Montana/Alaska Tags/NO TAX

I've seen those ads also, especially in DuPont registry.....It can't be as easy as it seems and I'm sure it's not cheap given there is probably legal fees on top of the LLC fee but I may be wrong.....Here in MA we get the tax savings but we do have an excise tax on vehciles every year.....2.5% of their value which is generous....my "new to me" Scud will be taxed at a value of $29K in 2012....after 5 years it's taxed on 10% of the MSRP....the year you buy it new it's taxed at 90%....so a new Italia would cost the owner about $6,750 in excise tax the first year....Massachsetts = Taxachusetts....I'm sure other states are worse...are income tax rate is 5.3% on all income which I don't think is too bad compared to some others....

In Mass it would not be possible with the insurance laws....

 

About $1500

 

Just be glad you don't live in WA state. 9.3% sales tax on a car purchase....

This thread topic has been done many times before. Check your state
laws before trying to register out of state. Most states frown on this practice.

Jedi

 

You can do this fairly legally. Lets not confuse law and morals they are different.

I moved to CA and expected to be there 2+ years or maybe forever. I ended up being there for 2.5 years. I moved from FL -> CA. I kept my FL insurance, FL Tags, FL DL License. I did this primarily to save me the hassle, but I suppose it also saved me a little money, but not a lot because they dont have property tax on vehicles yearly (I think).

Here is the trick; Think of transients that live in RV motorhomes, usually retired, and travel the USA in their home. They need a permeant address, one state DL, etc. So they usually chose a state they frequent and one without state property tax on vehicles and usually a state with no state income tax. So I found quite a few motorhome communities that have a "mail" service where you get a physical address (not a PO box). They will hold your mail, and send it to any address you specify upon request. The cost was really cheap, so cheap I forget, so lets say $100-200 / Yr. If you want to know the one I used PM me. There are >10 in FL. Search for Florida RV Mail Forwarding or the like.

There are issues and caveats galore and every situation is different.

1. Most states require a physical address, not just a PO Box for DL, Insurance, etc. Some RV mail companies provide a real physical address. i.e. 100 Main St, Apt 10115, Lake Whatever, FL 32901
2. FL now requires so much paperwork to get a FL DL you would not even believe; Utility bill with address, divorce papers, birth certificate, jokes-start-here, blood sample, DNA, proof you were a descendant of apes, etc.
3. If you live and work in state A and have a state B permanent address, DL, etc, you still have to file taxes in state A. So this is not an income tax anything.
4. To renew your DL you have to appear in person every X years.
5. If you have a car registered in state A it must be insured in state A
6. If you have an accident in state B which is a 3000 mile drive from state A and you are insured in state A you might have a bit of splainin to do to the insurance company.
7. If you have a state A DL+Insurance+Tags and the Police pull you over you will need to have a well rehearsed story of how you are in state B as a contractor but retain permanent residence in state A. They might ask you how long you have been in state B, I usually tell the truth as to limit how much trouble I can get in.

I did this for 2.5 years. Pulled several times with absolutely zero issues. Seems many people work in state B and live in state A.

*I am not a lawyer, and this is NOT legal advice. My advice should be taken as if it came from a 5 year old trying to get a toy while in walmart. Do your own homework and stop copying from me!

 

Depends entirely on the state you reside in. In CA, it's illegal.

Don't want to pay sales tax? Move to a cheaper state. You can afford to buy and operate a Ferrari but are ok with ripping off your fellow resident over a small amount of taxes?

 

He's not looking to rip anyone off.....he saw an ad in a magazine and asked a question...it was a legitimate inquiry into the legalities of the situation....

 

Zinger,

It's really not worth it and it's not the cops that will get you. Of course you can get away with it once or twice, but once that same cop pulls your beauty over the gig is probably up.

What will get you is your neighbors, there's the nice Loudoun and Fairfax tax evaders hotline that will be called and you'll get reported. Next thing you'll notice is a state trooper waiting for you in your neighborhood waiting to snag you.

Don't tell me how I know I was registered in MD as the tax situation is pretty much the same there as Alaska and Montana and a little closer

 

Alaska has state emissions inspections (though not state-wide) required every two years, and that printout is necessary to register a car. Alaska is very strict on non-residents having DLs and plates who do not live in the state. There are exceptions for students and military. The last few years have seen the IM test back and forth as Anchorage City Council changes, so it may go away.

For those who qualify, if the vehicle is out of state, the inspection is not required to register the car, but proof (military ID, student status, etc with Alaska residency noted) is to waive the inspection. We have the Permanent Fund Dividend program that is tempting to non-residents, and that has tightened up a lot of requirements for any Alaska benefits, programs, and status. Example - if you get a fishing license in another state and it is not a non-resident one, you are disqualified for Alaska PFD, DL, plates, etc.

You may be able to legally have AK plates or DL and not be a "real" Alaskan, but it is thin ice (pun intended). Even if I was not Alaskan (heavy forbid), I would register my car where I live and take that cost into account of ownership.

 

To me, this is just tax fraud.

If you live in the state and buy a car like that, you should pay the registration and sales taxes in that state. Trying to go around the system is just cheating IMO.

I live in Nevada and I pay my registration in Nevada, even if it's very expensive. The idea of cheating to save a few bucks a year seems rather -- unseemly.

That's my opinion. Shoot me but I think it's the right thing to do.


Simply put: Don't buy it if you can't afford the taxes, insurance, or maintenance where you live.

 

I will continue to pay as little tax as legally possible, California already gets enough from me, my corporation and other taxes....I have no compelling reason to want to contribute more....does anyone?

 

Careful what you write here

I have heard stories of DMV accountants surfing car sites looking for what they consider scams

 

I am legal, have nothing to hide including DMV.. I remember in the day when people would fly their airplanes out of state to avoid paying taxes during assessment time, but still pay for their hanger and tie down, go figure....I thought that was really dumb....

 

Why don't you rat them out for a boy scout badge?

 

How is it cheating?

 

There's nothing wrong with it. Taxation has nothing to do with ethics. Taxation is pure coercion they take it by force, not by voluntary cooperation. People should do everything they can to make sure government coffers have as little $ as possible, the more $ government takes the more damage they do with it to the general economy and peoples lives. 4.25% property tax on a 300k car per year is absurd. That isn't even reasonable.

 

Indeed, it was a legitimate question. I didn't mean "you" (him) personally. After answering the question, I was just adding some social commentary.

 

same here.

 

Change 'unseemly' into 'ignoble'

 

Ryan,

I looked into setting up a Montana LLC for my 458 but decided not to do it.

I'm not an attorney, but it appears that, technically, it is legal to do here in Virginia if the car is kept out of Virginia more than 6 months each year.

Here is the Virginia Law (code) that I think applies:
(the "non-resident owner" would be the LLC, in this case).

I went ahead and got VA plates and registered to pay personal property taxes in Loudoun County.
As you know, the first year PPT dollar amounts are the highest and they go down pretty quickly each year after that.
My first year property taxes (2011) are $10,403.74 for my 2011 458 (took delivery in Dec 2010, so 2011 is a full ppt tax year).
They assessed the car at $258k (much lower than my dealership bill of sale, BTW) and I get $462.00 a year in car tax relief.
I'm hoping it drops to $7k - $8k next year.

If you do the Montana LLC strategy, I would find a place in WV or MD to store the car during the winter months.
As you know, Summit Point, WV, is pretty close, only about 30 minutes to the west.
And Point of Rocks, MD, is only 20 minutes north.

 

Right or wrong, most states are attacking the "nonresident may operate temporarily without registration" rule by bringing up the substance over form rule and ignoring the Montana LLC and, instead, treating the car as if it is owned by you, which makes it subject to the sales/use tax.

Would this argument hold water in court? How lucky do you feel? Remember, in most states, not paying sales or use taxes is a criminal misdemeanor, which can be a real problem if you hold any type of occupational license.

Dale

 

They now EASILY cross check your insurance policy against the registered vehicles.

As it's normal to consolidate your collection under an insurance 'umbrella" limited use policy, that's where they will discover you.

I have to tell the State where the cars are physically, when they see them all, that are not titled in Texas.

"Up on blocks, out in the field behind the barn" is the only acceptable answer, in my case.
They had better not be found rolling on the pavement somewhere.

Titled and operated in another State is also good, if true.

Death and taxes, baby......death......and taxes.

 

Or if you hold a security clearance (which is fairly common in this geographic area).

 

Texas currently monitors the FAA website for private planes. Massachusetts backtracked a sample of Montana sec of state records to track down RVs parked in Taxachsetts driveways.

Dale