Could an upcoming Supreme Court decision related to online sales-tax collection help Wyoming provide more money to its schools?
That, and making Interstate 80 in southern Wyoming a toll road, were two of the revenue possibilities brought up at a recent legislative forum at Northwest College.
Three local state legislators — Rep. David Northrup, R-Powell, Rep. Dan Laursen, R-Powell, and Sen. Ray Peterson, R-Cowley — discussed state budget issues and fielded questions from those in attendance.
“In Wyoming, we’ve been spoiled with that mineral production and the 70 percent dependency on that,” Peterson said, referring to the percentage of state revenue that comes from minerals. “When that goes south, then we scramble. But, because of those good years, we were able to do a lot of good things — and Wyoming’s done some great things with education and we’re proud of that. The question now is how do we make those cutbacks? How do we reduce those expenditures and still maintain the quality?”
One way could be if the Supreme Court of the United States rules in favor allowing states to collect sales taxes on online purchases.
The Legislature passed a bill in 2017 requiring “remote sellers” — including online retailers — to assess and collect Wyoming’s sales taxes if they have $100,000 worth of business or 200 transactions in the state in a given year; prior the bill’s passage, it was the buyer’s responsibility to pay sales taxes, and few people made those payments.
But online retailers have challenged whether states have the authority to force them to collect taxes.
The Supreme Court is supposed to hand down a ruling on the case, known as South Dakota vs. Wayfair, Inc., by the end of June.
“I think we’re all excited about it, because of the prospects of that money coming in,” Northrup said. “And people expect to pay it. It’s a tax you expect to pay — sales tax — because we’re all pretty much conditioned to do that.”
Peterson said a ruling in favor of online sales tax collection would be a huge boost for Wyoming and its budget.
“That’d be exciting for Wyoming,” Peterson said. “That’d be the best thing that could happen to Wyoming. I don’t know the number, but it’s been estimated to be in the $50 ... to $70 million additional generation of revenue. My prediction, it’s probably more than that. People will be surprised.”
“We have one company participating now and it’s in the millions of dollars, just one company,” he added.
Northrup echoed Peterson’s sentiments.
“Every little bit will help,” Northrup said. “When you’re coming down to cutting education $40 million, [then] we get $40 million more in tax from a new source, that sounds like a win for not cutting $40 million. Every little bit helps. It’s just another drop in the bucket.”
Another possibility would be converting Interstate 80, which runs across southern Wyoming, into a toll road; Laursen said the Wyoming House of Representatives’ Transportation Committee has been discussing the idea. Twenty-seven states — including neighboring Colorado and Utah — have toll roads.
With I-80 being a major east-west thoroughfare in the United States, it could bring millions of dollars per year into Wyoming. Case in point: The 232-mile long Kansas Turnpike generated more than $17 million in revenue in 2014. I-80 runs for more than 400 miles across Wyoming
“It’s been discussed before and it’ll continue to be discussed,” Peterson said. “With these tighter budgets, it might force us to do something about it finally and pursue it a little stronger.”