Wyoming LLC Taxes
Wyoming LLCs are taxed as pass-through entities by default. This means that revenue from the business passes from the LLC to the tax returns of the LLC members. Members are then responsible for paying federal income taxes and the 15.3% self-employment tax (12.4% social security and 2.9% Medicare). However, with no personal income tax, no corporate income tax, no gross receipts tax, no franchise tax, and no excise tax, Wyoming LLC members can save more of their hard-earned money. We’ll go over the few taxes your LLC can expect to pay in Wyoming.
In this article, we’ll cover:
How Are Wyoming LLCs Taxed?
If you’re the only member of your LLC, you’re a single-member LLC (SMLLC), which means that your LLC will be taxed as a sole proprietorship by default. If you have a business partner (or partners) you’re in a multi-member LLC, which is taxed as a general partnership by default. Unless you’ve elected S- or C-corp tax status for your LLC, you’ll use these IRS forms to file federal taxes:
- Single-member LLC—Form 1040 (usually Schedule C, but some SMLLCs file C-EZ, E, or F)
- Multi-member LLC—Form 1065
Wyoming LLCs taxed as S-corp
Just like LLCs, S-corps are taxed as pass-through entities by default. The difference between the two is that the profits from an LLC are distributed to members in a lump sum. An S-corp can distribute profits as dividends and as a reasonable salary. Salary payments will need to pay self-employment taxes (15.3%), but dividend distributions won’t. In some cases the choice to elect S-corp taxation can save members a significant amount of money. Before you make the S-corp election, it’s a good idea to chat with a CPA before you make any money moves.
It should be noted that in order to qualify for S-corp status, your LLC will need to meet certain IRS requirements like having no more than 100 members. You’ll file IRS Form 2553 to make the election, and you’ll report S-corps income on Form 1120-S.
LLCs taxed as C-corp
LLCs can also elect to be taxed as C-corps. The default tax status for corporations, C-corp election, while not common with LLCs, can make one more attractive to investors and also allow for more tax deductions than a default LLC tax status. You’ll make the C-corp tax election by filing Form 1120 with the IRS. An LLC taxed as a C-corp will pay the 21% federal corporate income tax, but because Wyoming does not have a state-level corporate income tax, you won’t have to worry about added tax bills on corporate profits.
Wyoming State Income Tax
Wyoming consistently ranks as one of the lowest taxed states. They accomplish this by levying no personal income tax. This means that Wyoming LLC members only have to pay federal income and self-employment taxes. No income tax filings with the state saves members time and money.
Sales and Use Tax
Wyoming taxes most tangible goods and services at a rate of 4%. Some local and county governments may add up to 2% in additional sales taxes. Your LLC will need a sales tax license in order to collect the state sales and use tax. To get a license you can apply online, or download and print a Sales/Use Tax License Application. Online applications are processed almost immediately, while mailed applications can take up to a week or longer depending on the post office. No matter how you apply, there is a $60 one-time fee to obtain your tax license.
Wyoming Internet Filing System for Business
Wyoming Department of Revenue
122 West 25th Street, Suite E301
Herschler Building East
Cheyenne WY 82002-0110
Wyoming Annual Report and License Tax
Wyoming LLCs must file an annual report and pay the state license tax every year. The report and tax are due by the first day of the month of the LLC’s formation. So, if you formed your Wyoming LLC on September 17th of 2022, the report and tax will be due September 1st, 2023, and every year after. The tax costs $60 or 0.00002% of the value of your LLC assets, whichever is larger. For example, if the value of your LLC’s assets is $1 million dollars, you’d multiply 1,000,000 by 0.00002% and come out with a $20 tax valuation. However, you’ll still owe the $60 minimum for the license tax.
Learn more about filing the Wyoming Annual Report and State License Tax.
Local Wyoming Taxes
The majority of Wyoming’s 23 counties levy an additional 2% sales tax on items or services purchased within jurisdictional lines. Sublette County levies no additional sales tax, and five counties only add a 1% tax to purchases. To get an idea of what kind of local sales taxes your LLC will owe, get in touch with your county clerk’s office.
Other Taxes in Wyoming
Here are a few other taxes that your Wyoming LLC needs to be aware of.
Wyoming State Employer Taxes
Does your LLC have employees or plan to hire employees? If the answer is yes, you’ll need to budget for Wyoming’s unemployment insurance taxes and workers’ compensation insurance payments. Here’s the lowdown on both:
- Unemployment Insurance (UI) Tax— Unemployment Insurance is a combined state and federal program that provides benefits to workers who have lost their jobs. Wyoming unemployment insurance rates range from 0.09% to 8.5%, depending on what kind of work the business is engaged in. Rates for new employers range from 0.287% to 8.78%.
- Workers’ Compensation— While there are some exemptions (private household employees, day laborers, professional athletes, volunteers, and federal government workers), almost every business in Wyoming with employees will need to budget for workers’ compensation costs. Any business that operates in the State of Wyoming or hires a Wyoming resident as an employee must register with the Division of Workers’ Compensation and Unemployment Insurance to have coverage determined. All employers must purchase coverage from the Wyoming Workers’ Compensation Program or from a state-chosen third party insurer if your business does not qualify for the state program.
Need more information on Wyoming UI taxes or workers’ compensation rates and options? The Wyoming Workforce Services website can point you in the right direction.
Wyoming is generally no fan of taxes, but not all industries can escape the heavy hand of the tax man. Here’s a few:
- Alcohol Tax
- Lodging Tax
- Minerals Tax (extraction)
- Motor Fuel Tax
- Petroleum Severance Tax
- Rental Property/Lodging Tax
- Tobacco and Cigarette Tax
- Vending Machine Tax
Do foreign LLCs in Wyoming need to pay Wyoming taxes?
Yes. Any LLC formed outside of Wyoming that does business in Wyoming will need to pay state and local taxes. A Wyoming foreign LLC will be required to register with the state in order to collect and remit any applicable sales taxes to the appropriate authorities.