How to Establish Wyoming Residency for Tax Purposes
With no income tax in the state, the Wyoming Department of Revenue does not have formal requirements for establishing residency. The main barrier to receiving Wyoming’s tax benefits is proving to your former state that you are no longer a resident there.
Though there are specific Wyoming residency requirements for hunting and fishing licenses, a driver’s license, state tuition and voting, being a “resident” can often be as simple as currently living in the state. Your former state may have other ideas, however.
Populous, tax-heavy states like California and New York will often pursue income taxes from owners of second homes in tax-friendly states. Their determinations for any taxes owed are based on unique, fact-based analyses instead of a clearly defined bright-line rule across states.
While it is best to discuss the specific regulations in your former state with a tax-planning professional, the following steps can help demonstrate that you have moved your domicile to Wyoming and are no longer subject to your former state’s income tax.
Terminating Domicile in Your Former State
Maintain a home (ideally one that you own) in Wyoming
Sell or downsize your home in your former state
Stay in Wyoming more than anywhere else (and log the time you spend here)
Register to vote and actively vote in Wyoming (It’s easy)
Obtain a driver’s license and register vehicles in Wyoming
Reallocate your charitable donations toward Wyoming-based nonprofits
Move important possessions, like family heirlooms, photo albums and pets, to your Wyoming home
Engage local service professionals such as Wyoming doctors, dentists, accountants and lawyers
Switch to a bank and/or financial planner in Wyoming
Change your mailing address to Wyoming for clubs, magazines, credit cards, etc.
Update documents such as passports, insurance policies and wills with your Wyoming address
Sign an affidavit of domicile
Migrate the situs of your trusts to Wyoming
Join local civil, social and religious organizations in Wyoming
Wyoming Tax Benefits
Below are just some of Wyoming’s excellent tax benefits. Here in Jackson Hole, tax-planning professionals can help you establish residency and navigate these benefits, including First Western Trust for wealth management and the Willow Street Group for forming private family trust companies.
No State Income Tax
Wyoming residents do not pay state income tax and there is no corporate income tax.
No Estate or Inheritance Tax
Wyoming residents can pass their home to heirs without a tax being paid on that property’s value.
Dynasty Trusts
Protect your property from federal estate taxes for up to 1,000 years by forming an LLC or family partnership and placing it in a Wyoming dynasty trust.
Low Property Taxes
Wyoming’s property taxes are low compared to most states, and the taxes you pay are based on the assessed value of your property.
No Tax on Real-Estate Sales
Should you want to sell your home in Wyoming, you won’t have to pay a real estate tax on that sale.
No State Gift Tax
In Wyoming, you can “gift” your property to your heirs without being subject to a gift tax.
No Intangible Taxes
Wyoming does not tax gross earnings from financial assets like stocks, bonds and savings accounts.
No Tax on Out-of-State Retirement Income
If you receive retirement income from another state, that state cannot tax you on it while you’re a resident of Wyoming.
No Excise Taxes
Wyoming does not tax its residents on the day-to-day expenditures of purchasing groceries and filling up vehicles with gas.