Property tax refund law changes

Last week I wrote of the proposed constitutional amendment to create a class of taxable property for owner occupied primary residences. It will be on the next general election ballot in 2024. If approved, it would allow the legislature in the following year – 2025 — to enact a permanent reduction in taxes for all homeowners. That program would likely take effect in the following year, 2026. So, this relief is a bit off into the future.

This week, I would like to examine a different aspect of residential property tax relief: the existing and newly expanded law that allows a partial refund for some homeowners based on a test of their income and assets.

This law has been on the books for decades. There is a catch, however: It must be funded by an appropriation in each state budget. When times are tough, the funding is often reduced, or even eliminated. Because of that, and the fact it benefits only a minority of taxpayers, I have never regarded it as a permanent solution for all homeowners.

Still, the program is of benefit, and it was modified in the last session to help more folks than in the past. As under current law, each applicant for a property tax refund must pass both an income test and an asset test.

Under current law, an applicant’s income must not exceed 75% of average income. The new law raises that to 125% of the area or state median income, whichever is higher, a substantial increase. Based on the most current information available to me, I believe that would be an income limit of $86,400 for Johnson and Sheridan counties.

Once an applicant satisfies the income test, they must also meet the maximum asset test. The new law increases that from $133,000 to $150,000. As under existing law, certain assets are excluded from the calculation. Among the exclusions: the value of the home, one personal vehicle, household furnishings and personal property, retirement accounts, cash value of life insurance policies, and medical savings account.

These exclusions apply to each “adult member of the household.”

The refund is available only to those who have been a Wyoming resident for at least the last five years. The property must be owner occupied for at least nine months of the year and must be the principal residence of the applicant.

There are other provisions in the law, so it will be important to review your situation with the county assessor’s office once the law goes into effect. Also, there is a deadline for application. I’d urge you, if you think you may qualify, to contact the assessor’s office soon for information on how to apply.

Finally, it is important to again emphasize that this program must be funded in each budget by the legislature. If the legislature does not fund the program to give all qualifying taxpayers the full refund they are due, then all refunds are proportionately reduced to the funds available.

Looking to the future, if the constitutional amendment passes the legislature will, hopefully, adopt residential property tax relief for all taxpayers for owner-occupied primary residences. It is unknown if the current means tested refund program would be continued as well, or if that program would be phased out in favor of the broader program.

Dave Kinskey represents Johnson County and eastern Sheridan County in the Wyoming Senate. A businessperson and former mayor of Sheridan, he can be reached at his legislative email at Dave.Kinskey@WyoLeg.gov.