Of Old Faithful and Bears: How Wyoming’s National Parks Eliminate the Need for a State Income Tax

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National parks in the U.S. generate $31 billion from tourism and recreation alone—a fantastic return on a small yet environmentally beneficial investment. Here, we’ll look at Wyoming and how the taxes generated from the parks help draw revenue as an alternative to income tax.

Park Visitors Boost State Revenue and Jobs

Visitors to Wyoming’s national treasures not only help preserve them, they also boost the state’s economy and generate jobs. In fact, the national parks of Wyoming generate more than $720 million from tourists each year, according to a report from the National Park Service. Combined non-local visitor spending surpasses that figure. In 2012, spending reached $400 million at Yellowstone National Park and more than $450 million at Grand Teton National Park. The two parks also provide jobs for nearly 12,000 people.

Another advantage of Wyoming’s parks is that they benefit many businesses in the gateway regions, or those within 60 miles of the parks, such as in the town of Jackson, near Grand Teton, and in the city of Cody, near Yellowstone. These businesses include gas stations, grocery stores, retail stores, restaurants, bars, and those in the hospitality industry such as hotels, motels, and bed-and-breakfasts.

The Allure of Wyoming

States compete with each other in their attempts to attract businesses, residents, and visitors. When people have a good experience in a state by visiting a majestic national park, such as Yellowstone and Grand Teton, they might want to stay awhile, come back another time, move there permanently, and encourage others to visit.

In addition to attracting visitors to its beautiful parks, Wyoming encourages residents and businesses to move to the state and stay through its zero state income tax policy.

State Income Tax vs. Tourism Revenue

While Wyoming has no state income tax, it does have a state sales tax of 4 percent as well as local lodging and use taxes for generating revenue. These taxes, however, don’t seem to deter visitors. The number of people who visit Wyoming’s national parks keeps increasing every year. Yellowstone saw more than 3.5 million visitors in 2014, up from about 2.9 million in 2005, according to statistics released by the park. National Park Service statistics reveal that Grand Teton’s number of visitors rose from about 2.5 to 2.7 million between 2005 and 2012.

Generating money from national parks is a positive approach. But while the Department of the Interior, a government agency, oversees national parks, the state government decides if an income tax is right for a state. As an alternative, implementing a state income tax penalizes workers and places a financial burden on resident households.

The difference between these two governmental approaches is that people tend to flock to national parks and freely spend money that ends up benefiting the state. When people are forced to pay money to a state in the form of state income taxes, they often flee.