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Wyoming taxes the extraction of minerals at the point they leave the ground, and the resulting revenue — together with federal mineral royalties on land the state does not own — funds a large share of state and local government.

The arrangement means Wyoming residents fund public services indirectly through resources sold outside the state, which is why Wyoming consistently ranks as having the lowest overall state and local tax burden in the United States.

It also makes the state budget unusually volatile. Coal production has declined substantially over the past decade, and Wyoming has drawn on its Permanent Wyoming Mineral Trust Fund and other reserves during downturns. Long-term questions about how the state funds itself as coal declines are a live political issue, though no income tax proposal has advanced.

Wyoming's state sales tax is 4%, with counties permitted to add up to 2% more, producing combined rates of 5% to 6% — among the lowest in the country.

Property taxes are similarly low by effective rate, helped by the fact that mineral property carries a large share of the assessed value base in many counties. Residential property is assessed at a low ratio of market value, and the state has added relief programmes for long-term homeowners.

Wyoming also has no inheritance or estate tax, and like South Dakota it has adopted permissive trust legislation, drawing some asset-holding business to the state. It is a common destination for LLC formation for the same reason.

Wyoming's energy and mining workforce includes a large number of people on rotational schedules who maintain residence in another state, and the tax position for them is less favourable than Wyoming's headline suggests.

Wyoming collects nothing from them, but their home state taxes them as residents on worldwide income — and because there is no Wyoming tax to credit against, the home state collects the full amount. Working in a no-tax state provides no benefit unless you are resident there.

Per diem allowances are the other complication. Genuine per diem paid under an accountable plan for travel away from your tax home is not taxable wages and does not appear as income. Amounts paid above federal rates, or paid without the substantiation an accountable plan requires, become taxable wages subject to both income tax and FICA — a distinction worth checking on your own payslip, since employers handle it inconsistently.

Beyond that, only federal deductions apply: income tax, Social Security and Medicare.