Wyoming senator wants to make sure carbon capture projects aren’t property tax exempt

CHEYENNE – Wyoming is expected to quickly become the leading state in the nation for carbon capture sequestration projects, and private companies are eyeing the Cowboy State for its “immense opportunity” to deploy carbon capture technology and enhanced oil recovery.

Carbon capture projects such as Project Bison in Sweetwater County, and Tallgrass Energy, L.P., and Meriden Carbon in Laramie County, are still in the early stages of planning. However, Sen. Cale Case, R-Lander, is worried about how these large carbon capture stations might be exempted from paying property taxes.

“These gigantic new plants … will have immense impact on local governments, roads, schools, housing,” Case said. “Yet they could potentially not have to pay any property taxes.”

Current Wyoming law creates a property tax exemption for any property that is “used to eliminate, control or prevent air, water or land pollution.”

To stay ahead of the curve, Case is sponsoring a bill for the upcoming legislative session that would amend this property tax exemption to exclude carbon dioxide.

Senate File 61, “Pollution control property tax exemption-applicability,” specifically states that “carbon dioxide shall not be considered air, water or land pollution” for purposes of a property tax exemption under environmental quality control.

“It’s not a statement about carbon dioxide. It’s really not,” Case said. “It’s just that we have this one exemption for pollution control equipment, and it’s in the environmental statute.”

There is an appraisal process that takes place before an industry can qualify for the property tax exemption, and county assessors aren’t sure yet on how these projects might qualify. When industrial companies ask for fire and pollution tax exemptions, they first must submit an application, said Laramie County Assessor Todd Ernst.

“I just have to kind of wait and see if these companies are going to be locally assessed or state assessed,” Ernst said. “The (Wyoming Department of Revenue) and the local assessors are going to have to work together to figure out what’s going on and then wait and see what legislation does and what they exempt from taxation.”

In Sweetwater County, Project Bison is still in the planning process and isn’t quite off the ground yet, said County Assessor Dave Divis. Once it’s ready, the county will hire an industrial appraisal firm to appraise the property’s value, before considering fire and pollution tax exemptions.

“For us, pollution and fire are a big deal,” Divis said. “Underground mining is a bigger deal, because of the trona mines that are here. So, all the equipment that’s underground is basically exempt.”

Review process

Property tax exemptions under environmental quality control can be applied to “facilities, installations, machinery or equipment” that is designed for pollution control. Divis said the installation of paved roads, instead of gravel roads, which can release dust particles into the air, technically qualifies under this exemption.

“It’s not a straight-line adjustment. It’s not something where ‘This facility gets this much off,’” Divis said. “It’s really, truly based on the assets.”

Assessment for a property tax exemption under pollution control happens either at the state level, through the Department of Revenue, or the local level, through the county assessor’s office. Revenue Department Director Brenda Henson said oil refineries are typically assessed at the county level, and many county assessors will hire outside experts to provide guidance on what qualifies as pollution control.

“Pollution control” is still broad terminology and can be subjective by definition. When it comes to carbon capture sequestration, there is widespread criticism that this technology isn’t the best solution to reducing the Earth’s carbon footprint.

The Institute for Energy Economics and Financial Analysis studied two carbon capture and storage (CCS) projects in Norway, Sleipner and Snøhvit, and, in a 2023 report, questioned the viability of this technology. The IEEFA found that CCS projects require constant oversight and pose “material ongoing risks that may ultimately negate some or all the benefits it seeks to create.”

Henson also noted that some pollution control equipment isn’t 100% exempted if the company profits off the pollutant.

“If I am using pollution control equipment and I’m able to capture sulfur, and then I can sell that sulfur, then I have to consider the amount of money that that company got off of that pollutant and reduce the amount of the exemption,” Henson said.

It’s unclear whether carbon capture projects will qualify for a pollution control property tax exemption, but Case hopes to stay ahead of the curve with this bill.

“It’s not a statement about whether CO2 is pollution or not,” Case said. “It’s just that these (carbon sequestration projects) are going to have big impacts locally, and we need to have a property tax revenue stream to match it.”

The 2025 legislative session begins Jan. 14.

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