anyway to minimize sales tax when buying toys?

In case anyone cares that 7 in the number on that plate is for the county it is registered in. Most plates you will see on cars that are "out of state" cars or RVs have a 4 or 7. The 4 is Missoula county and the 7 is for Flathead County. Just happens to be that the attorney's that do this live in those 2 counties. There are 56 counties so the #s range from 1-56. The rest of the the #s are sequential. When they get to 9999 they start over with 1A and so on.
The first time I saw this was when I was at Pebble Beach in 1994 there were 2 cars in the show that had "7' license plates knew something was up because I would have known those 2 cars if they actually lived in the county I lived in. They both belonged to Greg Garrison who lived in CA at that time.

What is even better is if your vehicle is 11 years old or older you can do permanent plates and never have to do anything again. I have my 355 on Permanent plate status.

Anyway thought you license plate buffs might be interested.

 

Was going to add this photo in the above post but pressed "go" to fast. You can't see the tag on this pic. of the plate but I will be able to keep this plate for ever as long as I own this car and not have to renew or pay any more fees.
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If I were you I would immediatly remove the photo, Az has a "turn in your nieghbor" Brown Shirt program for out of state registration and you can read both your plates in the photo.

 

First off I don't live in AZ(which wouldn't make any difference) and 2nd there is nothing illegal about it. I own property in Montana and the car is registered in a Montana LLC that happens to be visiting in the state I live.
Your "turn in your neighbor law" is geared(as it is in most states) towards people that have moved to a new state and their car is in their name not owned by a company but, they haven't changed over their title yet to their new home state,(usually just to wait for their current registration to expire) but nice guys like you turn them in.
Think of it this way if you worked for a company based in one state and your job took you to another state for part of the year your company wouldn't keep changing the title and registration each time it moved back and forth.

 

I think that you need to check with competent tax counsel. Most States have a 30 day rule, and you've got to register the car within 30 days of bringing it into the state. To avoid that, you've got to take it out of the state every 30 days and keep records of same.

I think attempting to avoid the higher registration fees is probably counter productive, in that it could lead to an audit, and if they take a close look at the transaction, and you haven't been really careful and documented the car's usage, etc., you could find yourself on the wrong end of tax litigation with huge penalties. In California, the statute of 7 years..... If you want to avoid Sales Tax here, you must keep it out of the State for at least 90 days, use it outside of the State during that time period, and be able to prove both. Otherwise, the State looks at this as a fraud, assesses the taxes, and penalties (which are over 100%). Not a good idea.

BTW: both of your plates are readable, so if someone wanted to cause some trouble, you could be turned in where you reside, in California. I'd fix the post.

Art

 

Sorry; it looked like an AZ plate on the BMW I am NOT one of those nice guys that turn people in. Sorry again, Mark

 

Thanks for your concern guys but in my case my cars (the 430 isn't mine)were purchased as a Montana resident so there was never any avoidance of any state sales tax and in the states I own property that have sales tax you can buy vehicles from a private party without paying a sales tax. There is nothing illegal that I know of about owning cars licensed in other states especially since you are doing business in that state they are licensed in.
Oh, Art I don't live in CA and I do keep good records of what is spent on what and where.

 

Those laws are aimed solely at people who move from one state to another and do not update their registration. They're on the books to catch people avoiding taxes by keeping old plates on for years, and so that when tickets are issued, they are not mailed to addresses that the vehicle's owner no longer occupies. However, Llenroc has clearly stated that he owns property in Montana. Thus, the vehicles are registered to his address in Montana, meaning he is paying taxes on his vehicles correctly (just, in Montana) and any tickets he were to get would be mailed to his property (just, in Montana).

Here's my question for you: going by your interpretation of the law you stated, what would someone who spends half the year in one state and half in another do? All those New York snowbirds who head to Florida for a few months in the winter have to re-register their cars every time they go to their home in Florida, and then re-register when they head back to New York? Of course not. They pick a state and register there, and Llenroc has done the same thing.

The LLC rule is no different. It's a loophole, and it's a stupid one, but it's completely legal. These Montana lawyers establish an LLC with a physical address in Montana. Then you have two choices for registration: your home address, or your "business" address in Montana. Of course, since Montana has no sales tax, you would choose Montana thus saving tons of money. And since you have physical addresses in both places, you're not violating any laws.

By the way, if you think it's just Montana doing this, you're dead wrong. I've seen exotic cars in Colorado running New Hampshire plates. Like Montana, New Hampshire also has no sales tax. I get the feeling they're not out here for a quick road trip.

 

You can also just get a PO box address in Montana and do the liscencing without the expense of the LLC. If you keep good records and play the game correctly you will not have any problems. I know 3 private owners that have done that without any problems. I even know a vintage owner in very rural Montana that has never regestered his Ferrari, Rolls, or Aston Martin since new. The Aston goes back to 1959.

 

The other benefit of montana is no emissions requirements, so you dont have to take the car there initially or after to test emissions.

 

I assume that if you do this, you have to get your PO box mail forwarded to your non-Montana home address so that you can get your renewal notices and your validation stickers on time. Plus you (or someone you know) has to get the PO box in Montana in the first place. Regardless, you're right - either works!

 

The California statute is very clear: no matter where you reside, if you keep a car in California for more than 30 days, you have to register it here. If you've acquired it within the last 90 days and have not paid sales tax, they will bill you for same, and there are substantial penalties. Vehicle Code 6700.1 covers this. Providing the sort of advice you've listed above, if relied upon, will cause someone a lot of trouble in that regard. Please read the section I've provided, and you'll see that you are inaccurate, and if you are following that rule, are very much at risk.

When I bought my 360 (long gone) in 2004, I researched this very throughly. I complied with the law, kept the car in Oregon for the perscribed 90 days plus, before I brought it into the California. By doing that I legally avoided the sales tax, but after 30 days in California, I was required to register the car in California. As you can see from the cited section, it doesn't make any difference if you are a resident or not, keep the car here over 30 days, and you've got to register it in California. Period. Your advice works as long as you don't get caught. If you do get caught, expect huge penalities, and perhaps criminal charges.

Art

 

It's pretty easy to do. One call to a Montana lawyer and they will set up the LLC and the mailbox and the send you to Haggerty for the local insurance. All total half a days worth of effort and then it's done. For each car after that it gets even easier. About $750 for the first one and the insurance is pretty competative.
Only issue is that my local 5M umbrealla will not cover my Montana assets. Other than that it's a big cost savings.
Be sure to visit us at MW Motorsports next time you are in Kalispel. ;-)

 

I do know that Manufacturers Cars... press cars and the like... are not required to be titled in CA even if they are here for more than 30 days... I dont know if the have some sort of exemption or not.

After a quick glance at the CA DMV website it would appear as though the timeline has been shortened... now 20 days.

http://dmv.ca.gov/pubs/brochures/howto/htvr9.htm#feesdue

 

Alan:

If you go to the actual statute you see language that supports the DMV language. 6701.1 is right after that. Notice the language at the start of the statute, which says that no matter what the other statutes say, you've got to register the car after 30 days.

Art

 

gotcha.

 

Since we are beatin' a dead horse here...you guys are missing the point. As I already said above the vehicle is owned by an out of state company not the person(you), even though YOU may live in a different state(lets say CA) the vehicle is owned by an out of state entity, it is your "company" car. The worst case being that you may owe the IRS something because the "benefit" is taxable and of course CA being the Tax haven it is probably taxable there too. hahaha
Maybe another way to look at might be if your brother happens to own a car and is lending it to you for a year, he lives in Montana and you live in AZ, how can AZ make you license it there its not your car?

 

Since all states have that same law, I must ask you: do you honestly believe that people who spend more than thirty days per year in multiple states need to register their vehicles in each state each time they go back and forth?

 

usually depends on the age of the car.

 

The NV private party sale/no sales tax is pretty sweet for expensive cars

 

Yep if they stay there more than 30 days, and if you don't, you are subject to penalties. Period. Read the statute, it's very, very clear. If you don't like it, deal with your legislator. Failure to do so will subject you to substantial penalities. Advising people to do otherwise is foolish.

Art

 

I checked the statute. It says this:

(a) Except as provided in Section 6700.2, the owner of any
vehicle of a type otherwise subject to registration under this code,
other than a commercial vehicle registered in a foreign jurisdiction,
may operate the vehicle in this state until gainful employment is
accepted in this state or until residency is established in this
state, whichever occurs first, if the vehicle displays valid license
plates and has a valid registration issued to the owner, and the
owner was a resident of that state at the time of issuance.
Application to register the vehicle shall be made within 20 days
after gainful employment is accepted in this state or residency is
established in this state.
(b) A nonresident owner of a vehicle, otherwise exempt from
registration pursuant to this section or Section 6700.2, may operate
or permit operation of the vehicle in this state without registering
the vehicle in this state if the vehicle is registered in the place
of residence of the owner and displays upon it valid license plates
issued by that place.

If I'm not mistaken, section A says that "the owner of any vehicle ... may operate the vehicle in this state until gainful employment is accepted in this state or until residency is established in this state, whichever occurs first, if the vehicle displays valid license plates and has a valid registration issued to the owner, and the owner was a resident of that state at the time of issuance." That is exactly what I was saying - as long as the vehicle is legally registered to his Montana address, where he owns property, then he can run his car in California all day long with Montana plates as he is not a resident of California.

Meanwhile, section B says "a nonresident owner ... may operate ... in this state without registering the vehicle in this state if the vehicle is registered in the place of residence by the owner and diaplays upon it valid license plates issues by that place." That place, in this case, is Montana. Thus, this pursuit is legal. This also covers my 'snowbird' example: as long as their residence is in New York, they can operate the car in Florida (assuming Florida has a similar law, which it does) as long as their residence is in New York.

As you say, the statute is very clear.

Another example: though my residency is in Colorado, I go to college in Georgia. However because I have not established residency in Georgia, I can keep my Colorado license plates on my car (and pay considerably less taxes in so doing) as that is where I have legal residency. Georgia and Colorado have similar statutes to California's.

 

are company owned cars commercial vehicles?

 

I believe, however, that you are talking about nonresidents, and that the situation we are describing is for local residents with out of state cars.

 

I was in court about a year ago for a speeding ticket, there was another woman there also for a speeding ticket, and she had out of state plates and was a resident. I was amazed at all the work the officer did to check her residency status for evidence in court, he checked her employment, called her employer, called her home, spoke to her landlord. They nailed her on the out of states plates. After seeing that, there is no way I would try registering a car out of state. Its probably easier to rob a bank.