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Why Wyoming Has No State Income Tax

Uncle Sheldon

By Uncle Sheldon

Uncle Sheldon Writing Team

Published Jun 20, 2026 3 min read
Why Wyoming Has No State Income Tax

Wyoming has never taxed personal income, not for a year, not as some temporary policy that stuck around. Anyone who moves to Cheyenne or anywhere else in the state from a place like Colorado or California notices it fast once a paycheck shows up without a state withholding line on it.

The constitution makes it nearly impossible, not just unpopular

A lot of states without an income tax keep it that way through political will, which can shift. Wyoming built a structural roadblock directly into its constitution. Article 15 requires that any state income tax give residents a full credit for the sales, use, and property taxes they already paid that year. Wyoming leans heavily on those three taxes for revenue, so a credit that size would cancel out most or all of what a new income tax could actually bring in. Passing one would mean doing a lot of legislative work to collect very little money, which is a hard sell in any legislature.

What pays for the state instead

Severance taxes on oil, gas, coal, and trona mining have carried a huge share of Wyoming’s state budget for generations. Mineral extraction lets the state collect serious revenue from companies pulling resources out of the ground rather than from individual paychecks, and that arrangement has held up well during the decades when energy prices cooperated. It gets shakier when commodity prices drop, which is part of why Wyoming’s budget conversations swing more with oil and gas markets than most states’ do.

The tradeoff that comes with it

The state still taxes plenty, just not income. Sales tax and property tax both apply, and property tax in particular funds a lot of what an income tax would cover in other states. For someone weighing a move to Cheyenne specifically, the bigger practical draw is usually the combination of no income tax with a noticeably lower cost of living than Denver, a straight shot south down I-25. The thing worth knowing going in is that a state this dependent on mineral revenue can see its budget tighten in ways that show up in public services during a slow stretch for energy prices, even though the income tax question itself never changes.

About the Author

Uncle Sheldon

Uncle Sheldon

We're the small writing team behind Uncle Sheldon. We write about insurance, but also about the local communities where we offer it, all to give readers something worth their time, in both English and Spanish.

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