House Bill to Help Curb Fraud & Abuse in Business Filings Passes First Reading
Legislators Stand Shoulder to Shoulder with Coalition of State Leaders that Say Bill ‘Supports the Way Wyoming Does Business’
Cheyenne, Wyo. – With the aim of helping to curb fraud and abuse by bad actors and foreign entities exploiting Wyoming’s business friendly environment, the House of Representatives passed legislation on first reading today to make modest adjustments to business filing fees. The legislation passed first reading after lawmakers sought input from a broad coalition of organizations, collectively representing thousands of Wyoming citizens and businesses.
“We have a responsibility to the taxpayers of Wyoming to cut down on blatant fraud and abuse,” said Representative Jerry Obermueller, the prime sponsor of the bill. “By having a filing fee more on par with other business-friendly states, the legislature is exercising its responsibility to help drain the swamp and cut down on the time and resources required by the Secretary of State’s office to root out these bad actors.”
House Bill 267, LLC and Corporation License Fees, adjusts the annual filing fees for Profit Corporations, Limited Liability Company’s (LLCs) and Limited Partnerships from $50 to $75. The fee has not been adjusted in nearly 20 years. During the House Appropriations Committee hearing on the bill, a representative of an Italian company testified that they set up their entity in Wyoming to take advantage of the state’s low filing fees and business-friendly tax structure.
Small business and government agree that this change is in line with inflationary pressure and other government agency fee increases and supports the integrity of Wyoming’s business environment.
A diverse coalition of Wyoming organizations issued a statement today regarding passage of House Bill 267. The group includes:
Wyoming Business Alliance
Wyoming State Chamber of Commerce
Wyoming Mining Association
Wyoming Retail Association
Wyoming County Commissioners Association
Wyoming Association of Municipalities
Wyoming Stock Growers
Wyoming Contractors Association
Petroleum Association of Wyoming
Wyoming Trucking Association
Wyoming Taxpayers Association
The coalition said:
“We appreciate the Wyoming Legislature reaching out to the business community and engaging with us on key issues as they work to balance Wyoming’s budget. We want real businesses to flourish in Wyoming. We support weeding out entities that use our state to advance improper or illegal financial schemes. As a tool to protect the integrity of the way Wyoming does business, we acknowledge the importance of this fee adjustment.”
Once dubbed the ‘Cayman Islands of the American prairie,’ Wyoming has faced challenges over the years in thwarting off foreign shell companies that don’t actually do business in the state. Rather, they abuse Wyoming’s business friendly environment to hide assets and other activities that do not benefit the state.
Last year more than 120,000 businesses filed in Wyoming, nearly 20,000 of which were from out of state. Several Wyoming shell corporations were mentioned in the leaked Panama Papers last year, which describe the dubious innerworking of a shadowy offshore law firm headquartered in Panama.
HB 267 was passed unanimously by the Joint Appropriations Committee earlier in the week.
Business filing fees include a robust basket of goods, including asset protection, limited liability, access to the legal system and all the protections of Title 17 of the Wyoming Statute. It is estimated that 20 percent of all District Court civil cases in Wyoming include a corporation or LLC. Approximately 75% of the Circuit Court’s civil cases include a corporation or LLC.
“As a small business owner, I understand the tremendous challenges we face as well as the opportunities we are afforded here in Wyoming,” continued Representative Obermueller. “During these tough economic times, small businesses want and need to be a part of the solution. This modest increase to only three business filing fees – a rate still significantly lower than most other states – is a small way we can do our part while also helping to combat abuse.”
Fees collected through business filings go into the general fund and are used to support a wide array of government services utilized by businesses and their employees – from roads and infrastructure to first responders and telecommunications.
“Wyoming is consistently ranked as one of the very best states in the country in which to do business,” said House Speaker Steve Harshman. “The people of Wyoming and their state legislature have worked diligently over the years to make it that way – be it through low taxes, a well-trained workforce or reasonable regulations. We’re proud to continue this legacy in the 64th state legislature.”