Virginia goes after Out-of-State License Plates | Page 2 | FerrariChat

Virginia goes after Out-of-State License Plates

Discussion in 'Mid-Atlantic Region - USA (PA, DE, MD, DC, VA)' started by toggie, Aug 3, 2016.

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  1. CornersWell

    CornersWell F1 Rookie

    Nov 24, 2004
    4,874
    The dealer plate thing is interesting, too, I suppose. The last I looked at it, if you buy or sell a minimum number of cars per year, you can get a dealer plate. How can anyone determine how long a car in inventory has carried the tag? It rotates. Even if it doesn't rotate, the car's in inventory.

    Again, this seems like a disproportionate amount of work with legal prosecutions based on speculative assumptions. Small potatoes. And, all it does is engender bad will.

    That said, I certainly accept that there are plenty of folks out to "game" the system. And, in the tax code, "gaming" is frowned upon. To the point that sham transactions, even if legally executed, are given no weight. But, don't create an incentive to game the system, then, because you cannot prevent people from gaming it when there is. How about we get on the same page on property taxes in this country: sales tax (at the time of purchase) and consumption tax based on usage (gas tax at the pump)? Oops...we already have those. Seems that's not enough, though. I guess it really is just another money grab that we should bend over for. Oh, silly me...

    CW
     
  2. GuyIncognito

    GuyIncognito Nine Time F1 World Champ
    Silver Subscribed

    Jun 30, 2007
    91,702
    agreed. it's become California with a southern accent.

    Montana plates are so obvious, it's begging to be busted. people should be a bit more subtle...
     
  3. dm_n_stuff

    dm_n_stuff Four Time F1 World Champ
    Lifetime Rossa Owner

    Not if it's a dummy company who's only purpose is to own cars for personal use. Then it's not doing any commerce at all, it's simply a tax dodge.

    And that, CW, is NOT legal.

    As to multiple state driver's licenses. If you have multiple residences, why not? Many states have a law prohibiting multi state driver's licenses. FL, for instance, has a requirement to transfer to an in state license within 30 days. They do not have a similar requirement for car registrations. PA has a similar law, except they couch it in testing requirements and include registering your car. If you wait more than 30 days, you have to pass the exam, less than 30 days you get a free pass on the test, and are assumed to be a good driver.

    D
     
  4. Entropy

    Entropy Formula 3
    Owner

    Jul 10, 2008
    2,149
    A few more thoughts....

    There were over the past 4-5 years a series of threads here on the "Montana LLC" and "Can I be a dealer" route. My personal take on most of these were they were purely maneuvers to avoid paying property tax, sales tax, registration fees, et al.

    FOR THE RECORD - I am absolutely in agreement that these "laws" are at this point punitive and egregious, and I'd rather have our police and DMV enforcing REAL traffic safety issues instead of being a tax collection device. Having said that, our governments run amok with finding more money from us to go waste....especially state and local. (anyone paying attention to what's happening in California and Connecticut?).

    I'd also add that from my investigation into being a "dealer", I could absolutely GET a dealer license, but I would have to buy/sell a minimum number of vehicles and have the documentation and financials to show it. I think everyone here is also likely aware that the IRS has started to really clamp down on "hobby businesses" - eg. running a car "collection" business where you are going "hold" product for a period of time (ahem), but taking big tax deductions off losses.

    You can absolutely have an LLC, just be prepared for unreal amounts of scrutiny, and penalties if/when they find something. I'd also add that this varies a lot state-by-state, but seems like more states are increasing enforcement and cooperating (eg. NY-CT-RI-MA-NJ-PA, especially on cross-border commuters and residents).

    Example - a friend formed an LLC and did the MT registration route. Over 3 years, he probably saved $35-40K in property taxes on his cars, which were garaged in between 2 states (not MT). He would routinely cross a toll bridge. Last year he got a letter from his town, let's just say he ended paying a LOT more than $40K to resolve the tax issue.

    Last, to further our annoyance at this, in most states the elected legislature does not "pass law" on these matters, it's administrative law set up by career bureaucrats in response to pressure from politicians.
     
  5. CornersWell

    CornersWell F1 Rookie

    Nov 24, 2004
    4,874
    What you say is NOT legal, actually is legal. There's no prohibition I know of to setting up an LLC in MT (or elsewhere), contributing a motor vehicle to it and then registering it there. What you say is a dummy company remains a legal entity, as far as the law is concerned. If and when the Federal authorities determine it's a tax dodge, then, maybe, there's something to discuss. Otherwise, it's perfectly legal. This is mere gun-jumping. To the authorities, I'd advise, "Either do it right, or don't do it at all." They half-ass everything.

    As I wrote, I am advised by a VA traffic attorney that is not illegal to have multiple licenses. Good luck telling that to the DMV, though, and his advice may be dated, too. However, I live where I live, and I am not going to be extorted anytime I want to spend more than 30 days at one of my other homes.

    CW
     
  6. CornersWell

    CornersWell F1 Rookie

    Nov 24, 2004
    4,874
    Which, IMO, is just putting the finger on the balance in their favor. They do it every time. There needs to be legislation or it's invalid.

    CW
     
  7. Bisonte

    Bisonte F1 Veteran
    Rossa Subscribed

    Mar 27, 2007
    7,933
    Northern Virginia
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    Greg
    They've been doing it in D.C. for more than a decade, too. I worked with a guy who moved from Arlington, VA to the District, and his car insurance was going to skyrocket when he changed his registration. He was looking something like $2K a year for a late model Civic, even with a clean driving record.

    So he kept his VA plates for a few months until the police caught on to him and he started getting daily tickets. I guess it's pretty obvious that someone's living somewhere after enough time goes by.
     
  8. g4titan

    g4titan Formula 3
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    Feb 6, 2010
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    Nico
  9. energy88

    energy88 Two Time F1 World Champ
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    Jan 21, 2012
    26,819
    West of Fredericksburg, VA
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    John
    Everybody got their photo in the article except the Mayor. What a hoot!
     
  10. nathandarby67

    nathandarby67 F1 Veteran
    Owner

    Feb 1, 2005
    8,349
    Mississippi
    Full Name:
    Nathan
    Don't you go back to check on your other house every 29th day? Of course you do.
     
  11. CornersWell

    CornersWell F1 Rookie

    Nov 24, 2004
    4,874
    Oh, of course I do.

    I don't want to run afoul of any of those important laws...

    CW
     
  12. srephwed

    srephwed F1 Veteran
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    Apr 29, 2012
    6,450
    street,md
    Full Name:
    fred brown
    First tell me what is is?
     
  13. dm_n_stuff

    dm_n_stuff Four Time F1 World Champ
    Lifetime Rossa Owner

    So, CW, you're telling me you can incorporate with the sole purpose being to avoid paying a legal tax in your state of residence. That company has no other purpose, just a tax dodge?

    It's a sham, not a business enterprise. Plenty of IRS rulings on it I suspect.

    As to multiple driver's licenses, all I know is you can't be a primary resident of more than one state, and most require proof of residence to get a license, although I suspect this is an honesty issue if you have multiple homes and licenses to some extent.

    When I got my FL DL, they cut the corner off my PA DL. I objected, but the clerk said no clip no new license, and I was not in a position to really argue.

    D
     
  14. Piper

    Piper Two Time F1 World Champ
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    Jun 6, 2010
    24,851
    Northern Virginia
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    Bob
    Difference between tax shelter and tax avoidance. VA will intentionally or otherwise be hassling legally tagged drivers as well. My understanding is that in VA all hinges on whether it can be proven the car is garaged here 180+ days in a year, not whether this is your primary residence, but this is years old info and could have changed, or be wrong entirely. I did look into it at one time though for a friend. I would never take the risk for other reasons. But if you have a legal residence or LLC with agent of record elsewhere and that car isn't in VA for more than 180 days (where it is the rest of the year is immaterial I think), then it's not tax evasion, it's a tax shelter and perfectly legal. I think :rolleyes:
     
  15. CornersWell

    CornersWell F1 Rookie

    Nov 24, 2004
    4,874
    The presumption is one of innocence. Not guilt. Sham transactions can indeed be unwound and treated as invalid. That said, prove it's a sham. Prove there is no valid reason to have an out-of-state registered vehicle. Further, as I pointed out, assuming the validly registered SOMEWHERE, this is nothing more than a tax grab. What does anyone care if my car is registered in the state I'm domiciled? Oh, that's right. Taxes.

    Numerous residences gives me the option of deciding where and how to register my vehicles.

    FL is a strange state. It's kind of a hold out. However, imagine you were trying to get a license in, say, IL (randomly picked and perhaps this doesn't hold true in IL, either...don't know...I am not going to discuss my home state's practices). Let's say you turned over your PA license to get the IL one. IL demands that you also forfeit your FL license. Now, let's say you go to VA for more than 30 days. They'll tell you you have to get a VA license. To get that, you have to forfeit your IL license. Then, when your thirty days is over, you travel back to IL for 30 days. You have to get a IL license and forfeit your VA license. And around and around we go. Each and every time, visit the DMV and spend I-don't-know-how-much-$ on new license registrations. Why? So, someone can be on a power trip? l

    CW
     
  16. energy88

    energy88 Two Time F1 World Champ
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    Jan 21, 2012
    26,819
    West of Fredericksburg, VA
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    John
    Agree. It probably comes down to the definition of "resident." This can be difficult to prove for people with homes in multiple states as they likely don't always have the documentation to back up their claim to being a "resident." Can you imagine standing at the window of a DMV dealing with some bureaucrat and not having a pay stub to prove you have a job in the state, no contract to show that you are a renter in the state, no kids being enrolled in local schools, and no utility bills to show since they are all mailed to an address in another state? About the only thing one could show as proof might be a deed, and that usually indicates a primary residence elsewhere and typically doesn't allow a local homestead tax exemption if one's primary residence is in another state. Thus, the 30 day rule (and possibly the 180 day parking rule) is likely in conflict with the local real estate laws. Just a wild thought and wonder if anyone has ever contested this issue before.
     
  17. CornersWell

    CornersWell F1 Rookie

    Nov 24, 2004
    4,874
    And, what does it matter where it's registered, as long as it's correctly registered somewhere? The whole point is for VA to get tax revenues. That's all. Nothing more.

    But, regardless, there remains a burden of proof, that the State must meet. Can they? Do they? Let's assume they can "bookend" the 180 day figure. Can they account for where the vehicle has been for every moment in those 180 days? Can they ensure that that vehicle hasn't left and returned? Let's say you live in NoVA and commute to MD or DC once a week. Doesn't that re-start the clock? This is just a fool's errand. Thought up by a bunch of tax-hungry legislators without giving any thought to the practical enforcement.

    And, others who have vehicles registered elsewhere will be needlessly hassled. That IS a violation of the ICC, as already noted, I believe. This is a free country, where people can drive across state lines without having to re-register a vehicle last time I checked. What difference does it make if a car is registered in another jurisdiction? Oh, that's right...taxes.

    CW
     
  18. CornersWell

    CornersWell F1 Rookie

    Nov 24, 2004
    4,874
    Most people will just comply, because a state intimidates them with prosecution. It should, however, be challenged. This is just another illegal over-reach, IMO.

    CW
     
  19. toggie

    toggie F1 World Champ
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    Nov 30, 2003
    19,036
    Virginia
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    Toggie (Ron)
    Given how cheap and easy GPS tracking devices are, it won't be long before the government will force us to install GPS transponders in all our cars. Or force the manufacturers to embed them in all new cars.

    This will allow them to track where a car is each and every day.

    It will be a dream-come-true for the money-hungry tax bureaucrats.
    .
     
  20. Cobraownr

    Cobraownr Formula Junior
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    Feb 6, 2008
    929
    Edgewater, MD
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    Donald Silawsky
    This may be coming sooner than anyone thinks. There has been chatter about replacing or augmenting the Federal and state taxes on gasoline because they (allegedly) are not generating the revenue needed to keep up with infrastructure needs. With increasing fuel efficiencies in new vehicles and greater acceptance of hybrid and electric vehicles, drivers need less gasoline (and hence generate less fuel tax revenue) to travel more miles (which degrade road and bridges). An alternative that has gotten attention is a "road use tax" that is based on miles actually driven, not on fuel used. How will driven miles be measured? GPS tracking and downloading by the government is an easy solution from a technical standpoint. Whether that can be implemented without running afoul of constitutional issues is another question. This will be a VERY interesting debate in the coming years.
     
  21. randkin

    randkin Formula 3
    BANNED

    Aug 2, 2015
    1,497
    Somis, CA
    Full Name:
    Randy
    One of my friends/client is a CO domicile resident for 51% of his time (this includes his vacation travel time as well). He also votes in CO & has voter registration to prove it. He spends the remaining time in CA, used to be a CA domicile resident until he changed states to avoid CA state income tax. He told me he has been audited for CA taxes a couple of times and was able to sustain the CO domicile status. He used to have a large firm in CA before he sold and now has extensive real estate holdings in CA, so I have to think CA really tried for their taxes which they are not getting.

    I didn't ask him about DL issues or registration of vehicles but I believe he has cars registered in both states so likely each state is OK on those issues as I believe the cars stay where they are registered and he flys back and forth.

    So it can be done. But I am not sure what the cost for the tax audits were but with 11%+ CA state tax for him it was well worth the cost and inconvenience. He has very good tax and legal advise. Pretty well dialed in business and financial affaires so I guess it is really dependent how much it is worth to the individual.
     
  22. Gh21631

    Gh21631 F1 Veteran
    Silver Subscribed

    Feb 24, 2011
    8,325
    East
    Virginia might be the worst state in the country for car people. You have sales tax and on top of that property tax. You get no credit for the sales tax paid on your trade in, the meter starts over. They use NADA values which can be higher than actual values. On top of this the traffic laws or ridiculous. I cannot accept that I have to pay more property tax for having nicer cars than my neighbor especially if I have already paid the sales tax which is predicated on value. Certain counties are worse than others, northern VA gets screwed royally. As long as they steal from you people will try to skirt the system, yes steal. A few years ago they told me that my escalade increased in value and raised my property tax.

    The choices are pay, find loophole or just drive a lesser car...
     
  23. toggie

    toggie F1 World Champ
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    Nov 30, 2003
    19,036
    Virginia
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    Toggie (Ron)
    You're being too kind ...

    You could have also thrown in:
    - being strict on front license plates
    - illegal radar detectors
    - tinted windows
    - automatic reckless driving charge for anything over 80 mph or 20 mph over the speed limit
    - speed traps in both the small towns (25 mph zones) and on the highways
    - big stickers on the windshield for safety inspections and proof of county tax payments
    - etc.

    .
     
  24. killer58

    killer58 Formula 3

    Jun 30, 2010
    1,189
    CA & DC
    Generally, service members may claim residency in any state they're stationed in. Even if we subsequently move to another state, we can retain that residency as long as we remain on active duty. Many USMC/Navy pilots claim Florida residency while in flight school. Since FL has no state income tax, some retain that residency their whole careers.

    Once you leave the service, you are subject to the laws of the state you live in. In DC and VA, you have 30 days to switch your residency upon leaving active duty. The same goes for our auto registration.

    Can't really understand all the fuss, VA registration on my Spider is $125 for two years....
     
  25. ProRallyCodriver

    ProRallyCodriver Formula 3

    Oct 25, 2005
    1,250
    Alexandria, VA
    Full Name:
    Dave Shindle
    Been ticketed in VA for my exhaust legal in the state car is registered. What am I supposed to do, remove my exhaust system each time I enter VA? Its not a 'illegal' radar detector I can simply put in the glovebox.

    Virginia is for Lawmakers.

    And not good one at that. Statute I was written up for was poorly written saying if exhaust emits more sound than factory its illegal.

    First off, exhaust do not create noise. I can run factory exhaust with cams and tune and make more sound and be charged w/ illegal exhaust. And no reference to what factory decibels are and how to measure them. Its just an officer saying the car is loud or exhaust too shiny. Revenue grab.
     

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