Wyoming Tax Board Heads to Court Over Residential Property Tax Cap

The original story by Maggie Mullen for WyoFile.

Wyoming’s State Board of Equalization is gearing up to take the state to court over a residential property tax limit lawmakers put in place two years ago, saying the law isn’t constitutional and needs to be struck down.

The board is expected to file its complaint on Jan. 22, Board Vice Chairman Marty Hardsocg told WyoFile, though he declined to go into detail about what exactly will be argued.

At the heart of the dispute is a 2024 law that was passed as part of a bundle of tax measures meant to ease rising bills for homeowners. Rather than lowering tax rates directly, the Legislature created a tax exemption that acts like a cap – limiting how much a residential property tax bill can increase in a year. As it stands, annual growth in taxable value on homes is capped at 4%, even if market values climb much more.

Lawmakers backed this approach as a way to help residents without violating constitutional limits on property tax cuts. But the board’s lawsuit is expected to argue just the opposite: that setting the cap this way crosses a constitutional line rather than respecting it.

Under the Wyoming Constitution, the Board of Equalization’s job is to “equalize the valuation on all property in several counties,” and to handle other duties the law prescribes. Challenging the tax cap could reshape how that responsibility is interpreted and carried out.

Normally, the board spends much of its time settling disputes between taxpayers and the Department of Revenue or hearing appeals from county equalization boards. But this lawsuit marks a rare move into broader policy territory. Its members are picked by the governor and confirmed by the state Senate, giving them a unique perch in tax law debates.

The tax cap has been controversial since it passed, with supporters saying it gives homeowners relief as property values – and tax bills – rise, and critics arguing it shifts costs or creates unequal outcomes across neighborhoods.

As the complaint gets filed this week, Wyoming taxpayers and local governments alike may be watching closely: a court ruling could upend one of the most talked-about tax policies from the last legislative session.