Montana/Alaska Tags/NO TAX

I'm BNR railroad. I have locomotive engines and cars in many states. At times a locomotive might sit for 6 months before leaving a railyard. Where do I register them? Where do I pay sales tax on them? Where do I pay annual property taxes on them?


I'm SouthWest Airlines. I have many multi-million Dollar 737 aircraft in most states every day. Where do I register them? Where do I pay sales tax on them? Where do I pay annual property taxes on them?

 

Lol!

You are far to quick to jump to erroneous conclusions, buddy! I have no connection whatsoever to Mr. Bennett or the other attorneys in his firm.

I am, however, just curious enough about this subject to find a bonafide source of information. And, call me KARAZY, but I place considerably more weight on the advice of a Montana law firm than I do on some nameless, faceless, anonymous posters posturing themselves as "experts" and tossing around terms like "illegal" and "fraud" like so much hot air.

 

No attorney or CPA gives blanket indemnification to any client on any tax matter.

If you were an actual attorney or CPA, you would know that. Oops.

 

Here's what I know, Glassman:

I know that I am not shallow enough to believe that I have the authority to render a judgement about another person's morality simply by how much state tax they pay.

So I would urge caution to you and the other folks living in glass houses about the dangers of throwing rocks.

 

So tell me, what weight does an opinion by a Montana law firm with respect to Montana law have on any of the remaining 49 states?

Dale

 

You have no freaking idea what kind of a house I live in. But I do like the reference to a "glass house" I really should look into that. I've built enough of them.

 

If we put this much effort into communicating with our state legislatures we could have probably reduced taxes by now. I'm all for getting the most deductions and savings but I would just feel like an idiot with Montana tags. Here's another cost savings idea: use 87 octane fuel.

 

Big difference here.

YOU are living in a glass box. Mine is made of brick so I don't worry.

 

55-4-120 (Tennessee code) explicitly limits reciprocity to 30 days, with a special rule for motorhomes for 60 days. Relevant sections:

55-4-120. Limited exemption of nonresident owners from registration -- Registration required when transporting for hire.

(a) (1) (C) An owner or operator who operates in Tennessee shall not be entitled to reciprocity for a period in excess of thirty (30) days; provided, that any personnel of the army, navy, marine corps or air force stationed in Tennessee, whose motor vehicle is properly registered in that person's state of domicile, will not be required to reregister the vehicle in Tennessee.

(a) (2) A nonresident owner of any regular licensed or unlicensed mobile home or house trailer may have the privilege of occupying the mobile home or house trailer and traveling upon the public roads of this state for a period of sixty (60) consecutive days without the necessity of having to register the mobile home or house trailer in this state. If any such person remains in the state for any period of time in excess of sixty (60) consecutive days, the person will be required to register the mobile home or house trailer in the state.

 

Book em, Dano!

Dale

 

Lots of trains go through Tennessee. You've heard the country songs. Chatanooga Choo-choo is in TN!

And yet, the state of TN doesn't go after those locomotives when they are parked in railyards for 6 months, long after the supposed "60 day" registration deadline.

Not a single adult in Tennessee is unaware of the trains and how long they stay in railyards.

Yet there is no enforcement of the above law on locomotives because of...drum roll...common law, which is clear that the trains aren't Tennessee property.

So they don't get registered and taxed in TN even though they stay over the supposed 60 day deadline for registration.


Pause



What the government of TN *wants* is for people moving into the state to register their cars within 60 days, but TN has gone about getting what they want in all of the wrong ways, and their selective enforcement (e.g. trains) highlights that flaw.

 

An interesting variation of this is for Illinois, which has substantially lower use tax (capped at $1500) for purchases from a private party. Mr. Bennett has advised me that a viable strategy is to take ownership in an LLC, park the car in Montana for 3 months (as required by IL law), then sell from the LLC to myself as a private party transaction and pay the $1500 use tax. A pretty big savings given that sales tax here is over 10%!

Now, that said, I decided not to pursue this strategy as my Illinois lawyer indicated this would not stand up in court. Apparently there was a case where someone did this and the IL courts decided that because he controlled the Montana LLC, the sale from the LLC to himself was not an arms length transaction. They went on to conclude that the LLC was set up solely for tax avoidance and charged him back taxes + penalties...

 

Or, you could simply avoid the mess of tags and simply hold the vehicles as inventory. . . .

 

It costs more to move than register the car...

 

Well done. But you should really try living under the eye of the Gestapo; i.e. the State of California.

 

Hah! Be glad you don't live in Denmark. 180% tax on top of car price + misc yearly taxes.

 

There is a legal and morally acceptable way to beat taxes. Joint the U.S. Armed Forces and you will be protected from state income taxes, state personal property taxes, and sometimes sales taxes. The appropriate federal law is the Soldiers and Sailors Civil Relief Act of 1940.

But you have to pick the right state in which to enter the military. This will become your "home of record" as long as you are in uniform, unless you take steps to change it. So pick a state like Tennessee or Florida or Texas, all which have no income tax on earned income and no personal property tax. Wherever you are stationed, you are considered a resident of the state containing your home of record.

Another advantage is that you can register your car in your home of record regardless of where you are stationed in the U.S. In the case of Tennessee (which was my home of record for over 30 years), you can obtain license plates via the mail, and you don't have to have your car inspected nor do you have to pay county "wheel tax" on the vehicle. All you must do is inform the county court clerk that you are on active military duty and provide proof of such and pay the vehicle registration fee. If you are buying a new car in, say, Maryland, and you register it in Tennessee, you will have to pay a sales tax in Tennessee, which I recall is 6%. A way around this is to register the car in Maryland, paying 4.5% sales tax, and then re-register immediately in Tennessee, paying no sales tax. Or if you're headed overseas, buy the car wherever and ship it overseas on a state temporary plate, registering it with, e.g., USAREUR (U.S. Army Europe) and paying no sales tax. Or take delivery of a new or used car overseas and register it with USAREUR, or, e.g., AFI (Allied Forces Italy). On returning to the U.S., register the car in Tennessee and pay no sales tax, as the car has been already registered elsewhere. Or, just before returning from overseas to the U.S., buy an American car through the PX, and take delivery in a state (like New Jersey) which will give you a plate but charge no sales tax. Then re-register in Tennessee and pay no tax. I have done all of these things.

There is, of course, a potential downs-side. You may be sent from time to time to some inhospitable location where people are trying to kill you. Hey, but there's a federal income tax advantage to being stationed in a "hostile fire zone." All you have to do is avoid being killed or maimed.

 

The montana thing is very inexpensive...$1500 set up, $200-$300/yr...lets not mix ethics and taxes...that is just stupid...oil companies making $20B in profits a year, pay the least and are the most profitable companies in the world...should the CEO's of those companies offer 55% of their profits as gifts to the US government without asking the shareholders....Being in the top 1% as most ferrari owners would have to be, we pay our fair share...CA is the most expensive place in the nation to live...and primarily because of the social programs here...I for one, am not interested in paying into social programs that I feel degenerate the state and create generations of excuse makers, and dependents. That being said I do not have a montana tag, but have personally assisted those who wanted such. Mostly for motorhomes, and thus no real issue there...in CA it is a 6month aka 50% rule...if you are within it, fine, if not then you are in violation. For all the jackholes who think that knowing the laws and working within them to one's advantage is ripping off the state or breaking the law, or unethical...the next time you go over the speed limit in your gas guzzling Fcar, breaking the law, using up more of the environment, causing potential dangerous conditions, and driving a car that gets 11mpg instead of 45mpg, do you think you are ripping off the citizens of your state? I don't...its called freedom and what your doing is exercising it right to the edge...So next time you redline it, go and apologize to the citizens around, or just realize, to each his own! IMHO!

 

Sounds like the UK stamp (transfer) tax avoidance scheme. You put your house in the name of a company and instead of selling the house you sell ownership of the company. http://www.dailymail.co.uk/news/article-2066485/Super-rich-costing-treasury-1bn-year-stamp-duty-tax-dodge.html

That'd be popular (or maybe it is) in CA. Not for transfer tax reasons, but because prop 13 limits annual tax increases until such time as a property changes hands. Assuming it wasn't seen through as a tax avoidance scam as in your example. Although in this type of transaction, it (sale of the company) would in fact be an arms length transaction.

Note that in the UK example they are not declaring the practice illegal.

 

I think that most of this thread has been about legality, not ethics.

 

Actually it's the other way around -- driving Prius and other high MPG cars is the ripoff. You pay less road taxes per mile. Driving an electric car is completely screwing everyone!! So much so that the states already recognize it and that's why there are already trials (prototype deployments, not court trials) of mileage-driven-tracking systems, so that states can bill on miles driven, not gas consumed.

 

how about this,
Rent some ****ty apt in say Montana, say 3 months, itll only cost your a several hundred bucks. Take a brief trip there, get a DL and register your new Fcar there. Then bring it back to your state and the following year just transfer the registration over as alot of states only tax you when you first by the car. Those of you in states that get you yearly based on its value are kinda SOL, but Im sure you could find a way to keep your out of state address going

 

I've heard it is possible to set up a LLC to register and license a vehicle in the state of Montana. Interested to hear from those who've done it and how?

 

General topic of Montana plates was discussed in another thread:

http://www.ferrarichat.com/forum/showthread.php?t=340791

Not sure if Deer Creek does anything different.

 

Friend of mine is running a Mercedes McLaren SLR like this. Definitely a good way to go if you want to avoid paying taxes legally. If you are looking into this, you might find it easier to just get a dealer's license and run your cars on dealer plates.