SALT Report 1612 – The most recent issue of the Wyoming Department of Revenue’s publication, Taxing Issues, discusses the sourcing rules of retail sales, leases and rentals. Wyoming law dictates that when a vendor makes a taxable sale the vendor must determine the proper rate of tax to charge. Wyoming’s sourcing rules are determined by key elements that take place during the transaction as itemized below.
Sourcing of Retail Sales
The following sourcing rules apply to retail sales:
- When a product is received by the purchaser at the seller’s business location the sale should be sourced to that business location.
- When the product is not received by the purchaser at the seller’s business location, the sale should be sourced to the location where the purchaser, or purchaser’s agent, takes receipt of the property, or the location indicated for delivery to the purchaser.
- If the first two rules do not apply, the seller should charge sales tax based on the address the seller has in its records for the customer.
- If none of the above rules applies, the seller should charge sales tax based on the customer’s address obtained during the sales transaction, such as the address shown on the customer’s check.
- When a Wyoming vendor ships items outside the state, Wyoming tax is not due because the customer receives the goods outside Wyoming’s taxing jurisdiction.
- All taxable services are sourced to where the vendor performs the service.
Sourcing of Leases or Rentals
When tangible personal property is leased or rented and involves recurring payments, the first payment should be sourced in the same manner as a retail sale. Any subsequent payments due after the initial payment are sourced to the customer’s primary location.
For example, if a customer leases a computer from a store and takes the computer home, the first lease and tax payment is sourced to the store where the customer receives the computer. The subsequent lease and tax payments are sourced to the customer’s home. However, if the property’s primary location changes during the lease period, the sourcing of the tax should reflect the new location.
For a lease or rental that does not require recurring payments, the lease and tax payment is sourced to the location where the customer takes receipt of the rented item.
Equipment lease transactions, which involve the transfer of equipment from the lessor to the lessee, are taxable. The lessee must pay tax to the lessor on each payment as required by the lease.
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