Wyoming has no state income tax — and never has. Oil, gas, and coal severance taxes fund the state. Your paycheck loses only federal taxes and FICA, nothing more.
Wyoming's Permanent Wyoming Mineral Trust Fund, coal royalties, oil and gas severance taxes, and federal mineral revenue sharing fund state services without requiring a personal income tax. Wyoming also has a 4% state sales tax (counties add up to 2% more, typically 6% total). Property taxes fund local services. For Wyoming workers, the only paycheck deductions are federal income tax + Social Security (6.2%) + Medicare (1.45%).
Wyoming is the least populous state in the United States (approximately 580,000 residents), yet it generates enormous mineral wealth. Wyoming is the largest coal-producing state in the US and a major oil and natural gas producer. The Powder River Basin alone produces roughly 40% of US coal. Mineral severance taxes — levied when coal, oil, or gas is extracted — flow into state government coffers and the Permanent Wyoming Mineral Trust Fund. This mineral-based revenue model allows Wyoming to provide state services without levying an income tax. Even when mineral prices drop, the Trust Fund's investment income partially offsets lost severance tax revenues.
Jackson Hole is one of America's most expensive small towns — and it has no state income tax. Jackson, Wyoming sits in a valley surrounded by Grand Teton National Park and the Bridger-Teton National Forest. It hosts some of the most expensive real estate in the United States, alongside ski resorts, luxury ranches, and vacation estates. Wealthy individuals from California (13.3% top income tax), New York (10.9%), and other high-tax states establish Wyoming residency specifically to benefit from zero state income tax. A hedge fund manager with $5 million in annual income saves approximately $660,000 per year by establishing Wyoming residency vs. California residency — enough to afford almost any property in Jackson.
Wyoming is also known for favorable trust and LLC laws that attract financial and legal structures regardless of where the beneficial owner lives. The combination of no income tax, favorable trust laws, and asset protection statutes makes Wyoming a preferred domicile for LLCs, family limited partnerships, and trusts. This legal-infrastructure benefit extends beyond just paycheck withholding — it's a comprehensive tax-advantaged environment for high-net-worth individuals and business structures.
Cheyenne (state capital), Casper (energy hub), Laramie (University of Wyoming), Gillette (coal mining), and Rock Springs (energy/trona) are Wyoming's major cities. The economy divides roughly between energy production, ranching/agriculture, tourism (Yellowstone, Grand Teton, Devils Tower), and state government. Cheyenne's proximity to Denver (90 miles south) has attracted some Colorado commuters who establish Wyoming residency for the income tax advantage while working across the border — though Colorado has strict rules about what constitutes Wyoming residency for their own tax purposes.
No Wyoming state income tax. Only federal income tax, SS (6.2%), and Medicare (1.45%) are deducted. Consult a tax professional for advice.
| Gross Pay (this check) | $0.00 |
| Federal Income Tax | −$0.00 |
| Wyoming State Tax | $0.00 ✓ |
| Social Security (6.2%) | −$0.00 |
| Medicare (1.45%) | −$0.00 |
| Net Take-Home Pay | $0.00 |
No. Wyoming has never had a state income tax on wages, salaries, or investment income. Wyoming's constitution does not prohibit an income tax, but the state has consistently chosen to fund government through mineral severance taxes, the Permanent Wyoming Mineral Trust Fund, a 4% sales tax (counties add up to 2% more), property taxes, and federal mineral royalties. Wyoming workers pay only federal income tax and FICA — zero state income tax of any kind.
Wyoming's state budget relies heavily on mineral severance taxes levied when coal, oil, and natural gas are extracted from Wyoming land. The Powder River Basin alone produces ~40% of US coal — generating enormous severance tax revenues. The Permanent Wyoming Mineral Trust Fund invests these revenues; its investment income provides additional stable funding. Wyoming also receives federal mineral royalty payments for energy production on federal lands. Combined, mineral-based revenues fund a substantial share of Wyoming's state budget, making the income tax unnecessary as long as energy production continues.
Yes. Wyoming has a 4% statewide sales tax. Each county can add up to 2% more for a total of up to 6% in most Wyoming counties. Cheyenne (Laramie County) typically has a total sales tax of 6%. Jackson (Teton County) also applies the maximum county add-on. Wyoming's sales tax applies to goods but generally not to groceries or prescription medications. Even with the sales tax, Wyoming's overall tax burden is very low compared to states with income taxes.
Wyoming offers three major financial advantages for high-net-worth individuals: (1) No state income tax — saving high earners 3–13% on income that would be taxed in states like California, New York, or Minnesota; (2) Favorable trust and LLC laws — Wyoming pioneered the single-member LLC and has strong asset protection trust statutes; (3) No state inheritance tax or estate tax. A California resident with $5 million in annual income can save $650,000+ per year by establishing genuine Wyoming residency. Jackson Hole, in particular, has become a destination for this purpose due to its ski amenities and luxury real estate.
Colorado has a flat 4.4% income tax. At $100,000 in wages, Colorado costs approximately $4,400 per year in state income tax; Wyoming costs $0. The annual savings are $4,400 on $100,000 — or $8,800 on $200,000. For workers who can choose between Cheyenne, WY and Fort Collins, CO (roughly 45 miles apart), Wyoming's income tax advantage is meaningful. Factor in that Colorado's cost of living is broadly similar to Wyoming's non-resort communities, and the financial case for Wyoming is clear for high earners.
Wyoming has no state income tax of any kind, so Social Security benefits, pension income, 401(k) distributions, and IRA withdrawals are all completely free of Wyoming state income tax. Wyoming is one of the most retiree-friendly states in the mountain West from a tax perspective.
No state income tax means no Wyoming state tax on overtime or tips. The federal exemptions under the One Big Beautiful Bill (up to $25,000 for tips, up to $12,500 for overtime premium) still apply to reduce your federal income tax. Wyoming workers get the full federal savings with zero state income tax on any of it. See our Tips Tax Calculator and Overtime Tax Calculator.