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email:WSBDC@uwyo.edu

Small Business Regulations & Tax Issues

 

dictionary_tax.jpgWyoming ranks #1 for the best state tax climate according to The Tax Foundation who ranks the tax climates of states on 113 different variables.  Those variables are placed into five major categories including corporate tax, individual income tax, sales tax, unemployment tax, and property tax.  Wyoming businesses, however, are not solely subject to state taxes, but are also responsible to follow federal, state, and local regulations, file and report income to federal and state taxing authorities and report other financial and non-financial information to agencies at all levels of government.

 

The following is provided to assist you with those regulations and taxing authorities that enforce their compliance.  If your company will have offices in or does business with other countries, you should comply with that country’s laws and regulations, however, that is beyond this short presentation and we cannot hope to list or explain all the laws and regulations that may affect your business for each country, state or local community that may have their own unique laws.

 

Here are some of those that are most common:

 

Federal Laws and Regulations

 

1.  Federal Income Taxes of course is the most common among both entrepreneurs and the companies that they might run.  Taxes are imposed on the income that is generated by the business or its owners depending on the type of entity the business is.

 

 Corporations known as “C” corporations pay tax on the net income that they generate while “S” corporations generally do not pay a tax on the earnings of the company, but passes the income and its liability on to the shareholders of the company.  Partnerships, Limited Liability Companies and sole-proprietors pay the income tax from the business operations at the individual level.  General information regarding federal income taxes is available at the IRS.

 

2.  Federal Employment Taxes are taxes imposed on both employees and employers.  Social Security, Medicare and Federal Unemployment taxes are imposed on the earnings of the employees of a business and are collected by the employer and paid to the US Treasury through the Internal Revenue Service.  Information on employment taxes and their collection procedures are also available at the IRS.   As an employer businesses need to register their business with the Internal Revenue Service by filing form SS-4.  Employers are also required to verify the employability of their workforce by getting proof from the employee with form I-9, which can be obtained HERE.

 

3.  Other Federal Taxes and Regulations are too numerous to cover in their entirety.  There are excise taxes on manufactured items including – sporting goods, firearms, alcohol, tobacco, fuel, tires and more.  The federal government regulates civil rights issues, worker safety, consumer protection, labor standards and environmental protection just to name a few.  Almost everything that a business does is regulated to some extent by the laws of the land.  You, as an entrepreneur should educate yourself about the regulations that affect your particular business.  Most industries have associations that represent them and they should have information about the laws affecting their industry.   Estate and Gift taxes might be imposed on business transfers and our inheritance.

 

State Laws and Regulations

 

1.  State Income Taxes – The state of Wyoming does not levy a personal or corporate income tax.  Wyoming does not impose a tax on intangible assets such as bank accounts, stocks, or bonds, either.  In addition, Wyoming does not assess any tax on retirement income earned and received from another state. Further, there is no legislative plan to implement any of these types of taxes according to the Department of Revenue and Taxation found HERE.

 

2.  State Employment Taxes are taxes imposed on the employers of the states for unemployment insurance, workers safety and compensation.  Information about these taxes and their filing requirements can be found at the Wyoming Department of Employment’s website HERE.  Employers are required to report newly hired employees HERE.

 

3.  Other State Taxes and Regulations, again are too numerous to list, yet most of the information regarding taxes are found at the Wyoming Department of Revenue.  The Department of Revenue handles most of the taxes of the state including excise taxes (sales, use, lodging and cigarette tax), mineral production and severance taxes property taxes and estate taxes.  The Liquor Division serves a dual purpose of being the exclusive wholesaler of alcoholic beverages in the state and also the exclusive authority to license malt beverage wholesalers and industry representatives.  They also certify local licensing authorities.

 

Other state agencies have regulations and fees related to the operations of various types of businesses and industries.  A valuable resource to the state is the Wyoming Business Council’s Business Permit Program Manager, Paul Howard.  Business permitting and agency regulations at the state level can be overwhelming and sometimes confusing.  A call to (307) 777-2843 will get you help understanding the processes and where to go. 

 

Visit the Wyoming Business Council Business Permitting page HERE

Email a question to Paul Howard.

 

Local Government

Local government may regulate or permit certain types of businesses in a community.  Licensing information is usually available at the city or county clerks’ offices.  Businesses that are regulated at the local level usually include building contractors, daycares, restaurants (health inspection), and businesses are subject to local zoning rules and regulations as well.

 

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