Wyoming Income Tax Calculator

Wyoming Income Tax: The #1 Ranked State for Tax Competitiveness — And Why That Number Is Earned

When the Tax Foundation ranks Wyoming #1 in its State Tax Competitiveness Index for 2026, it is not measuring a single variable. It is the aggregate result of Wyoming having eliminated or never adopted essentially every major state tax that exists in America. No personal income tax. No corporate income tax. No estate tax. No inheritance tax. No gift tax. A sales tax rate of 4% — among the lowest of any state with a general sales tax — that exempts grocery food. A property tax with a 0.57% average effective rate, ranking among the lowest nationally. The combination of all of these zeros and near-zeros in a single state is what the #1 ranking reflects, and no other state currently matches it. Wyoming residents and businesses operating in the Cowboy State retain more of what they earn, accumulate, and eventually pass on than in virtually any other jurisdiction in the United States.

The foundational question any honest Wyoming tax guide must answer is: how does the state fund government without any of these taxes? The answer lies beneath the surface of the land itself. Wyoming sits on some of the most valuable mineral reserves in North America — Powder River Basin coal (the largest coal-producing basin in the US), Jonah Field and Pinedale Anticline natural gas, Niobrara and Green River Basin oil, and vast trona deposits in Sweetwater County that supply roughly 90% of the nation’s soda ash. The state levies severance taxes on the extraction of each: 6% on oil and natural gas, 7% on surface-mined coal, 3.75% on underground coal, and 4% on trona. Federal mineral royalties on extraction from federal lands — which cover roughly half of Wyoming’s total land area — add a second major revenue stream. These mineral revenues flow into the Permanent Wyoming Mineral Trust Fund (PWMTF), a sovereign wealth fund created in 1974 whose investment earnings supplement the state general fund each year. Wyoming does not pay its residents a dividend from this fund the way Alaska does — but it uses the fund’s earnings to replace the revenue that an income tax would otherwise generate.

The Permanent Wyoming Mineral Trust Fund: The Engine Behind Your Zero State Tax

The PWMTF was established by Wyoming voters in 1974 as a constitutional provision, ensuring that a portion of every dollar extracted from the state’s mineral wealth is set aside in a permanent endowment rather than spent immediately. The spending policy, set by state statute (W.S. 9-4-719), distributes five percent of the five-year average market value of the fund’s corpus annually. In fiscal year 2025, the fund generated approximately $238 million for Wyoming’s General Fund and transferred into various reserve accounts with an estimated balance of over $638 million in the reserve account alone. The Permanent Mineral Trust Fund is Wyoming’s fiscal backbone — the structural reason that mineral wealth is not depleted through current spending, but instead compounds as a long-term asset that perpetually underwrites zero income taxes for Wyoming residents. It is, in effect, Wyoming’s version of Alaska’s Permanent Fund — except Wyoming distributes the benefit as a tax exemption rather than a direct cash dividend to residents.

Wyoming for Retirees: Every Dollar of Retirement Income, Untouched by the State

For retirement income planning, Wyoming’s zero income tax covers the full spectrum of income types that retirees typically draw on. Social Security benefits are free of Wyoming state income tax. Traditional IRA and 401(k) distributions are free of Wyoming state income tax. Roth IRA withdrawals are free of Wyoming state income tax. Pension income — whether from a private employer, a government pension, or the military — is free of Wyoming state income tax. Capital gains from selling investments, a business, or real estate are free of Wyoming state income tax. Dividends and interest from savings accounts and bonds are free of Wyoming state income tax. This comprehensive exemption means that a retiree drawing $120,000 per year from a combination of Social Security, IRA distributions, and investment income owes Wyoming $0 on all of it — compared to roughly $6,800–$9,000 in Colorado, Montana, or Idaho at that income level. Wyoming also imposes no estate tax and no inheritance tax, so the transfer of accumulated retirement savings and property to heirs faces only the federal estate tax (with its $13.61 million per-person exemption in 2025) and no additional state levy. For families with substantial investment portfolios, Wyoming’s complete absence of death taxes creates long-term wealth preservation advantages that extend across generations.

Wyoming’s Business Tax Climate: Where the LLC Was Born

Wyoming’s tax competitiveness for individuals extends fully to businesses — and has done so for nearly five decades. Wyoming was the first state in the United States to authorize the Limited Liability Company (LLC) structure, passing LLC legislation in 1977. The LLC form — which combines the liability protection of a corporation with the tax pass-through treatment of a partnership — has since become the most popular business structure in America, and Wyoming’s legislature created it before any other state saw the need. Wyoming continues to attract business formation registrations from across the country. There is no Wyoming corporate income tax, no state franchise tax on net income, no business entity income tax of any kind. In 2021, Wyoming became the first state to legally recognize Decentralized Autonomous Organization LLCs (DAO LLCs), establishing a legal framework for blockchain-based organizations and attracting cryptocurrency and Web3 businesses seeking a jurisdiction with forward-looking legal infrastructure. Wyoming’s business formation laws also offer strong privacy protections — member names of LLCs need not appear in public filings — making Wyoming a popular incorporation state for individuals and businesses nationwide who value both tax efficiency and structural privacy.

Wyoming vs. Colorado, Montana, and Idaho: The Mountain West Tax Reality

Wyoming’s Mountain West neighbors all levy state income taxes, and the comparison at typical income levels is significant. Colorado has a flat 4.4% income tax — on a $100,000 income, that is $4,400 in state income tax that a Wyoming resident at the same income owes $0. Montana uses a two-bracket system with a top rate of 5.9%, meaning a Montana resident at $100,000 might owe $5,000–$5,500. Idaho uses a flat 5.3% rate, generating approximately $5,300 in state income tax on the same $100,000. Utah is flat at 4.5%. The annual savings of living in Wyoming versus these states ranges from $4,000 to $6,000 at a $100,000 income level — and scales proportionally higher as income increases. A Wyoming remote worker earning $200,000 saves approximately $8,800 versus Colorado, $10,000–$11,000 versus Montana, and $10,600 versus Idaho each year, purely from the absence of state income tax. Over a 10-year career at that income level, the cumulative Wyoming advantage exceeds $85,000–$106,000 in state income tax savings versus most Mountain West neighbors — before accounting for investment returns on the money retained. Wyoming’s 0.57% property tax partially erodes this advantage for homeowners compared to states with lower property taxes, but remains lower than Colorado (0.49% — comparable) and far lower than high-property-tax states in the Northeast or Midwest.

Remote Workers, High Earners, and the Jackson Hole Effect

Teton County — home of Jackson Hole — has one of the highest median household incomes of any county in the United States, routinely ranking among the top three counties nationally by per capita income. The residents of this extraordinarily wealthy enclave pay Wyoming’s state income tax on their wages, investment income, carried interest, and capital gains: $0. This is the most concentrated demonstration of Wyoming’s income tax advantage — a concentration of wealth that would generate hundreds of millions of dollars in annual state income tax revenue in virtually any other state, redirected instead to private households and businesses. Remote workers earning high incomes from technology, finance, and professional services have increasingly recognized Wyoming as an option for relocation. A software engineer earning $180,000 from a remote-first employer headquartered anywhere in the country owes Wyoming $0 in state income tax. In California, the same income would generate approximately $14,000–$16,000 in state income tax annually. In New York, approximately $12,000–$14,000. In Colorado, approximately $7,920. The federal standard deduction and federal brackets apply identically regardless of which state you live in — the only variable at the state level is whether your state adds an income tax on top, and Wyoming’s answer has always been no.