CHEYENNE — A bill to create Wyoming’s first corporate income tax is dead.
After intense pressure by both in-state, anti-tax conservatives and numerous out-of-state organizations, Senate Corporations Committee Chairman Bill Landen, R-Casper, killed a bill to create the first corporate income tax in state history Tuesday evening without taking a vote.
With the decision, the committee walked away from what conservative estimates said could have produced roughly $45 million in new funding for the state’s schools.
Tuesday’s no vote comes after a hearing on the bill last week that included nearly four hours of public comment from a slew of corporate lawyers, lobbyists and fiscal conservatives. They all opposed the bill, which targeted large, publicly traded C-Corporations with 100 or more shareholders, a group consisting primarily of big box stores and large, out-of-state corporations.
The bill, House Bill 220, had previously coasted through the House of Representatives.
The bill’s sponsor and chief architect, Rep. Jerry Obermueller, R-Casper, declined to comment Tuesday evening.
In brief comments Tuesday night, members of the committee told a packed committee room why they did or did not support the bill. Sen. Charlie Scott, R-Casper, likened the bill to a “creative geologist” who strikes oil but does not have the means to extract it, adding that he thought there was a very real question of whether or not it’s worth “completing the well” by passing the bill.
He also expressed concerns with the constitutional liabilities the bill might present and “while we would likely win it,” he said, he thought the state would potentially be faced with litigation.
Sen. Wendy Davis Schuler, R-Evanston, said she went back and forth on the bill as well, and that her constituent emails as of late consisted of a mixture of support for and against the tax, with many concerned it would open the door to other taxes, lead to shifting costs or potentially costing jobs.
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Though other states have similar taxes and admitting “we might be missing the boat a bit,” Schuler said she could not bring herself to vote for a tax with so many uncertainties.
“There’s no doubt we need to diversify our tax base and take a look at it,” she said. “I had emails saying we need to quit spending so much, and there’s some truth to that. But we need more revenue streams, and sustainable ones.”
In an impassioned speech, Sen. Cale Case, R-Lander, said that while the legislature hasn’t taken the steps needed to balance the budget, the state was largely being taken advantage of by out-of-state corporations that have “sucked the life out of our traditional main street,” hurting small businesses and the economy.
“When (small businesses) made profits, those profits stayed in the community,” he said. “Now, they’re scattered to stockholders all over the world. None of these companies’ headquarters are here; none of the value is spread over here.
“Most people haven’t thought about it for five minutes when they send me an email, saying they don’t support the tax,” he added.
Landen, however, said that the state has already cut plenty and, though he killed the bill — saying he knew the fate it faced in the Senate — the state needed to take a serious look at its finances, particularly after $300 million in cuts and government reductions in workforce anywhere between 10 and 20 percent of their peak.
“Have we tightened budgets? Yeah, we have,” he said. “So when people say it’s a spending problem and not a revenue problem, the hair goes up on my neck. Because we have worked on this.
“If it isn’t now, then when?” he added. “If you’re adamant that we need more cuts, where do you want to go with that?”