Wyoming Sales and Use Tax Guidelines for the Construction Industry (Updated 2025)

Introduction

The construction industry in Wyoming involves a range of taxable and non-taxable activities.
Understanding how Wyoming sales tax and use tax apply to labor, materials, and subcontractor work
is essential for staying compliant with Wyoming Department of Revenue regulations.
This 2025 update explains how the rules affect general contractors, subcontractors, and nonresident contractors working in the state.

1) Wyoming Sales and Use Tax Rates

• Statewide sales tax rate: 4% (Wyoming Statutes §39-15-103).
• Local option taxes: Counties may impose up to 2% additional local tax (§39-15-204).
• Destination-based sourcing: Sales tax is calculated based on the location of the project or delivery, not the contractor’s business address.

2) How Sales and Use Tax Applies to Construction Contractors

Under Wyoming law, contractors are considered the final consumers of all tangible personal property
used in construction or improvement of real property.

• Contractors must pay sales or use tax on all building materials, tools, and equipment used in projects.
• If materials are purchased tax-free for resale and later used, use tax must be reported under §39-16-104.
• Separate contracts: When materials and labor are itemized separately, only materials are taxable.
• Lump-sum contracts: Tax applies to the cost of materials used, even if not itemized on the invoice.

3) Nonresident Contractor Rules and Compliance

Nonresident contractors working in Wyoming must meet specific registration and bonding requirements under
Wyoming Statutes §39-16-303.

• Project registration: Must occur within 15 days of starting work.
• Bond or deposit: The DOR may require a surety bond or cash deposit equal to 4% of the total contract value.
• Withholding: Prime contractors must withhold 3% plus local tax from payments to nonresident subcontractors until DOR issues a clearance certificate.

These measures protect Wyoming’s tax revenue and ensure proper payment of use tax on materials brought into the state.

4) Taxability of Labor and Services

• Labor on real property (construction, improvement, or remodeling) is not taxable.
• Materials used in construction are taxable through sales or use tax.
• Services to tangible personal property (such as machinery repair) are taxable.
• Keep detailed documentation distinguishing non-taxable labor from taxable materials and services.

5) Construction Contractor Tax Compliance Checklist

1. Confirm your role: prime contractor, subcontractor, or nonresident contractor.
2. Register each nonresident project with the DOR within 15 days.
3. Pay sales or use tax on all materials incorporated into the job.
4. Separate labor and material charges on contracts and invoices.
5. Verify local tax rates for the project’s county or city.
6. Keep records of purchases, exemption certificates, and tax filings.
7. Withhold payments to nonresident subcontractors until DOR clearance is received.
8. Review every contract for consistency with Wyoming tax law.

6) Updates and Best Practices for 2025

• Labor on real property remains exempt from sales tax, but materials remain taxable.
• DOR audits are increasingly focused on use tax compliance for out-of-state purchases.
• Local tax rates may vary; always confirm rates before submitting bids.
• Adopt digital recordkeeping for receipts, materials, and tax payments to streamline audits.

Conclusion

In Wyoming, sales and use tax compliance for construction depends on understanding one principle:
contractors are the final consumers of materials used to improve real property.
Labor-only work is generally not taxable, but materials and equipment are.
Nonresident contractors have additional responsibilities, including registration, bonding, and payment withholding.
By staying compliant with Wyoming Department of Revenue rules, contractors can avoid penalties and maintain smooth project operations.

Official References

• Wyoming Department of Revenue – Sales and Use Tax Division
• Wyoming Statutes Title 39 – Taxation and Revenue
• Wyoming Statute §39-16-303 – Nonresident Contractors
• Wyoming Legislature – 2024–2025 Updates

This article is based exclusively on official Wyoming DOR and legislative sources, written for educational and compliance purposes.

Frequently Asked Questions (FAQ)

Is construction labor taxable in Wyoming?

No. Labor to improve or repair real property is not subject to Wyoming sales tax. Only materials and tangible items used in the project are taxable.

Do contractors need to pay use tax on materials purchased out of state?

Yes. If materials are purchased tax-free and used in Wyoming, contractors must report and pay Wyoming use tax.

What are the sales tax rates in Wyoming for construction projects?

The state rate is 4%, and local rates can add up to 2% depending on the county, resulting in a total rate of 4% to 6%.

When must nonresident contractors register with the DOR?

Within 15 days of beginning work on a Wyoming project, as required by §39-16-303.