ESPC Home | 2005 LAP* Book | Background | Legislator Profiles | Key Votes | LAP* Book Home
Numeric List Budget Accountability Health & Human Services Justice System Education State Employees Taxation & Revenue Wildlife & Environment Worker & Public Safety Tribal Affairs Senior Citizens	HB 188: Sales Tax on Mineral Well Services - Exemption 2005 General Session Sponsor: Joint Revenue Interim Committee Tax Exemptions - Background Tax Exemptions - Background          Wyoming collects a statewide sales and use tax of 4% on retail sales of tangible personal property and many other products and activities, defined in state statute. Wyoming’s statutes also provide a number of specific exemptions to the state sales tax.          Under current statute, the sales price paid for all services to tangible property within oil and gas well sites, including drilling, production, and all other services required for the entire productive life of the well until it is abandoned, is subject to sales tax.          HB 188 would have exempted oil and gas well site services, by repealing statutes that say they must pay sales tax.          The Legislative Service Office (LSO) was unable to estimate the decrease in revenue the state would experience from this sales tax exemption, because the way sales tax is coded for oil and gas field services does not distinguish between taxes paid on sales of tangible property from sales of services. The LSO noted that almost $55 million was paid in sales tax for oil and gas field services in fiscal year 2004, so the most one could conclude was that sales tax revenue would decrease by something less than $55 million.          Supporters of HB 188 argued that, even though oil and natural gas prices are nearing record highs, production is up, and exploration and drilling are up, oil and gas companies still need the economic benefit that this tax exemption would provide.          Opponents argued against sales tax exemptions in general, and specifically against tax exemptions that favor single special interest groups, as HB 188 did. They especially argued against this sales tax exemption for oil and gas developers and producers, noting that energy producers in general are doing very, very well economically right now, and that there is no compelling reason to give them more tax breaks and to reduce tax revenue to the state. Tax exemption opponents again noted that ordinary citizens don’t receive the same degree of legislative protection as special interest groups such as mineral producers, because citizens don’t have the same lobbying presence at the Legislature as powerful special interest groups have.          The House Revenue Committee unanimously defeated HB 188.