The Wyoming legislature's proposal to create a fourth residential tax tier is generating mixed reactions among state officials and representatives from the agriculture sector. The changes aim to add an additional property tax tier exclusive to residential properties, but there are still many unanswered questions and “what ifs”.

Brenda Henson, the Director of the Wyoming Department of Revenue noted that currently, Wyoming's property tax structure is divided into three tiers: mineral production, which is taxed at 100%, industrial property at 11.5%, and all other property, including commercial, agricultural, and residential, at 9.5%. 

The proposed amendment would create a new category specifically for residential property, and the legislature would need to define exactly what constitutes "residential real property. This could include everything from single-family homes to multi-family rental properties, and how these properties are assessed remains uncertain.

Jeremiah Reiman, the executive director of Wyoming County Commissioners, noted the effects on agricultural property tax rates could be significant, depending on how the amendment is implemented. 

“It’s not an unreasonable conclusion that ag rates could see increases as a result of this proposed initiative,” Reiman explained. “The separation of agricultural land from residential property could create pressure on agricultural and commercial properties if residential tax rates are reduced.”

Reiman noted that while the initial impact might be felt primarily by residential property owners, changes in one area of taxation could have a ripple effect. “There could be long-term pressure on ag and commercial properties, but we have no way of knowing how that shakes out unless the amendment is passed and the legislature acts on it” he said. 

"Commercial property tax rates in Wyoming are currently among the lowest in the country," he explained, "But, if the government needs more revenue, they could look to those sectors in the future."

Henson stressed that the full impact of the amendment will not be clear until the legislature meets in its next session. 

"The constitutional amendment simply creates a fourth residential tier with an additional provision that the legislature may create a subclass for owner-occupied residences," she said.

Henson outlined a potential scenario for how this could play out: A piece of land with both agricultural and residential structures could end up being taxed at different rates depending on how the legislature classifies the buildings. 

“Property owners would need to identify residential structures that are owner-occupied to ensure the appropriate level of assessment is applied,” Henson explained. This adds a layer of complexity to the current system, which could raise concerns for farmers who manage both agricultural land and residential buildings on their properties.”

Another concern Henson raised is the possibility of increased assessments on non-residential properties. “Some have voiced concern that the legislature may consider increasing the level of assessment on the 'all other property' tier to make up for the lower tax base that would be the result of the reductions on residential property,” she said. 

However, she also acknowledged that it’s possible the new tier will have little impact if the legislature decides to keep the assessment rates the same.

Wyoming Farm Bureau Federation Director of Public and Government Affairs Brett Moline echoed concerns about the complexity the new system could introduce. Moline said, “I’m a big believer in the KISS principle—keep it simple, silly. We’ve got that right now, and I think changing the number of classes is just going to complicate our tax system." 

Moline, like Reiman, expressed concern about the financial implications for farmers and ranchers. "If the cost of government goes up, they’re going to need more tax revenue. It’ll be politically more difficult to raise taxes on residential property, so other classes like industrial, commercial, and agriculture will be at a higher risk."

Moline is particularly worried about the possibility that the legislature could decide to lower residential property tax rates while maintaining or even increasing the rates for agricultural land. "Given the government always needs more money, they could increase the rate on other properties like industrial, commercial, and agriculture. The potential shift in the tax burden from homeowners to other property owners is a significant concern for those in the agriculture industry.”

Dixie Huxtable is the Converse County Wyoming Assessor. Her main concern is rooted in the uncertainty of the amendment and potential complications for the process of assessing properties.

"Farmers and ranchers will be affected depending on how legislators move forward in the 2025 session. The proposed changes could complicate the assessment process for properties with both agricultural land and residential buildings, adding more administrative burden to county assessors.”

From an assessor’s standpoint, Huxtable pointed out that defining what qualifies as “residential real property” will be critical. She pointed out structures such as bunk houses and other dwellings on the ranch could be difficult to define.

"Just because voters pass it in November doesn’t mean anything changes immediately,” Huxtable said. “The legislature will still have to write bills and language to define what qualifies as residential.”

Laurie Urbigkit notes the Wyoming Realtors Association is a proponent of this amendment as it allows for legislatures to offer breaks for homeowners without giving breaks to other types of real estate that are currently lumped in with residential. 

"If this passes, farmers and ranchers who live in houses, which I would imagine they all do, would receive the same tax break as anyone else based on their residential properties," Urbigkit said. "It could change how homes are taxed, but agricultural land wouldn’t be affected directly."

She added, "Some of these farmers have nice homes. Anytime we can do something to save money, it’s a good day."

Urbigkit noted that defining what qualifies as residential has been difficult. "We've tried a lot of definitions, but it’s really up to the assessor to decide what counts as residential versus agricultural land. Right now, it's being handled by the county assessor, and it varies."

"We support this amendment because we believe in solutions that help people stay in their homes," she said. "We can’t give homeowners, like grandma, a break on their property taxes unless we offer the same to businesses. Big box stores are already paying very few taxes. Separating residential allows for us to make meaningful progress in keeping people in their homes."

            For those involved in the mineral industry, the potential for a shrinking tax base and an increased burden on the mineral sector is a top concern. 

Travis Deti of the Wyoming Mining Association noted, "Our concern is that it will lead to a further shrinking of the tax base and shift even more of the state’s tax burden to the minerals industry, of which we are already over-reliant. 

            As voters gear up for this potential amendment, Wyoming Farm Bureau Federation President Todd Fornstrom stresses how important it is for voters to educate themselves prior to casting any votes. 

            “As a taxpayer, I believe it is important that we be aware that some groups will pay more in taxes to make up for any decrease in taxes for a specific class. That increase will have to come to make up for the lost revenue unless a decrease in spending is implemented,” Fornstrom explained. “If more classes of properties are established, shifting the tax burden from category to category will become easier for future legislative bodies.”

Editor’s Note:  Wyoming Farm Bureau Federation policy supports the three existing tiers written into the Wyoming Constitution.