HB 154: Sales Tax on Food – Exemption
2007 General Session

Sponsor: Rep. Del McOmie (R-H54, Lander); co-sponsors Reps. Liz Gentile (D-H36, Evansville), Keith Gingery (R-H23, Jackson), Timothy Hallinan (R-H32, Gillette), Debbie Hammons (D-H27, Worland), Steve Harshman (R-H37, Casper), Pete Illoway (R-H42, Cheyenne), Pete Jorgensen (D-H16, Jackson), Jack Landon (R-H30, Sheridan), Saundra Meyer (D-H49, Evanston) and Sens. John Barrasso (R-S27, Casper), Rae Lynn Job (D-S12, Rock Springs), Tony Ross (R-S4, Cheyenne), Kathryn Sessions (D-S7, Cheyenne)

Last year, after several years of trying, the Legislature passed a temporary sales tax exemption on the sales of food for domestic home consumption (i.e., groceries). The exemption passed last year was amended into the budget bill, and will expire at the end of the current two-year budget.

HB 154 proposed to extend the exemption of groceries from sales taxation until July 2013. The bill would have altered the sales tax distribution formula to reimburse local governments for the estimated revenue decrease they would otherwise experience as a result of not applying sales tax to food.

Statewide sales tax in Wyoming is four cents per dollar. Counties have the option of adding up to two additional cents per dollar for general operations and capital construction projects, so sales tax in some Wyoming communities ranges up to six cents per dollar.

Supporters of HB 154 argued that sales tax is a regressive form of taxation, especially when food and clothing are included, as they traditionally have been in Wyoming. When basic necessities that people have no choice about buying are taxed, low-income families end up paying a higher proportion of their money on items subject to sales tax. So, sales tax on basic necessities such as food disproportionately impacts poorer people.

Another bill in the 2007 session, HB 93, contained similar provisions to permanently exempt food from sales tax and to reimburse local governments for lost revenue, and HB 154 was laid aside in favor of HB 93. HB 93 was eventually passed, but only after the provisions to reimburse local governments for lost revenue had been dropped from the bill.

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