Wyoming Changes Sourcing of Sales Tax on Services
- Feb 7, 2014 | Gail Cole
Streamlined Sales Tax (SST) Governing Board since 2008. As such, its laws, regulations and policies comply with Streamlined Sales and Use Tax Agreement. Streamline states strive to “simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance” for businesses.
Since it became an SST member state, Wyoming has “sourced sales tax on services to the location where the service was performed.” Other SST states, however, source services to “where the customer makes first use of the service after it is rendered.” To help “bring Wyoming in line with the other streamlined states, and make the sourcing of taxable sources consistent across those states," Wyoming intends to change the way it sources sales of services, effective July 1, 2014.
To illustrate the change, the Wyoming Department of Revenue provides several examples. Effective July 1, 2014:
- An oil change performed on a car by a mechanic located in Gillette (Campbell County) is taxed at the Campbell County sales tax rate in effect at the time the service is performed.
- A customer living in Torrington (Goshen County) ships a vacuum to a repair shop in Cheyenne (Laramie County) for repair services. The business repairs it and ships it back to Torrington. The “proper sales tax rate to be charged… is the sales tax rate in effect in Goshen County, as that is where the customer makes first use of the repair service.”
- A customer located outside of Wyoming ships a pump to a vendor in Wyoming for repairs. After the repair, the Wyoming vendor ships the pump back to the customer. No Wyoming sales tax is charged, because “the customer makes first use of the repair service in the other state, which is outside of [Wyoming] taxing jurisdictions.”
The new sourcing policy takes effect in July of this year in order to give Wyoming vendors adequate time to prepare for this significant change.
The Department of Revenue underscores that “this change in no way affects the sourcing of retail sales of tangible personal property or the lease or rental of tangible personal property.”
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