and (iv) for a period of 5 years or until thecost of a barrelof oil equals or exceeds $25.00 for the previous 6 months. The net tax is 1.5percent.

i. Natural gas vented or flared or which isre-injected orconsumed for the production of crude oil or natural gas on thesame lease isnot taxed.

j. Natural gas that is produced under a certifiedgas researchproject is entitled to a 50 percent tax credit under (i), (ii)and (iii).Credit is limited to 50 percent of qualified expenditures withsuchexpenditures not exceeding $2MM per taxpayer. Credit would then be limited to $1MM.

Trona

(i) Ad valorem and severance taxes – no exemptions,incentives orrelief measures.

Bentonite

(i) Ad valorem and severance taxes – no exemptions,incentives orrelief measures.

Uranium

(i) Severance taxes

a. There is no severance tax on uranium productionbetweenJanuary 1, 1995 and March 31, 2003 if the price of uranium isbelow $14.00 perpound

1. If the price is between $14.00 and $15.00 perpound the tax is1 percent.

2. If the price is between $15.01 and $16.00 perpound the tax is2 percent.

3. If the price is between $16.01 and $17.99 perpound the tax is3 percent.

4. If the price is between over $18.00 per pound,the tax is 4percent.

Sand and Gravel

(i) Gravel owned and used by governmental entitiesforgovernmental purposes is exempt.

Other Valuable Deposits

(i) Advalorem andseverance taxes – no exemptions, incentives or reliefmeasures

Administration

Administrator, Reporting andPaymentRequirements

For Ad Valorem tax purposes, minerals are astate assessedproperty. The ad valoremtax relates tothe ownership interest in the mineral removed, extracted, severedor produced,and the incidence of the tax is on all the interest owners inproportion totheir ownership shares unless exempted by law. Annually, on or before February 25 of the year followingthe year ofproduction, a signed sworn statement in a format prescribed bythe departmentof revenue is submitted to the department. For solid mineral production the mine operator shallreport theproduction and pay the taxes.

Royalty interest owners and non-operatingworking interestowners who do not elect to take their working interest share ofproductionin-kind and market such production under a separate marketingarrangement arenot allowed to separately report severance and gross productstaxes. Suchreporting resides with the operator. This also applies to anyinterest ownerchoosing to take in kind interest.[1] If the option to separatelymarket is notexercised by the interest owner the operator shall report theinterest owner’sportion of the production and pay the taxes. The interest owner instead of reporting and paying thetaxes on theproduction he has taken in kind, himself, may request in writingto theoperator, that the operator report and remit the taxes forhim. Oil and gas operators canrequest in writinga sixty day reporting extension prior to the February 25statutory duedate. This usuallyoccurs. Either waythe operator is required to report to the department of revenueall reports andinformation required including the identity of interest ownerselecting to takeproduction in kind and the actual quantity or volume ofproduction taken inkind.

There is a special reporting provision thatrequires coalproducers to submit a copy of all sales agreements in excess of10,000 tons tothe department of revenue within 18 months of the date ofagreement, unless theagreement is not publicly available.

By June 1, or as soon thereafter as possible,(July 1 perDepartment Rules, Chapter 6, Section 7, H) the Department ofRevenue, MineralsDivision must certify to the each county assessor the assessedvalue ofminerals in each county. Annually, onor before October 10, the county treasurer must send a writtenstatement of thetotal tax due, itemized as to the property description, assessedvalue and milllevies to each taxpayer at their last known address. Ad valorem taxes are paid to the county treasurer’soffice inwhich the taxes were levied. The taxescan be paid in two installments, the first installment is due byNovember 10,and the second installment is due May 10, of the followingyear. If the taxpayer elects to payin oneinstallment, it is due by December 31 of the assessmentyear. The time span for thereporting, assessingand the paying of ad valorem taxes can create problems when itcomes to thecollection of the tax. The time line onpage 7 shows the time that lapses between the actual productionof the mineralsand the time when property taxes are paid.

The taxpayer both reports production and paysseverancetaxes to the Department of Revenue. Severance tax reports on the previous month’s productionare due by the25^thof each month along with payment for thetaxes. An extension can be given, ifthe departmentreceives a written request five days prior to the due date. If an extension is granted, 90percent ofthe estimated tax must still be paid by the statutory due date,with theremaining tax to be remitted with the extended return. Monthlyreporting is notrequired if the taxes are less the $30,000.00 in a calendaryear. Annual reporting can then beused with theannual report due by February 25 on the previous year’sproduction. Tax payment must be made whenthe report issubmitted.

For solid mineral production the mine operatorshall reportthe production and pay the taxes. For oil and gas, the grossproductattributable to an working or non-working interest owner shall beremitted bythe interest owner or may be remitted on behalf or the interestowner inproportion to his ownership interest by theoperator. This also applies to any interest owner choosing totake-in-kindinterest. If the optionto separatelymarket is not exercised by the interest owner, the operator shallreport theinterest owner’s portion of the production and pay thetaxes. The interest owner instead ofreporting andpaying the taxes on the production he has taken in kind, himself,may requestin writing to the operator, that the operator report and remitthe taxes forhim. Either way the operator is required to report to thedepartment of revenueall reports and information required including the identity ofinterest ownerselecting to take production in kind and the actual quantity orvolume ofproduction taken in kind.

For both ad valorem and severance taxreporting, in-kindproduction can create reconciliation problems. If the in-kind interest owner chooses to report his owngross value ofproduction and pay his own taxes, many times the volume orquantity reported bythe in-kind interest owners does not reconcile with the totalreported by theoperator. If thedepartment cannotsettle the difference, the matter will be heard by the Board ofEqualization.

The form used to report production for advalorem taxesis different from that used for severance taxes. The Mineral Tax Division staff reconcile volume andproductioninformation contained on the monthly severance returns with thesameinformation reported on the annual gross products (ad valorem)return. Thisreconciliation effort takes place at three levels: Severance toGross productsmatch; Wyoming Oil and Gas Conservation Commission Form 2 toAnnual GrossProducts; and Operator/Take In-Kind Reconciliation. The Department of Audit performs audits of taxpayerreturns. The scope of their auditincludes theexamination of return information in conjunction with productionpaymentrecords of the taxpayer.

Enforcement Provisions

If the necessary reports are not received foreither advalorem or severance taxes, the Department of Revenue can valuethe propertyfrom the best information available to determine the its fairmarket value.

Penalties are imposed for failure to filereports. For advalorem taxes the penalty is 1 percent of the taxable value ofthe productionnot to exceed $5,000.00 for each calendar month the report islate. The penalty for failure tofile a monthlyseverance tax report is a maximum of $1,000.00. The penalty for failure to file an annual severancetax report is5 percent of the taxes due for every thirty days the report islate. The penalty should not exceed25 percent ofthe tax due. There is also penalties for a tax deficiency due tonegligent orintentional disregard of rules and regulations. The departmentcan waiveseverance tax and ad valorem penalties for good cause.

If severance taxes are not paid, thedepartment can notifythe purchaser of the mineral product to withhold and remit to thedepartmentthe current taxes as they become due.

Liens can be filed for failure to remittaxes. For failure to remit paymentof ad valoremtaxes on minerals, a lien can be filed on the real and personalproperty ownedby the person against whom the tax was assessed subject to allprior existingliens.

A lien for severance taxes is a lien superiorto any otherliens except federal liens, on the gross product, or saleproceeds therefrom,of the mine or mining claim from and after the time the mineralsare extracteduntil the taxes are paid. There canalso be a severance tax lien on the interest of any personextracting anyvaluable deposit from and after the time they are extracted untilthe taxes arepaid. This tax lien shall have preference over all liens exceptany validmortgage or other liens of record filed or recorded.

The Department of Revenue can request auditsof companiesreporting mineral production values to establish if; taxablevolumes or valuesare accurately reported, clerical errors were made in determiningtaxablevolumes or values, taxable values or volumes were not calculatedfollowingWyoming statute or rules, and an additional payment forproduction was receivedand not reported. The Wyoming Department of Audit performs theauditsrequested. Any findings by the audit that results in a change invaluation mustbe certified to the county assessors.

The department must provide taxpayers with a14 day writtennotice before an audit commences. Unless otherwise agreed to, the audit must be completedand findingsreported to the taxpayer within two years after the auditbegins. Any additional assessment,includingpenalties and interest, shall be issued within one year followingthecompletion of the audit. The taxpayerafter receiving the audit findings has 60 days to submit aresponse.

Taxpayer Remedies

The taxpayer can request a value determinationfrom thedepartment and propose a value determination method. A taxpayer can also request and receive from thedepartmentinterpretations of statutes and rules.

Following determination of the assessedvalueof mineralsfor ad valorem purposes, the department shall notify the taxpayerof thevalue. The taxpayer hasthirty days tofile an objection with the Board of Equalization and must at thesame time fileobjections with the county treasurer where the property isassessed. The treasurer must notify thecountyassessor and the county commissioners of the appeal and providean estimate oftaxes under appeal based upon the previous year’s tax levy.

A taxpayer can also appeal to the Board ofEqualization thevaluation of minerals for severance taxes. The appeal does not relieve the taxpayer from paying thetaxes due nordoes payment invalidate an appeal.

The Board of Equalization can hear appealsfrom affectedtaxpayers, boards of county commissioners and the Department ofRevenue.Decision made by the Board of Equalization can be appealed to thedistrictcourt of the county in which the property or some part of it issituated.

If ad valorem taxes are paid under protestwith an appealpending, the county treasurer should deposit the appealed amountin an interestbearing account and shall not distribute it until a decision ismade. For appeals of severance taxesfor whichprotest payment have been made, the state treasurer shall depositthe appealedamount in an interest bearing account until a decision ismade.

The statutes provide for the distribution ofrefunds foroverpayment of both ad valorem and severance taxes. The over-payment can be the result of refiledreports, determinedby audit or be a result of the appeal process. Refunds can also be applied to future tax payments asprescribed bystatute.

Collection andDistribution

Collection

The past collection history and significanceof mineraltaxes for ad valorem purposes is discussed in the section onpropertytaxes. The taxes arecollected by thecounty treasurers and distributed by the county treasurers to thevarioustaxing jurisdictions within the county according to the millleviesallowed.

The production and value of minerals haveincreaseddramatically over the years. Table 4Bshows the growth of mineral production in Wyoming from 1974-1997.Just asimportant as the rise in mineral production, is the rise in thetax rates thathave been implemented by the legislature over the years. Table 4Cshows ahistory of the severance tax rates in Wyoming. During the late60’s and early70’s, severance taxation was the same for all minerals, 1 percentof the value.In 1969, minerals did receive a break when the state legislatureno longerlevied the statewide mill levies authorized by the stateconstitution. In 1973,the primary minerals, except oil, began to see an increase inproduction and inthe same year the legislature increased the severance taxrates. Refer to chart A, page 13.

TABLE4B

Oil Barrels

Gas MCF

Coal Tons

Trona Tons

Uranium Ore-Tons

Yellowcake-Pounds

1974

127,555,252

265,600,635

20,649,754

7,070,617

2,287,697

1975

120,629,951

248,528,881

23,784,128

7,379,792

2,736,663

1976

120,571,157

260,752,431

31,085,412

8,800,607

3,302,422

1977

124,328,857

272,300,637

44,046,842

10,215,602

3,986,025

1978

122,799,348

273,724,975

58,174,825

9,974,237

5,517,070

1979

115,678,022

333,322,180

71,445,178

11,771,985

5,512,345

1980

114,284,682

349,634,385

94,986,433

12,159,241

5,352,337

1981

111,912,600

353,076,052

102,695,563

11,787,731

4,560,683

1982

108,055,462

351,192,737

107,954,583

10,073,690

3,895,510

1983

110,420,981

395,656,547

112,187,874

10,542,417

3,022,650

1984

117,289,568

447,515,295

130,745,779

10,971,209

1,634,262

1985

123,172,530

412,026,614

140,424,446

10,776,304

619,967

1986

111,148,577

352,799,892

128,145,751

11,919,530

226,821

1987

105,200,000

357,000,000

133,000,000

13,402,500

184,999

1988

111,207,959

471,363,924

163,801,374

15,114,169

280,749

1989

107,742,581

665,698,542

171,038,569

16,212,715

1,540,412

1990

86,388,844

690,356,068

183,908,400

16,231,527

1,331,935

1991

94,926,995

755,538,523

194,037,766

16,175,601

2,036,068

1992

84,640,058

765,253,721

190,025,252

16,407,911

1,606,438

1993

86,399,855

808,157,126

210,062,286

16,031,147

1,107,083

1994

75,963,900

884,365,795

236,948,922

16,128,501

1,207,421

1995

71,594,921

899,139,137

263,505,214

18,449,366

1,381,503

1996

68,905,892

907,954,365

278,272,409

18,550,633

1,911,514

1997

68,057,025

997,424,673

281,729,283

19,428,196

2,325,458

Most of the tax increases were put in placeduring theseventies. The year 1981 was the last year in which a mineral taxincreaseswere enacted. Overall taxrates between1981 and 1984 remained stable. In 1984 and 1985, rates werereduced forunderground coal, oil collection wells, and tertiary oilproduction. In 1988,the coal severance rates for both strip mines and underground,and uranium weredecreased. Several special exemptions, classifications anddeductions were alsoenacted between 1985-1988, which have effectively reduced the taxburden to themineral industry. Additional ratedecreases and incentives were granted to the coal industry, tronaindustry andthe petroleum industry in 1993. Thoughcrude oil and uranium production continued to decrease,production of naturalgas, coal and trona did steadily increase. The legislature wasnot respondingto a decrease in mineral production when they decreased severancetax rates butto the market price of the mineral product. In 1999, thelegislature gaveadditional rate decreases to the oil industry by allowingseverance tax ratereductions for oil produced at $20.00 or less a barrel.

Chart 4B, page 13 shows the average price usedto determinethe assessed value of oil, gas, coal, trona and uranium between1974 to 1997.The general trend of the market value of these minerals has beendownward. Theproduction of gas, coal, and trona, however, has continued toshow annualincreases. The actualseverance taxcollections since 1985 have decreased. This is portrayed in chart 4C, page 14. The primary reasons for this decrease are the decline inproduction andmarket price of crude oil and uranium and a reduction in themarket price ofgas, coal, and trona. The decline in the valuation of production,is due tofactors which are for the most part, outside of the control ofeither the stateof Wyoming or the producers inside the state’s boundaries.

CHART 4C

CHART 4C

Distribution

The two traditional justifications for thelevying ofseverance taxes relate to resource depletion and energydevelopmentimpact. In Wyoming thetax has beenused more for impact mitigation, with the majority of the taxesearmarked forlocal governments, water development, highways and capitalimprovements. Resource depletion though hasnot beenignored. In 1974, Article15, Section19 of the Wyoming Constitution, was adopted by the legislatureand approved bya vote of the people. This sectionprovided for a severance tax of 1.5 percent on the value of thegross productof minerals extracted. The tax is inaddition to any other excise tax on minerals and is to bedeposited into thePermanent Mineral Trust Fund (PWMTF). The principle in this fund can never be spent. The monies are invested as prescribed by the statelegislature. If allowedby theLegislature, the funds can be loaned to politicalsubdivisions. The fund’s earnings aredeposited into thegeneral fund by the state treasurer on an annual basis. The history of deposits anddisbursements ofthis fund is shown in table 4H, page 17.

Each article in Chapter 14, Statute 39specifically stateshow severance tax funds earned by a specific mineral are to bedistributed. The formulasfor trona,bentonite, uranium, sand and gravel and all other valuabledeposits arestraight forward and easily understood. The distribution formulas for coal and petroleum productsarecomplicated.

Table 4D shows how the severance taxes earnedon Trona,Bentonite, Uranium, Sand and Gravel and all other valuabledeposits aredistributed.

TABLE 4D

Trona

Bentonite

Uranium

(varieswith collections)

Sand&Gravel

AllOther

Deposits

Rate(i)

Rate(ii)

Rate(a)

Rate(i)

Rate(ii)

Rate(a)

Prior to6/30/2000

BudgetReserve Accountafter which the PWMTF

StateGeneral Fund

State GeneralFund

Prior to6/30/2000

BudgetReserve Accountafter which the PWMTF

State GeneralFund

Severance taxes earned from coal productionare distributedaccording to Table 4E-4F.

TABLE 4E

Coal Severance Taxes- AboveGround

Total Tax 7%

Rate(i)

Rate(ii)

Rate(iii)

Rate(iv)

Rate(v)

Rate(vi)

1.5%

.5%

1.5%

.5%

PWMTF

Prior to 6/30/2004

BudgetReserve Accountafter which the PWMTF

State GeneralFund

WaterDevelopment Fund orState General Fund

(i)1.25% toCapital Const.Account

(ii)2.25% totheState-County Road Fund

(iii).625% toCounties

(iv)Balanceto the highwayfund

Prior to6/30/2004

BudgetReserve Accountafter which the PWMTF

TABLE 4F

Coal Severance Taxes- BelowGround

Total Tax 3.75%

Rate(i)

Rate(ii)

Rate(iii)

1.5%

1.25%

PWMTF

State GeneralFund

(i)1.25% toCapital Const.Account

(ii)2.25% totheState-County Road Fund

(iii).625% toCounties

(iv)Balanceto the highwayfund

Severance taxes earned from Oil and Gas aredistributedaccording to Table 4G.

TABLE 4G

Oil and Gas Severance Taxes

Total Tax 6%

Rate(i)

Rate(ii)

Rate(iii)

Rate(iv)

1.5%

.5%

PWMTF

Prior to6/30/2000

BudgetReserve Accountafter which the PWMTF

State GeneralFund

(i)3/8 toCities&Towns

(ii)1/8 toCounties

(iii)1/3Distributed asfollows:

(a)An amountequal to thatcollected in LUST fuel taxes to LUSTaccounts.

(b)An amountto bring theState Park Road account fund to $500,000.

(c)Balance tothe StateHighway Fund

(iv)1/12Prior to 6/30/2000to the

BudgetReserve Accountafter which the PWMTF

(v)1/12 tothe WaterDevelopment Fund

It is interesting to note that the amountsdistributed tocities, towns and counties are generated strictly from coal andoil and gasseverance taxes. It mustbe understoodthat not all distributions are made at the full 6 percent for oiland gas orthe 4 percent for uranium because of the exceptions that areallowed for theseminerals.

Amounts distributed to the designated accountsfrom 1988 to1997 are shown in table 4I, page 18. The instability shown in these distributions reflects theuncertainty ofseverance tax generation. This doesviolate one of the criteria of a preferred tax system, that ofstability.

TABLE 4H

Year

Severance Tax

Fines&

Interest

Interest to

Balance

Deposits

Forfeitures

Earnings

General Fund

1974

0.00

1975

9,070,534.

361,804.

9,432,338.

1976

19,790,756.

342,153.

703,957.

28,861,290.

1977

22,845,050.

2,629,994.

2,629,995.

51,706,339.

1978

26,806,289.

3,483,189.

78,512,628.

1979

36,537,587.

6,716,382.

115,050,215.

1980

40,680,788.

11,992,118.

155,731,003.

1981

52,597,909.

24,707,475.

18,408,875.

214,627,512.

1982

128,542,677.

14,426.

26,894,428.

26,121,955.

343,957,088.

1983

127,056,703.

-14,426.

48,723,474.

47,535,826.

472,187,013.

1984

126,052,631.

45,367.

56,170,521.

54,973,937.

599,481,595.

1985

131,436,950.

64,292,994.

67,815,059.

727,396,480.

1986

124,573,235.

70,985,945.

72,356,166.

850,599,494.

1987

62,469,489.

76,365,747.

74,925,726.

914,509,004.

1988

58,617,466.

78,424,035.

72,274,883.

979,275,622.

1989

50,788,173.

84,595.

81,694,739.

72,518,001.

1,039,325,128.

1990

56,348,413.

196,560.

86,123,351.

83,560,274.

1,098,433,178.

1991

59,529,207.

162,091.

93,849,608.

95,106,407.

1,156,867,677.

1992

53,234,067.

86,780,396.

92,724,655.

1,204,157,485.

1993

53,381,267.

94,230,245.

88,342,155.

1,263,426,842.

1994

76,163,898.

86,042,101.

109,095,543.

1,316,537,298.

1995

46,543,901.

85,608,439.

1,363,081,199.

1996

44,144,890.

86,526,783.

1,407,226,089.

1997

50,645,427.

92,221,049.

1,457,871,516.

1998

64,055,864.

101,271,457.

1,521,927,387.

TABLE 4I

Severance Tax Distributions

Year

General

PWMTF

Cities,Towns

Budget

Education

Com-pensation

Water

LUST[1]

Wyoming

Capital

Fund

ies

Reserve

Development

way

Facilities

unds

Fund

Account

1988

66,442,529

58,617,466

23,710,370

2,718,107

18,881,341

25,742,258

16,645,564

1989

65,879,852

50,788,173

23,038,087

28,355,081

19,366,643

23,219,712

17,723,584

1990

75,481,855

56,348,413

26,196,005

31,525,285

19,838,961

21,800,544

18,494,945

1991

81,448,019

59,532,144

28,067,682

33,252,405

20,904,215

23,223,371

19,045,328

1992

70,716,330

53,234,067

22,640,452

31,428,737

24,322,222

2,904,536

21,448,514

21,606,142

1993

67,762,034

53,381,267

23,312,006

44,976,123

10,175,147

1,399,322

20,042,968

6,768,414

9,801,190

19,693,024

1994

66,975,733

51,963,898

22,787,185

39,069,045

19,670,194

6,503,039

18,230,924

1995

57,892,926

43,400,425

16,966,251

29,233,577

18,502,473

7,330,216

14,739,195

323,879

1996

64,234,238

48,754,014

18,715,495

29,841,991

20,235,137

5,343,586

17,576,837

121,461

1997

72,707,640

56,747,014

23,450,208

33,499,478

20,810,450

8,584,975

17,382,751

41,474

1998

75,171,024

56,707,432

21,542,519

34,116,785

23,337,660

7,660,595

19,194,741

188,523

Total

764,712,180

613,452,573

250,426,260

338,016,614

10,175,147

1,399,322

225,912,264

45,095,361

212,360,037

113,883,924

fProperty Valuation

Wyoming is one of few states that levies botha property taxand as a privilege to extract or severance tax on minerals. The property tax on mineralswas consideredgenerally in the previous section. The discussion that follows considers theseverance tax on minerals and relates the similarities andnon-similarities ofthe two mineral taxes.

For coal sold away from the mouth of the minein a bona-fidearms length sale, ad valorem, all royalties, production taxes,severance taxes,black long excise taxes, and abandoned mine land fees arededucted from the F.O.B.mine sales price. The resulting price is then multiplied by theratio of directmining costs to the total direct costs. To the resulting amount non-exempt royalties, ad valorem,productiontaxes, severance taxes, black lung excise taxes, and abandonedmine land feesare added back to determine the fair market value of coal.

The determination of the 100 percent fair cashmarket valueof the gross product of other minerals is determined at the pointat which themining or production of the mineral is completed, usually themouth of themine. When a solidmineral is sold atthe point of valuation pursuant to a bona-fide arms length sale,the salesprice shall be the fair cash market value. When a solid mineral is sold at a point other than thepoint ofvaluation, the fair cash market value shall be determined inaccordance withrecognized appraisal techniques. These techniquesinclude the cost approach and the comparison approach and aredescribed inSection 10, Chapter 6 of the Department of Revenues Rules andRegulations.Specific rules for valuation are provided for trona, uranium andbentonite.

Rates

TABLE 4A

Coal

Surface coal– (i) 1.5%

(ii) .5%

(iii) 2.0%

(iv) 1.5%

(v) 1.0%

(vi) .5% - Total7%

Undergroundcoal- (i) 1.5%

(ii) 1.25%

(iii) 1.0% -Total 3.75%

Oil andGas

(i) 1.5%

(ii) .5 %

(iii) 2.0%(1.0% if oil is $20.00 or less perbarrelbetween 1/1/99-12/31/00)

(iv) 2.0%(1.0% if oil is$20.00or less per barrel between1/1/99-12/31/00)

Total 6% (4%if oil is$20.00 or less per barrel between1/1/99-12/31/00)

Trona

(i) 2.0%

(ii) 2.0% -Total 4%

Bentonite

(a) 2.0%

Uranium

(i) 2.0%

(ii) 2.0%-Total 4%

Sand andGravel

(a) 2.0%

OtherValuable Deposits

(a) 2.0%

Incentives and ReliefMeasures

Coal

(i) Ad valorem and severance taxes

a. Coal has no value if it is consumed prior tosale for thepurpose of treating or processing coal produced from the samemine.

(ii) Severance taxes

a. If the severance tax on a ton of coal exceeds.60 per ton forsurface-mined coal and .30 per ton for underground coal, the coalis exemptfrom the tax which exceeds the maximum amount per ton.

1. New contracts or modification of an existingcontract ifentered into between March 31, 1987 and December 31, 2003.

2. This exception is subject to meeting certainconditions.

a.) The coal is consumed outside of the state, ormeets certainproduction requirements if consumed within the state, or ifconsumed within thestate replaces a coal source from outside the state.

b.) The new contract is not the result of replacingthe contractof another Wyoming producer.

Oil and Gas

(i) Severance Taxes

a. Stripper 15 production is exempt from (iii)providing for a 4percent tax rate on production less than 15 barrels per day whenthe averageprices is less than $20 per barrel.

b. Crude oil extracted from collection wells priorto January 1,1999 is exempt from (ii),(iii)&(iv) for a net tax of 1.5percent.

c. Tertiary production after July 1, 1985 andbefore March 31,2003 is exempt for (iii) for the first five years of productionfor a net taxof 4 percent.

d. If carbon dioxide gas is used in the productionof crude oilby tertiary techniques, the severance tax paid on the carbondioxide gas isdeducted from the tax due on the crude oil production.

e. Crude oil or gas produced by a wildcat wellbetween January 1,1991 and December 31, 1994 is exempt from (iii) and (iv) for fouryears fromthe first date of production for a net tax of 2 percent.

i. Natural gas vented or flared or which isre-injected orconsumed for the production of crude oil or natural gas on thesame lease isnot taxed.

Trona

(i) Ad valorem and severance taxes – no exemptions,incentives orrelief measures.

Bentonite

(i) Ad valorem and severance taxes – no exemptions,incentives orrelief measures.

Uranium

(i) Severance taxes

a. There is no severance tax on uranium productionbetweenJanuary 1, 1995 and March 31, 2003 if the price of uranium isbelow $14.00 perpound

1. If the price is between $14.00 and $15.00 perpound the tax is1 percent.

2. If the price is between $15.01 and $16.00 perpound the tax is2 percent.

3. If the price is between $16.01 and $17.99 perpound the tax is3 percent.

4. If the price is between over $18.00 per pound,the tax is 4percent.

Sand and Gravel

(i) Gravel owned and used by governmental entitiesforgovernmental purposes is exempt.

Other Valuable Deposits

(i) Advalorem andseverance taxes – no exemptions, incentives or reliefmeasures

Administration

Administrator, Reporting andPaymentRequirements

For solid mineral production the mine operatorshall reportthe production and pay the taxes. For oil and gas, the grossproductattributable to an working or non-working interest owner shall beremitted bythe interest owner or may be remitted on behalf or the interestowner inproportion to his ownership interest by the operator. This also applies to any interest owner choosing totake-in-kindinterest. If the optionto separately marketis not exercised by the interest owner, the operator shall reportthe interestowner’s portion of the production and pay the taxes. The interest owner instead of reporting and payingthe taxes onthe production he has taken in kind, himself, may request inwriting to theoperator, that the operator report and remit the taxes for him.Either way theoperator is required to report to the department of revenue allreports andinformation required including the identity of interest ownerselecting to takeproduction in kind and the actual quantity or volume ofproduction taken inkind.

Enforcement Provisions

If severance taxes are not paid, thedepartment can notifythe purchaser of the mineral product to withhold and remit to thedepartmentthe current taxes as they become due.

Ad valorem taxes become delinquent after theday on whichthey are due. Countycommissioners cancalculate an interest rate of 18 percent on the net amount ofdeficient taxesdue. The interest thataccrues on delinquentseverance taxes is the average prime interest rate as determinedby the StateTreasurer plus 4 percent. The interestrate will not be less than 12 percent or greater than 18percent.Liens can be filed for failure to remittaxes. For failure to remit paymentof ad vaxes on minerals, a lien can be filed on the real and personalproperty ownedby the person against whom the tax was assessed subject to allprior existingiens. lien for severance taxes is a lien superiorto any other liensexcept federal liens, on the gross product, or sale proceedstherefrom, of themine or mining claim from and after the time the minerals areextracted untilthe taxes are paid. Therecan also be aseverance tax lien on the interest of any person extracting anyvaluabledeposit from and after the time they are extracted until thetaxes are paid.This tax lien shall have preference over all liens except anyvalid mortgage orother liens of record filed or recorded.The Department of Revenue can request auditsof companiesreporting mineral production values to establish if; taxablevolumes or valuesare accurately reported, clerical errors were made in determiningtaxablevolumes or values, taxable values or volumes were not calculatedfollowingWyoming statute or rules, and an additional payment forproduction was receivedand not reported. The Wyoming Department of Audit performs theauditsrequested. Any findings by the audit that results in a change invaluation mustbe certified to the county assessors. The department must provide taxpayers with a14 day writtennotice before an audit commences. Unless otherwise agreed to, the audit must be completedand findingsreported to the taxpayer within two years after the auditbegins. Any additional assessment,includingpenalties and interest, shall be issued within one year followingthecompletion of the audit. The taxpayerafter receiving the audit findings has 60 days to submit aresponse.ayer RemediesThe taxpayer can request a value determinationfrom thedepartment and propose a value determination method. A taxpayer can also request and receive from thedepartmentinterpretations of statutes and rules.Following determination of the assessed valueof mineralsfor ad valorem purposes, the department shall notify the taxpayerof thevalue. The taxpayer hasthirty days tofile an objection with the Board of Equalization and must at thesame time fileobjections with the county treasurer where the property isassessed. The treasurer must notify thecountyassessor and the county commissioners of the appeal and providean estimate oftaxes under appeal based upon the previous year’s tax levy. A taxpayer can also appeal to the Board ofEqualization thevaluation of minerals for severance taxes. The appeal does not relieve the taxpayer from paying thetaxes due nordoes payment invalidate an appeal.The Board of Equalization can hear appealsfrom affectedtaxpayers, boards of county commissioners and the Department ofRevenue.Decision made by the Board of Equalization can be appealed to thedistrictcourt of the county in which the property or some part of it issituated.If ad valorem taxes are paid under protestwith an appealpending, the county treasurer should deposit the appealed amountin an interestbearing account and shall not distribute it until a decision ismade. For appeals of severance taxesfor whichprotest payment have been made, the state treasurer shall depositthe appealedamount in an interest bearing account until a decision is made. The statutes provide for the distribution ofrefunds foroverpayment of both ad valorem and severance taxes. The over-payment can be the result of refiledreports, determinedby audit or be a result of the appeal process. Refunds can also be applied to future tax payments asprescribed bystatute.ollection andDistributionectionThe past collection history and significanceof mineraltaxes for ad valorem purposes is discussed in the section onpropertytaxes. The taxes arecollected by thecounty treasurers and distributed by the county treasurers to thevarioustaxing jurisdictions within the county according to the millleviesallowed. The production and value of minerals haveincreaseddramatically over the years. Table 4Bshows the growth of mineral production in Wyoming from 1974-1997.Just asimportant as the rise in mineral production, is the rise in thetax rates thathave been implemented by the legislature over the years. Table 4Cshows ahistory of the severance tax rates in Wyoming. During the late60’s and early70’s, severance taxation was the same for all minerals, 1 percentof the value.In 1969, minerals did receive a break when the state legislatureno longerlevied the statewide mill levies authorized by the stateconstitution. In 1973,the primary minerals, except oil, began to see an increase inproduction and inthe same year the legislature increased the severance taxrates. Refer to chart A, page 13.

TABLE4B

Oil Barrels

Gas MCF

Coal Tons

Trona Tons

Uranium Ore-Tons

Yellowcake-Pounds

1974

127,555,252

265,600,635

20,649,754

7,070,617

2,287,697

1975

120,629,951

248,528,881

23,784,128

7,379,792

2,736,663

1976

120,571,157

260,752,431

31,085,412

8,800,607

3,302,422

1977

124,328,857

272,300,637

44,046,842

10,215,602

3,986,025

1978

122,799,348

273,724,975

58,174,825

9,974,237

5,517,070

1979

115,678,022

333,322,180

71,445,178

11,771,985

5,512,345

1980

114,284,682

349,634,385

94,986,433

12,159,241

5,352,337

1981

111,912,600

353,076,052

102,695,563

11,787,731

4,560,683

1982

108,055,462

351,192,737

107,954,583

10,073,690

3,895,510

1983

110,420,981

395,656,547

112,187,874

10,542,417

3,022,650

1984

117,289,568

447,515,295

130,745,779

10,971,209

1,634,262

1985

123,172,530

412,026,614

140,424,446

10,776,304

619,967

1986

111,148,577

352,799,892

128,145,751

11,919,530

226,821

1987

105,200,000

357,000,000

133,000,000

13,402,500

184,999

1988

111,207,959

471,363,924

163,801,374

15,114,169

280,749

1989

107,742,581

665,698,542

171,038,569

16,212,715

1,540,412

1990

86,388,844

690,356,068

183,908,400

16,231,527

1,331,935

1991

94,926,995

755,538,523

194,037,766

16,175,601

2,036,068

1992

84,640,058

765,253,721

190,025,252

16,407,911

1,606,438

1993

86,399,855

808,157,126

210,062,286

16,031,147

1,107,083

1994

75,963,900

884,365,795

236,948,922

16,128,501

1,207,421

1995

71,594,921

899,139,137

263,505,214

18,449,366

1,381,503

1996

68,905,892

907,954,365

278,272,409

18,550,633

1,911,514

1997

68,057,025

997,424,673

281,729,283

19,428,196

2,325,458

Most of the tax increases were put in placeduring the seventies.The year 1981 was the last year in which a mineral tax increaseswereenacted. Overall taxrates between 1981and 1984 remained stable. In 1984 and 1985, rates were reducedfor undergroundcoal, oil collection wells, and tertiary oil production. In 1988,the coalseverance rates for both strip mines and underground, and uraniumweredecreased. Several special exemptions, classifications anddeductions were alsoenacted between 1985-1988, which have effectively reduced the taxburden to themineral industry. Additional ratedecreases and incentives were granted to the coal industry, tronaindustry andthe petroleum industry in 1993. Thoughcrude oil and uranium production continued to decrease,production of naturalgas, coal and trona did steadily increase. The legislature wasnot respondingto a decrease in mineral production when they decreased severancetax rates butto the market price of the mineral product. In 1999, thelegislature gaveadditional rate decreases to the oil industry by allowingseverance tax ratereductions for oil produced at $20.00 or less a barrel.

TABLE 4Craniumls

1968

1.0%

1970

1.0

1972

1.0

1973

1.0

3.0

1.0

1974

2.0

4.0

4.4

4.0

2.0

1976

2.0

4.0

9.7

5.5

2.0

1978

2.0

4.0

10.5[1]

10.5

5.5

2.0

1981

4.0

6.0

10.5

5.5

2.0

1983

4.0

6.0

10.5

5.5

2.0

1984

4.0

6.0

10.5

7.25

5.5

2.0

1986

4.0

1.5

4.0

6.0

4.0

6.0

10.5

7.25

5.5

2.0

1989

4.0

1.5

4.0

6.0

4.0

6.0

8.5

5.25

5.5

2-4%

2.0

1992

4.0

1.5

4.0

6.0

4.0

6.0

8.5

5.25

5.5

2.0

1993

4.0

1.5

4.0

6.0

4.0

6.0

7.0

3.75

4.0

0.0

CHART 4C

Distribution

The two traditional justifications for thelevying ofseverance taxes relate to resource depletion and energydevelopmentimpact. In Wyoming thetax has beenused more for impact mitigation, with the majority of the taxesearmarked forlocal governments, water development, highways and capitalimprovements. Resource depletion though hasnot beenignored. In 1974, Article15, Section19 of the Wyoming Constitution, was adopted by the legislatureand approved bya vote of the people. This sectionprovided for a severance tax of 1.5 percent on the value of thegross productof minerals extracted. The tax is inaddition to any other excise tax on minerals and is to bedeposited into thePermanent Mineral Trust Fund (PWMTF). The principle in this fund can never be spent. The monies are invested as prescribed by the statelegislature. If allowed by the Legislature,the funds canbe loaned to political subdivisions. The fund’s earnings are deposited into the general fund bythe statetreasurer on an annual basis. Thehistory of deposits and disbursements of this fund is shown intable 4H, page17.

Table 4D shows how the severance taxes earnedon Trona,Bentonite, Uranium, Sand and Gravel and all other valuabledeposits aredistributed.

TABLE 4D

Trona

Bentonite

Uranium

(varieswith collections)

Sand&Gravel

AllOther

Deposits

Rate(i)

Rate(ii)

Rate(a)

Rate(i)

Rate(ii)

Rate(a)

Prior to6/30/2000

BudgetReserve Accountafter which the PWMTF

StateGeneral Fund

State GeneralFund

Prior to6/30/2000

BudgetReserve Accountafter which the PWMTF

State GeneralFund

Severance taxes earned from coal productionare distributedaccording to Table 4E-4F.

TABLE 4E

Coal Severance Taxes- AboveGround

Total Tax 7%

Rate(i)

Rate(ii)

Rate(iii)

Rate(iv)

Rate(v)

Rate(vi)

1.5%

.5%

1.5%

.5%

PWMTF

Prior to 6/30/2004

BudgetReserve Accountafter which the PWMTF

State GeneralFund

WaterDevelopment Fund orState General Fund

(i)1.25% toCapital Const.Account

(ii)2.25% totheState-County Road Fund

(iii).625% toCounties

(iv)Balanceto the highwayfund

Prior to6/30/2004

BudgetReserve Accountafter which the PWMTF

TABLE 4F

Coal Severance Taxes- BelowGround

Total Tax 3.75%

Rate(i)

Rate(ii)

Rate(iii)

1.5%

1.25%

PWMTF

State GeneralFund

(i)1.25% toCapital Const.Account

(ii)2.25% totheState-County Road Fund

(iii).625% toCounties

(iv)Balanceto thehighwayfund

Severance taxes earned from Oil and Gas aredistributedaccording to Table 4G.

TABLE 4G

Oil and Gas Severance Taxes

Total Tax 6%

Rate(i)

Rate(ii)

Rate(iii)

Rate(iv)

1.5%

.5%

PWMTF

Prior to6/30/2000

BudgetReserve Accountafter which the PWMTF

State GeneralFund

(i)3/8 toCities&Towns

(ii)1/8 toCounties

(iii)1/3Distributed asfollows:

(a)An amountequal to thatcollected in LUST fuel taxes to LUSTaccounts.

(b)An amountto bring theState Park Road account fund to $500,000.

(c)Balance tothe StateHighway Fund

(iv)1/12Prior to 6/30/2000to the

BudgetReserve Accountafter which the PWMTF

(v)1/12 tothe WaterDevelopment Fund

It is interesting to note that the amountsdistributed tocities, towns and counties are generated strictly from coal andoil and gasseverance taxes. It mustbe understoodthat not all distributions are made at the full 6 percent for oiland gas or the4 percent for uranium because of the exceptions that are allowedfor theseminerals.

TABLE 4H

Year

Severance Tax

Fines&

Interest

Interest to

Balance

Deposits

Forfeitures

Earnings

General Fund

1974

0.00

1975

9,070,534.

361,804.

9,432,338.

1976

19,790,756.

342,153.

703,957.

28,861,290.

1977

22,845,050.

2,629,994.

2,629,995.

51,706,339.

1978

26,806,289.

3,483,189.

78,512,628.

1979

36,537,587.

6,716,382.

115,050,215.

1980

40,680,788.

11,992,118.

155,731,003.

1981

52,597,909.

24,707,475.

18,408,875.

214,627,512.

1982

128,542,677.

14,426.

26,894,428.

26,121,955.

343,957,088.

1983

127,056,703.

-14,426.

48,723,474.

47,535,826.

472,187,013.

1984

126,052,631.

45,367.

56,170,521.

54,973,937.

599,481,595.

1985

131,436,950.

64,292,994.

67,815,059.

727,396,480.

1986

124,573,235.

70,985,945.

72,356,166.

850,599,494.

1987

62,469,489.

76,365,747.

74,925,726.

914,509,004.

1988

58,617,466.

78,424,035.

72,274,883.

979,275,622.

1989

50,788,173.

84,595.

81,694,739.

72,518,001.

1,039,325,128.

1990

56,348,413.

196,560.

86,123,351.

83,560,274.

1,098,433,178.

1991

59,529,207.

162,091.

93,849,608.

95,106,407.

1,156,867,677.

1992

53,234,067.

86,780,396.

92,724,655.

1,204,157,485.

1993

53,381,267.

94,230,245.

88,342,155.

1,263,426,842.

1994

76,163,898.

86,042,101.

109,095,543.

1,316,537,298.

1995

46,543,901.

85,608,439.

1,363,081,199.

1996

44,144,890.

86,526,783.

1,407,226,089.

1997

50,645,427.

92,221,049.

1,457,871,516.

1998

64,055,864.

101,271,457.

1,521,927,387.

TABLE 5B

The actual taxpayer is the purchaser of thegood orservice. The remitter ofthe tax inmost instances is the vendor who sells the taxable good orprovides theservice. The vendor collects the tax on the sales price[1]from the purchaser at the time the good is sold or the service isrendered. ByWyoming § 39-15/16-107(b)(i), the sales or use tax is not to becollected bythe vendor of a motor vehicle, house trailer, trailer coaches,trailers andsemi-trailers. Thepurchaser must paythe tax directly to the county treasurer. Vendors who sellmotorcycles, mopeds,boats, three and four-wheelers, and other off-road recreationalvehicles arerequired to collect the sales tax at the time of sale.

In 1998, the legislature ratified by statute apractice ofthe Wyoming Department of Revenue of permitting certain largetaxpayers to paysales taxes directly to the Department of Revenue rather thanremitting themfirst to a vendor for payment.

The purchaser is required to pay the use taxwhen theout-of-state vendor does not collect Wyoming sales tax. The purchaser does not have topay a use taxif he pays the sales tax of the state of purchase. If the tax is less than Wyoming’s sales tax, thepurchaser mustpay the difference between the two taxes to the State of Wyomingas a use tax.

There are special requirements for contractorsunder Wyoming§ 39-15/16-301/311. Anycontractor,prime or sub, who furnishes tangible personal property undercontract or in thedevelopment of real property, is the consumer or user of thetangible personalproperty within the sales tax laws of Wyoming. In other words,the contractormust pay sales tax on the materials, fixtures and supplies usedin his work.Contractors do not pay sales tax on labor performed on realproperty but theydo on labor performed on tangible personal property. The contractor can pay the sales tax to the vendor,or he can payit directly to the Department of Revenue. Prime contractors areresponsible forassuring that sub-contractors pay the taxes due.

TaxExemptions

The State of Wyoming assesses sales and usetaxes on thesale of tangible personal property and specified services. Specified services areprimarily related toa service that is performed on tangible personal property. Forexample, thestate taxes the labor a mechanic performs on the repair of anautomobile. Thelaw also states we must tax certain services even though they arenot a serviceon tangible personal property. Theseservices include taxation of telephone, telegraph, utility andtransportationservices, oilfield services and admissions and amusements.

With regards to sales and use tax exemptions,the differencemust be explained between what is a specific written exemptionand an exemptionthat is not written into the law, but because the law does notstate it is tobe taxed, receives exemption status. An example of a writtenexemption would bethe wholesale sales and tangible personal property consumed inproduction.

Many services are not taxed because they donot fall in thecategory of those services “performed for the repair, alterationof improvementof tangible personal property” (Wyoming § 39-15-103(a)(i)(J)).They areconsidered exempt even though there is no written exemption. Examples of these services areprofessionalservices such as those performed by CPA’s and attorneys.

The written exemptions in the Wyoming’s Salestax law arestated in Wyoming § 39-15-105 and 39-16-105. The Wyoming State Legislature classified these exemptionsin 1994.

1) Sales of services and tangible personal propertywhich areprotected by the Constitutions of the United States or Wyoming.

2) Sales of services and tangible personal propertyprotected byfederal law:

a) Interstatetransportation of freight or transportation.

b) Sales of transportation equipment(i.e.railroad rolling stock, aircraft, trucks, and tractor-trailerunits) thatoperates in interstate commerce.

c) Leases of motor vehicles andtrailers forwhich the rental is paid from the gross receipts of the operationand theoperator holds an interstate authority or permit.

d) Sales to the Wyoming jointapprenticeshipand training programs approved by the United States Department ofLabor.

e) Sales of food purchased with food stamps.

3) Sales of services and tangible personal property consumedin production:

a) Sale of tangible personal property when it is tobecome aningredient or component of tangible personal property that isgoing to be heldfor sale. The purchase ofcontainers,labels or shipping cases for tangible personal property are notsubject tosales taxation.

b) Sale of livestock is not taxed. Sales of feeds for use in the feeding of livestockor poultry formarketing purposes is exempt. The Stateexempts the sales of seeds, roots, bulbs, small plants andfertilizer plantedor applied to land if the end products are to be sold or usedsubject to astate or federal crop set aside program.

c) Intrastate transportation of raw farm productsto processingor manufacturing plants.

d) Sales of power or fuel to a person engaged inthemanufacturing, processing, agriculture and oil field productionwhen the poweris consumed directly in manufacturing, processing, agriculture oroilproduction.

e) Sales of power or fuel to a person engaged inthetransportation business when the same is consumed directly foractualtransportation purposes. This exemption does not apply if thepower or fuel isnot taxed as gasoline, gasohol or special fuels and is used topropel a motorvehicle on the highway.

f) Wholesale sales.

4) Salesof servicesand tangible personal property sold to a government, nonprofitorganization,irrigation districts and weed and pest control districts.

a) Sales to the State of Wyoming and its politicalsubdivisions.

b) Sales made to religious or charitableorganizations includingnon-profit senior citizen meal providers. The organization must be conducting religious, charitableor seniorcitizen functions. Sales of meals to senior citizens by seniorcitizen centersare not taxed.

c) Occasional sales made by religious or charitableorganizationsfor fund raising purposes to conduct religious or charitablefunctions oractivities.

d) Sales to joint powers board organized under theWyoming JointPowers Act.

e) Sales price of admission or user fees for countyor municipalowned recreation facilities.

f) Labor or service charges, includingtransportation and travel,for the repair, alteration or improvement of real property ortangible personalproperty owned by, or incorporated in projects under contract tothe State ofWyoming or any of its political subdivisions.

g) Sales to irrigation districts organized understate law.

h) Sales to weed and pest district organized understate law.

5) Sales of services and tangiblepersonalproperty which are alternatively taxed:

a) Transportable mobile homes permanently attachedto realtyafter the tax has once been paid.

b) Sales of gasoline, gasohol or specialfuels. Sales tax is paid on the salesprice ofoff-road diesel.

6) Sales of services and tangible personal propertywhich areessential human goods and services:

a) Intrastate transportation ofsick ordeceased persons in a hearse or ambulance.

b) Sales of prescription drugs and other devicesused for humanrelief, i.e. hearing aids, prosthetic devices, wheel chairs,crutches andeyeglasses.

c) Sales of all non-capitalized equipment anddisposable supplieswhich are used in the direct medical or dental care of apatient.

7) Sales ofservicesprovided primarily tothe followingbusinesses:

a) Services provided for interstate or intrastatetransportationof drilling rigs and for the loading, unloading and assembly ofdrilling rigs.

b) Persons engaged in the business of making loansor supervisedfinancial institutions do not have to pay sales tax on vehiclesthey repossessfor non-payment of a loan.

8) Exceptions of sales of tangible personalproperty or servicesfor economic incentives:

a) Intrastate transportation by a public utility orothers:

1. Employees to or from work when paid orcontracted by theemployee or employer.

2. Freight and property including oil and gas bypipeline.

b) Sales of the services of professional engineers,geologists orsimilar professions and charges made by contractors for oil orgas drillingactivities for new exploration, or to deepen existing wells belowthe depthpreviously drilled or for drilling stratigraphic test or coreholes to obtaingeologic information.

c) Sales of newspapers and school annuals.

d) Sales of tangible personal property or sales forthe repair,assembly, alteration or improvement of railroad moving stock.

e) Sales of carbon dioxide or other gases used intertiaryproduction.

f) Sales of lodging services provided by a personknown to thetrade and public as a guide or outfitter.

g) Sales of farm implements are not subject to theadditional onepercent statewide sales tax that went into effect July 1,1993. Sales of farm implements aretaxed at 3percent plus any applicable optional sales taxes instead of the 4percentstatewide tax on tangible personal property and services.Sale or lease of any aircraft and the tangiblepersonalproperty permanently affixed or attached as a component part ofthe aircraft.yoming does tax food purchases not purchasedwith foodstamps. This is a commonexemptionadopted by many states. Twenty-seven offifty states and the District of Columbia exempt food sales fromtaxation. Table 5E, page 12 under taxrates describeswhich states currently exempt food sales, prescription drugs andnon-prescription drugs. Another common exemption that otherstates allow thatWyoming does tax is utility service to residences. Twenty-three states including Wyoming taxresidential utilityservice for electricity, natural gas and other fuel.ble 5C lists the services exempt from salesand use tax inWyoming.[1]If you combine the written exemptions andthose consideredexempt because they are not taxed by statute, there are over 100exemptions andgrowing. Each time a newservice isoffered by some enterprising individual that is not performed ontangiblepersonal property, it becomes exempt.

Table 5C

Rates

Thefirst recorded sales tax in Wyoming history were limited to afour cents agallon tax on the sale of gasoline and a tax of ten cents a poundon sales ofvegetable oleomargarine.[1] Wyoming enacted its sales anduse tax,largely in its present form in 1967. Thetax rate prior to 1967 was 2.5 percent, moving to 3 percent inthat year. On July 1, 1993, the tax ratewas increasedto 4 percent. Thisadditionalone-percent will terminate on June 30, 2002, unless it isextended by the statelegislature (Wyoming § 39-15-104(c)).

Inaddition to the 4 percent statewide sales and use tax rates, in1973 a salesand use tax option was made available to counties to be used forgeneralrevenue. Counties canlevy the tax inincrements of .5 percent not to exceed one-percent. Initially,the tax can beproposed by a petition presented to the county commissionerssigned by 5percent of the electorate of the county voting at the lastgeneral election orwith approval of two-thirds of the governing bodies of theincorporated municipalitieswithin the county. Once the tax is proposed, it must be approvedby a majorityof the electorate of the county. Thetax can be renewed in one of two ways: (1) Depending on the original resolution, the tax can berenewed eachgeneral election, every two years or at every other generalelection, everyfour years, by a vote of the electorate of the county. (2) Once the tax is imposedby the vote ofthe electorate of the county, it can be renewed by a resolutionapproved by thegoverning board of the county and by an ordinance approved by themajority ofthe governing bodies of the municipalities within thecounty. Method two has never beenused. (Wyoming §39-15/16-201/211)(i).In1984, the legislature allowed counties upon majority vote of theelectorate, toassess another one-percent sales tax for construction of capitalfacilities. The tax, whenproposed,must be for specific construction projects and for a specificamount of time. The amount of time the tax isassessed isbased upon the time it is estimated it will take to collect thetax to eitherpay for the projects or to pay off bonds issued for the projects.(Wyoming §39-15/16-201/211)(iii).Anoptional lodging tax was allowed in 1986 by the statelegislature. Initially,the tax can be proposed by a petition presented to the countycommissionerssigned by 5 percent of the electorate of the county voting at thelast generalelection or with approval of two-thirds of the governing bodiesof theincorporated municipalities within the county. The tax must beadopted by themajority vote of the electorate of a Wyoming county or amunicipality withinthe county. The tax canbe levied inincrements of one-percent not to exceed 4 percent. The tax is levied against lodging services[1]and is paid by transient guests[1].(Wyoming § 39-15/16-201/211)(ii).

Until1998, the tax collected was to be used only for travel andtourist promotionwith the possibility of 10 percent of the revenues going to thegeneralrevenues of the governmental entity. The1998 legislature allowed as much as 30 percent of the revenuesgenerated to beused for the mitigation of visitor impact services. Depending onthe percentageof the tax levied, a certain amount of lodging tax collectionsfor the previousthree years must be collected before the tax money can be used todefer tourismimpacts.[1]n be renewed by submitting it to the vote of theelectorate at ageneral election held every four years.Table5D, page 11 issued by the Wyoming Department of Revenue, ExciseTax Divisionshows the sales tax rates for the individual Wyoming counties andtowns as ofJanuary 1, 1999.Table5E, page 12 shows as of January 1, 1999 the sales tax rate ineach state andthe states that allow exemptions for food, prescription drugs andnon-prescription drugs.[1] The tax rates shown onlyreflect thestatewide rates for each state and do not include optional localsale taxrates.

April 1, 1998.

For 1983 through 1987 “ AllPurpose” is used, for 1991 through1997, the “ Statewide average” is shown.

“Unitaryvaluation” is the process of determining the value of a companyas a wholewithout reference to individual parts. The unitary approach is used in the valuation ofproperties, whichderive their value from interdependent assets workingtogether. The market value is not asummation offractional appraisals, but the value of a company as an operatingunit. Department of Revenue, RegularRules, Dec.11, 1996, Chapter 7 Page 3.

Take in kindmeans the event when an election is made by an interest ownerunder a lease orjoint operating agreement, with notice to the affected parties,to separatelymarket or dispose of crude oil, natural gas or natural gasproducts. Aninterest owner must affirmatively exercise an option under alease or operatingagreement to separately market his share of the production toqualify as takein kind.

The 10.5percent coal severance tax was distributed in the followingmanner: 2.5 percentPWMTF, 1.5 percent Wyoming Department of Transportation, 1percent StateHighways, 2 percent General Fund, 1.5 percent Capital FacilitiesTax, 2.0percent Coal Impact Tax Fee. Source: Marion Loomis, ExecutiveDirector, WyomingMining Association, May 27, 1998, Gillette, Wyoming.

The WyomingConstitution Article 15, Section 16 requires all monies raisedfrom fuel taxesto be used on the State roads and highways. The money distributed from severance taxes to the LeakingUndergroundStorage Tank (LUST) fund is offset by the one (1) cent LUST taxcollected inthe gasoline and fuel tax.

The 10.5percent coal severance tax was distributed in the followingmanner: 2.5 percentPWMTF, 1.5 percent Wyoming Department of Transportation, 1percent StateHighways, 2 percent General Fund, 1.5 percent Capital FacilitiesTax, 2.0 percentCoal Impact Tax Fee. Source: Marion Loomis, ExecutiveDirector, WyomingMining Association, May 27, 1998, Gillette, Wyoming.

Publishedby the Wyoming Taxpayer’s Association in the WTA FiscalResearcher, April 23,1998, p.4

Publishedby the Wyoming Taxpayer’s Association in the WTA FiscalResearcher, April 23,1998, p.3.

Thedefinition of sales price by Wyoming § 39-15-101 (a)(vi) is theconsiderationpaid by the purchaser of tangible personal property excluding theactualtrade-in value allowed on tangible personal property exchanged atthe time oftransaction, admissions or services which are subject to taxationas providedby this article and excluding any taxes imposed by the federalgovernment orthis article.

Publishedby the Wyoming Taxpayer’s Association in the WTA FiscalResearcher, April 23,1998, p.5.

Griffenhage&Associates,ReportMade to theSpecial Legislative Committee on Organization and Revenue,1933, p. 566.

Lodgingservice means the provision of sleeping accommodations totransient guests andshall include the providing of sites for the placement of tents,campers,trailers, mobile homes or other mobile sleeping accommodationsfor transientguests. Wyoming § 39-15-101(a)(i).

A transientguest is a guest who remains for less than 30 continuous days.Wyoming §39-15-101(a)(xi).

[1]One percent rate -$500,000.00 incollections for the previous 3 years, 2 percentrate-$1,000,000.00 incollections for the previous 3 years, 2 percentrate-$1,500,000.00 incollections for the previous 3 years, 2 percentrate-$2,000,000.00 incollections for the previous 3 years.

[1]Data from the U.S. Department of Commerce, Census Bureau andpublished by theFederation of Tax Administrators, 444 north Capitol Street, N.W.,Washington,D.C. 20001. Informationwas obtainedfrom the website of the Federal Tax Administrators,www.taxadmin.org.

[1]Mobile homesare valued as personal property unless the mobile home isinstalled on apermanent foundation and then is taxable as real property. WS 31-2-502(b)

CynthiaLummis served on the sub committee established in January, 1988that draftedthe constitutional amendment that required uniformity of value,Article 15,Section II. Her commentsfor reasonsbehind this article and the assessment ratios adopted by thelegislature in 1988were given in an interview on

Relief Measures

Statute

Mill Levy

Administration

Car Companies

Tax Payment

Enforcement

Collections and Distribution

MINERALTAXES

Statutory Backgroundand Basis ofProperty Valuation

Coal

Trona

Bentonite

Uranium

Sand and Gravel

Other Valuable Deposits

Administration

Administrator, Reporting andPaymentRequirements

Collection andDistribution

Collection

Uranium

Coal Severance Taxes- AboveGround

Total Tax 7%

Coal Severance Taxes- BelowGround

Total Tax 3.75%

Oil and Gas Severance Taxes

Total Tax 6%

TABLE 4I

Severance Tax Distributions

Capital

fProperty Valuation

Coal

Trona

Bentonite

Uranium

Sand and Gravel

Other Valuable Deposits

Administration

Administrator, Reporting andPaymentRequirements

Uranium

Coal Severance Taxes- AboveGround

Total Tax 7%

Coal Severance Taxes- BelowGround

Total Tax 3.75%

Oil and Gas Severance Taxes

Total Tax 6%

TABLE 4I

Severance Tax Distributions

Capital

SALES AND USE TAX COMPOSITION

Statute Citations andTax Basis –Sales and Use Tax

TABLE 5B

Table 5C