When the COVID-19 pandemic arrived in Wyoming in 2020, local government officials began preparing for a drastic decrease in sales tax revenues.
“We were expecting … sales tax (income) to really tank,” Fremont County Treasurer Jim Anderson said during a Select Committee on Tribal Relations meeting last month in Riverton. “We were anticipating a huge drop.
“(But) we actually saw an increase from the prior year in our sales tax receipts.”
It was Wyoming’s new sales tax for online purchases that produced the extra revenue, Anderson explained.
“(That was) the shiny side of all of that,” he said. “These online retailers (began) to pay sales tax at about the same time.”
A report from state staffers indicates Fremont County generated almost $2.3 million in remote sales tax collections in 2020 – more than double the amount generated in 2019, when marketplace facilitators like Amazon didn’t have to participate in the system.
The associated sales tax distribution to the county amounted to $1.1 million in 2020 – up from about $480,000 the year before, the report states.
No Tribal distribution
That same influx of money didn’t materialize on the Wind River Reservation, because Wyoming doesn’t distribute any of its sales tax income to Tribal governments – despite the fact that Tribal members contribute to the sales tax pool, according to Bret Fanning, an administrator for the Wyoming Department of Revenue.
Wyoming does have a Tribal sales tax exemption, Fanning said, but it only applies to purchases made on the Wind River Reservation by enrolled members of the Eastern Shoshone and Northern Arapaho Tribes.
For online transactions, he said, the exemption only applies if the purchaser is an enrolled Tribal member and the item is delivered to an address on the reservation.
The purchaser also has to submit an exemption form to the online vendor, Fanning added – and the document includes some questions that aren’t very “straightforward.”
For example, one section asks about the “purchaser’s type of business.”
For a Tribal member who doesn’t own a business, it might seem natural to check the box marked “Not a business” in response to that question – but Fanning said Tribal members are actually supposed to check the box marked “Government.”
Wyoming Rep. Lloyd Larsen, R-Lander, wondered how an individual Tribal member would know which box to check.
“There’s nothing that indicates (that) here,” he said, reviewing the document. “I worry that there can be frustration on the part of an individual who is trying to get that (exemption), that they wouldn’t know how to fill it out. …
“We need to make sure that it’s user-friendly.”
A ‘simpler’ proposal
Wyoming Sen. Cale Case, R-Lander, suggested another option: Get rid of the Tribal sales tax exemption altogether and start distributing sales tax revenues to Tribal governments for purchases made on the reservation.
“It would be as if (it’s) another county,” he said. “Sales tax collections with a nexus on the reservation would be 100 percent shared with the reservation. …
“It seems a lot simpler.”
Wyoming Department of Revenue director Brenda Henson agreed that the system Case outlined could be implemented “fairly easily.”
“That is definitely a policy decision that the legislative body can address,” she said.
Education needed
Northern Arapaho Business Council Co-Chair Lee Spoonhunter pointed out that the Wind River Intertribal Council recently re-established the Wind River Tax Commission, and he recommended the state set up a meeting with that group to continue discussing the issue of taxation on the reservation.
“We have a lot of Tribal members (who) are subject to the taxes of the state of Wyoming,” Spoonhunter said. “So let’s sit down, let’s have these conversations, let’s start that dialogue.”
Tribal members who make purchases outside of the reservation – in Riverton or Lander, for example – do pay sales taxes, Fanning said in his report.
That revenue “turns around and comes back to the city – and not to the Tribe,” Northern Arapaho Tribal member Gary Collins said.
He guessed that many local residents don’t understand that fact, however, since “we as Tribal members get chastised for using a city park that we don’t pay for … when in fact we have.”
“(There’s an) educational process that needs to occur on how those taxes are collected and how they’re distributed and who benefits,” Collins said. “Because we don’t benefit as much as we probably pay in.”
The Tribal Relations committee didn’t take any action after the sales tax discussion last month, but they expressed a desire to continue working with Tribal officials on the topic.
“A lot of what the Tribes say and what their input is will kind of inform us of maybe the best path forward,” committee co-chair and Wyoming Sen. Affie Ellis, R-Cheyenne, said. “That’s feedback we’re looking for.”