Montana/Alaska Tags/NO TAX

What he said.

I live in California, and the police and courts out here have seen every kind of tax-avoidance scheme around.

Not worth it. Keep it clean, IMHO.

 

Thanks. I hadn't thought about that.

Dale

 

No kidding. Google California SHP and "Cheaters"

Dale

 

I will never own a car that isn't licensed in Montana. I even have a car in Hawaii thats licensed in Montana. Its all in the technique.

 

Yes, but you actually live in Montana!

 

Slight catch!!!!!!!

 

My Holy Grail is a set of consular or diplomat plates. I still haven't figured out how to hustle up a set.

I have dreams of being pulled over and getting to say, "Hey flatfoot! Get your greasy mitts off the sovereign territory of the Republic of Djibouti"

 

All you have to do is find a politician to take a bribe. It's really easy!!

 

Many years ago, I did ply the Pakistani ambassador to the UN with whiskey in hopes of getting some plates. The ambassador's brother is a gastroenterologist here in the US and was good friends with my dad.

 

My Iso Fidia had a set of French diplomatic plates, but I was not able to keep them :-((

 

Whoa, cool car! I had never heard of it; just looked it up. I never knew Iso Rivolta had ever made a sedan.

Interesting trivia: did you know that Piero Rivolta's daughter is married to Andrea Zagato?

 

Obviously, you would never understand. I won't even bother.

 

Absolutely. If everyone cheats (and cheating it is no matter how you look at it) then only Montana gets license fees and all the other states, including the one you live in, get screwed.

 

And I agree this might be acceptable. But, to set up a phony address claiming you live there when you may have never visited the state is nothing but fraud.

If someone doesn't mind to worry about every time they get stopped or if someone turns then in that they are going for a heavy fine, then more power to them.

 

Whoah, there. FRAUD? Do you have any idea of what is the legal definition of that term?

Let me ask you a question: Why are one-half of all Fortune 500 companies, regardless of their actual physical locations, incorporated in Delaware? The answer is that Delaware has, arguably, the most favorable corporate laws in United States. By your definition then, most Fortune 500 corporations, by incorporating in Delaware to exploit the favorable legal structure and protections that state provides, are committing fraud.

I take the opposing viewpoint: As a shareholder in many Fortune 500 companies, the management of these companies have both a legal and moral obligation to ME, the investor, to act as the very best stewards of my investment dollars and exploit every legal way to maximize my investment returns--this especially includes not wasting money on paying unnecessary taxes or defending frivolous law suits. Incorporating in Delaware, therefore, simply makes good business sense.

Similarly, if one happens to live in a state that does not specifically make it illegal to register your vehicle through another state, then doing so to reduce one's taxes certainly isn't tax fraud or even something immoral. It simply makes good financial sense.

 

Can you please name the states that allow you to do this?

Dale

 

What everyone is missing is the state nexus issue. If your car is owned by a Limited Liability Corporation (LLC) then if you bring the car into a state other than Montana where the LLC is formed then that LLC has nexus to whatever state (lets say CA). At that time the LLC will be subject to the filing requirements of that state including sales tax.

The way everyone is getting around this is by playing the audit lottery and hoping that the LLC doe not get audited.

I had a client that purchased a $700k boat. Everyone was telling him to set up an out of state LLC etc... I made him pay the sales tax. Several years later the LLC that owned the boat receives a letter from NYS sales tax demanding payment of sales tax as the boat was in NY. They audited the marina and got the information. My client was so happy that he listened to me.

Remember sales tax and payroll tax are fiduciary taxes and you are personally responsible for the remittance. It does not matter that there is a corporation or LLC that you own or are in charge of, sign checks or authorize the filing of sales tax or payroll tax you become personally liable for paying it.

The states are getting extremely aggressive in going after tax avoiders.

In NYS they are arresting business owners for failing to remit sales tax.

 

When a vehicle is owned and registered to a corporation domiciled in one state, but is being physically operated in another, the state(s) in which the vehicle is operating generally considers the vehicle to be compliant--unless the state has laws that specifically say otherwise (I believe CA is one such state.)

You would need to discuss with your attorney the laws of the specific states in question.

Not incidentally, there are many additional reasons why one would prefer to have a vehicle owned by a corporation as opposed to being owned individually, not the least of which are the federal income tax considerations.

 

I can't think of a single instance where having an asset in a state didn't result in nexus and filing/taxation requirements in the state where the asset is located. That said, yes there are many companies that do not pay asset use and/or sales taxes properly in each state...

You seem to know at least one state where this is not the case. Please share!

Btw, what does "domiciled" mean in this regard? Do you mean "incorporated"?

Also, what does "physically operated? mean in this regard? Do you mean "physically located?"

These are the terms that a tax examiner will use when looking into this, fwiw.

All - These games are "generally" just that. Games to avoid state nexus issues and resultant filing requirements and taxation. These are fiduciary requirements and, IMHO, you do not want to be on the wrong side of this...

Fwiw, I know several folks who play these games, and while each of them has a "story" as to why they "think" they are okay to do so, I am equally sure most of them are simply playing the "audit roulette" and taking their chances.

Proceed with caution and enlightenment at your own risk.

 

Yes I had dinner with them in Monterey last year. Piero was at the Monterey historics this year w Andrea.
Image Unavailable, Please Login

 

I repeat my question. Can you name a state (which charges sales and use tax) that allows a resident to title a vehicle out-of-state, individually or through a corporate-type entity, and not pay sales/use taxes, but lets the resident park the vehicle in his driveway? I'm curious because I have not found one yet. Feel free to PM.

Dale

 

What about the case of a race car purchased overseas and brought into NY after paying US Customs duty?

I realise that to register you have to pay NYS tax but as a Race car is ineligible for registration can NY successfully claim sale tax is due as sale didn't take place in NY?

Has NYS's "use tax" held up?

 

I haven't clue about New York state. But in Texas the sales/use tax on vehicle only applies to those operated over public roads.

Dale

 

I think NY is the same:

NYS Motor Vehicle Use Taxwww.nyc.gov › ... › NYC Taxes Administered by the StateCached -
Business Taxes. Motor Vehicle Use Tax.

Who is Exempt from This Tax?
The following owners are exempt from the tax:

Owners to whom the vehicle and traffic law registration requirements are inapplicable;

Cheers