A proposal to repeal Wyoming’s sales tax on electricity has narrowly advanced through a legislative committee, promising significant savings for ratepayers but raising concerns about the financial impact on local governments, Wyo File reports.
Senate File 128, “Repeal of sales tax on electricity,” could deliver an estimated $43.4 million in annual savings, according to a fiscal analysis. However, critics warn that the measure could have unintended consequences for towns and counties that depend on sales tax revenue to fund public services.
Proponents of the bill argue that it will ease financial burdens on electricity consumers, especially as rates continue to rise. The measure’s supporters include Sen. Troy McKeown (R-Gillette) and Sen. Cale Case (R-Lander), who see the repeal as a way to reduce costs for residents and businesses. Industrial consumers, such as mines, oil producers, and data centers, are some of Wyoming’s largest electricity users and stand to benefit significantly from the tax cut.
“We have a far larger industrial load in Wyoming than you do residential — that’s not true for most states,” Jody Levin of the Wyoming Mining Association said.
Levin emphasized that industrial users bear the brunt of rising electricity costs.
However, local officials and organizations have voiced serious concerns about the potential revenue shortfall the repeal would create. Many Wyoming towns and counties rely heavily on sales tax revenues from electricity to fund public services, including those required by industrial operations.
Evansville Police Chief Mike Thompson described his community as being primarily industrial, relying on sales tax revenue to support essential services.
“It’s going to cripple our community,” Thompson said. Similarly, Cheyenne Mayor Patrick Collins warned that the repeal could cost Cheyenne approximately $4.4 million annually, citing the city’s growing demand for electricity due to an influx of data centers and manufacturing facilities.
“These industries are our economic backbone, but they also rely on public services that are funded by these taxes,” Collins testified.
He compared Cheyenne’s data centers to Sublette County’s oil and gas fields or Campbell County’s coal mines.
Lawmakers backing the bill suggest that the financial losses could be mitigated by a separate measure to increase taxes on electricity exports to out-of-state customers. Wyoming, which exports more electricity than it consumes, could shift some of the tax burden to those outside its borders, potentially generating more revenue than the sales tax repeal would eliminate.
“We would export a very large amount of tax burden and collect more than the sales tax we’re giving up,” Sen. Case said.
However, the proposed measure to offset these losses had yet to materialize as of Friday, and its implementation remains uncertain.
