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Materials that were used by a Wyoming refinery to construct foundations for manufacturing equipment did not qualify for a sales and use tax exemption on manufacturing machinery. It was determined that the foundation materials were real property, not tangible personal property. The taxpayer argued that the foundations fit the definition of “adjunct or attachment necessary for the basic unit to accomplish its intended function” and therefore are included within the definition of “machinery” for purposes of the exemption. The Department did not dispute the contention that the foundations could be considered adjuncts or attachments. They maintained that the foundations aren’t “machinery” because they don’t satisfy the initial phrase of the “machinery” definition which begins “all tangible personal property…” The foundation materials qualify as real property because they had been buried or embedded. At the time that the manufacturing equipment was bolted to the foundations, the foundations had already become real property. The manufacturing equipment itself qualifies as exempt manufacturing machinery. While it is acknowledged that the foundations are necessary for the exempt machinery to function safely and properly, the foundations still aren’t eligible for the exemption. The taxpayer went on to argue that if the foundations are real property, sales tax was not due when the materials were purchased. This argument was rejected. The materials were personal property when they were purchased and thus subject to sales tax. When the materials were buried and embedded, they were converted into real property at that time. (Sinclair Oil Corporation v. Wyoming Department of Revenue, Wyoming Supreme Court, No. S-09-0231, August 26, 2010)


Wyoming has enacted legislation providing for additional sales and use tax exemptions for data processing service centers. The exemption for computer equipment necessary to operate data processing service centers now also includes prewritten and other computer software and containers used to transport and house computer equipment. In order to qualify for the exemption, the aggregate purchase of qualifying equipment must exceed $2 million in any calendar year. Additionally, qualifying uninterruptable power supplies, back-up power generators, specialized heating and air conditioning equipment, and air quality control equipment used for controlling the computer environment necessary for the operation of a data processing services center are exempt as well. In order to qualify for the exemption, the aggregate purchase of qualifying equipment must exceed $2 million in any calendar year. To qualify for the new exemptions of equipment controlling computer environments, purchasers must demonstrate that they will make an initial total capital investment of at least $50 million in a physical location in Wyoming or have made a capital investment in a physical location in Wyoming in the five years immediately preceding April 1, 2011. For the purpose of claiming exemptions, if a data center has more than one entity occupying the facility but offers data services as a single entity, the purchaser must demonstrate that all of the requirements for claiming an exemption are met in aggregate by the entities occupying the facility regardless of multiple ownerships of equipment and buildings. (Ch. 48 (H.B. 117), Laws 2011, effective February 18, 2011)


The Wyoming sales and use tax exemption for the sale or lease of machinery used directly and predominantly in manufacturing tangible personal property has been extended from its original discontinuance date of December 31, 2010 to December 31, 2011 (Ch. 33 (H.B. 49), Laws 2010, effective March 4, 2010, and as noted).


The sourcing rules for ancillary services and prepaid wireless calling services are clarified in a policy statement issued by the Wyoming Department of Revenue. The sourcing rules for these two services were left out of the telecommunications sourcing rules adopted by the legislature in the 2006 Budget Session. Therefore, until these services can be added to the Wyoming Statutes by the legislature, it will be the intent and practice of the Department of Revenue to source these two services in accordance with the Streamlined Sales and Use Tax Agreement, as stated below.

The sale of “Ancillary Services” shall be sourced to the primary place of use by the customer. The statement also defines the phrase “Place of Primary Use.”

The sale of a “Prepaid calling service and prepaid wireless calling service shall be sourced in accordance with the Department's general sourcing rules. In the case of the sale of a prepaid wireless calling service, the sale may be sourced as an option to the location associated with the wireless phone number. (Policy Statement on Sourcing of Specific Telecommunications Services, Wyoming Department of Revenue, November 30, 2009)


The Wyoming Department of Revenue issued sales and use tax guidelines for the construction industry. Included in the publication is Wyoming’s definition of a contractor, which includes any person who owns or leases real property for the purpose of development and in doing so alters or makes improvements to the property or contracts for the alteration or improvement of the property.

The guidelines also clarified registration requirements for projects utilizing out-of-state contractors. Any construction project that has been awarded to a non-resident general contractor, subcontractor, or lower-tier subcontractor must be registered on ETS Form #121, Construction Project and General Contractor Registration Form. Additionally, all non-resident subcontractors and lower-tier subcontractors, as well as any resident general contractor who awards a contract to a non-resident lower-tier subcontractor, must be registered on ETS Form #120, Non-Resident Subcontractor Information Report.

Non-resident general contractors must post a surety bond or cash deposit equal to 4% of the total contract value to cover any potential sales or use tax liability which may arise over the course of the project. Similarly, each contractor or subcontractor is required to retain 4% of the payments due to the subcontractors below them until the department issues written authorization to release the retainage. (Sales Tax Guidelines for the Construction Industry, Wyoming Department of Revenue, August 22, 2008).



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