Understanding the 5th-Penny Sales and Use Tax

The Pinedale Town Council recently joined the towns of Big Piney and Marbleton in formally requesting that the Sublette County Commissioners consider placing a one-percent (1%) general-purpose sales and use tax – commonly called the “5th Penny” – on a future countywide ballot for voters to decide.

Under Wyoming law (W.S. 39-15-203), only the County Commissioners can authorize the question to appear on the ballot, and only county voters can approve or reject it. The Town’s action does not impose or raise any tax; it simply begins the legal process for public consideration.

If voters were eventually to approve the measure, the 1% tax would:

• Expire automatically after four years unless renewed by voters.

• Be available for any lawful local government purpose across Sublette County. For Pinedale, this could be applied toward deferred capital needs or other community priorities identified through future budget processes.

• Keep about 99% of the proceeds in-county, compared with roughly 31% of the first four pennies of the statewide sales tax that return to local governments.

• Apply only to taxable goods and services – not groceries, prescription drugs, motor fuel, delivered water, or the 57 items exempt under Wyoming statute.

According to Wyoming Department of Revenue data, a 1% sales-and-use tax generally equals about $150 to $200 per year for the average Sublette County resident, though the actual amount varies because a substantial share of taxable sales come from visitors and non-resident project spending.

Industrial and Infrastructure Context

This discussion extends beyond any single project. Wyoming’s Industrial Siting Act (W.S. 35-12-101 et seq.) ties state impact-assistance funding for large industrial developments to whether a county imposes at least a 1% local-option tax (W.S. 39-15-111(c) and 39-16-111(d)).

Without a 5th Penny in place, Sublette County and its municipalities could forfeit an estimated $7.5 million in state impact-assistance funds related to major projects such as Blue Spruce, in addition to roughly $3.5 million in direct local revenue that a 1% levy on project-related spending would otherwise generate.

Currently, about 69% of all sales-tax revenue flows to the State, with only 31% returning to local governments. The 5th Penny reverses that ratio – 1% to the State and 99% staying local – which would nearly double Pinedale’s receipts. For context, Pinedale’s local share of the first four pennies brings in about $1.2 million annually; with a 5th Penny, total receipts would approach $2.4 million per year.

Fiscal Perspective

Revenues from the 5th Penny would support community priorities identified through future budget processes. For example, general-purpose funds could help the Town meet matching-grant requirements for projects such as pathway extensions, sidewalk improvements, contracts for services, or annual chip-sealing programs. These types of capital needs are funded through the General Fund rather than utility rates, and additional revenue capacity helps maintain essential services without shifting costs to property taxpayers.