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Montana registration crack-down

Discussion in 'Ferrari Discussion (not model specific)' started by Terence Courtnage, Oct 25, 2018.

  1. Solid State

    Solid State F1 Veteran
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    Not just in government taxation. One word: Healthcare. Premiums are based on income. So are a lot of other employer-based agreements. Yes a pair of shoes will cost you twice as much if you make twice as much. Its a Socialist mentality that took over twenty years ago and nobody seemed to have a problem with it. Joe the Plumber was center stage at the McCain-Obama debate and people voted for Joe to share his wealth.
     
  2. davemqv

    davemqv F1 Rookie

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    I am in the process of moving back to CA from NY and I have been checking on this recently. You are fine to drive your out of state car in CA "temporarily" if you have an out of state license. You are legally required to register your car in CA within 20 days of establishing residency. There are obvious grey areas there, including people with homes in two states or people who move to CA but keep their old ID's.

    I think it basically boils down to what gets you pulled over and what doesn't, how big a jerk (or how nice) the cop wants to be, and how much grief you're willing to go through to avoid registering in CA. Montana plates are a known tax/emissions dodge, and the CHP used to even have a warning page on their website saying they specifically target them. On the other hand, I recently drove around LA for months on NY plates and never had an issue. If I had been pulled over, I'd have had a NY ID to match, so no problem.

    Honestly, I was rather terrified of the whole thing since it's changed so much in the time I've been gone. But while I think NY's laws are more reasonable, CA is not as unfair as I'd expected (as of today, anyway).

    But yeah, driving around CA in a $300k Ferrari with Montana plates is probably going to get you pulled over. A lot.
     
  3. ScreaminRevs

    ScreaminRevs Formula Junior

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    I believe there's a law somewhere that states that emergency lights can only be activated in a real emergency. (Any attorneys who are versed in all the laws can help here.) Cruising around one state in another's plates hardly qualifies as such.
     
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  4. davemqv

    davemqv F1 Rookie

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    #554 davemqv, Jun 4, 2020
    Last edited: Jun 4, 2020
    Another option that a lot of guys with serious collections seem to use is to officially become a "dealer" and get dealer plates. I have no idea what the laws are, how easy/difficult it is to do, etc., but there are a few well known collectors in CA I know who have dealer plates on a lot of their cars.

    If you have a big collection of high priced cars, I get the desire for this kind of workaround. Even for a wealthy person taxes on 20 cars becomes a war of attrition at a certain point (I'd imagine...not wealthy enough to suffer from that affliction! Lol).

    Generally though I'm in the camp of "just pay the $2". If you can afford the car, the maintenance, the insurance, the garage, the detailing, the gas, then you can afford the taxes.

    Is it 100% fair? Probably not. Is life 100% fair? Not even close. Sometimes it swings your way, sometimes it doesn't. At least you can take pride in knowing you help a bit more than the average guy to keep the roads in decent shape, and maybe buy school lunch for a few poor kids now and then. Not so bad really. That's how I see it anyway.
     
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  5. CornersWell

    CornersWell F1 Rookie

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    While I don't know the current rules regarding Independent Dealer status (or for other states), at one time, it was my understanding that ID's did not pay property or transfer tax on their inventory. They were required to sell a certain number of cars in a given time period (annually or monthly, IIRC). It's not a big number, but it does require some effort. That said, compliance was possible, and I did observe a number of higher end cars (a Koenig 512BB, for example) with ID plates affixed for an EXTENDED period of time.

    This may still be a viable option, but I haven't looked at it in a LONG while.

    CW
     
  6. Gh21631

    Gh21631 F1 Rookie
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    This is where you are wrong, only a fraction goes towards these things. For example how much of each dollar goes to state employees pension, vacation, benefits, etc. Left overs go to the state. No thank you. I prefer to give to charity. I dont trust politicians or gov workers spending my money.
     
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  7. BT

    BT F1 World Champ

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    I did not know premiums are based on income. When I call around, I don't get asked how much I earn, so how is that accomplished? I understand people pay more for more comprehensive coverage, but the cost is the same for the same risk group (healthy / pre-existing conditions, age risk), so from what I can tell, the same product is sold for the same price independent of income.
     
  8. Clyde Romero

    Clyde Romero Formula Junior

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    all of sudden people are getting nervous about this issue and they should be
    it will be interesting when the axe falls on those who have been skirting the law

    love the read more slowly reply
    a classic
     
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  9. davemqv

    davemqv F1 Rookie

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    Well, you cherry picked a bit there. As I said, life isn't fair! However, it is totally fair for you to have your beliefs, and I'm not here to argue them. This isn't P&R. I was just speaking hyperbolically to say that to me, the taxes aren't the big deal. Honestly I'm often more concerned with the smog requirements of cars that I want to own!
     
  10. Solid State

    Solid State F1 Veteran
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    Work for a large cap enterprise as most Americans do. Healthcare plan premiums based on income level. Lowest to highest for the same plan can be twice as much in some places and some plans. Same with other corporate benefits. The concept really took off in corporate America under Obama. Rather distasteful for the US.
     
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  11. jjtjr

    jjtjr Formula Junior

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    I think you will be waiting a long time to see this happen. There are countless laws being ignored every day and the answer is always the same from law enforcement; we are too busy going after more important problems. Now if a particular state were to set up a task force for some thing like this then well maybe, but that is highly unlikely because the juice will not not be worth the squeeze.
     
  12. Nospinzone

    Nospinzone F1 Rookie

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    Depending on the state, you may well be right.

    In Massachusetts the state collects the sales tax, but the big hit is the recurring yearly excise tax and that goes directly to the city/town in which you live. So the state could care less (unless they miss out on the sales tax) and it is up to the individual city/town to enforce the law. However, they can and do enforce it.

    Here is an excerpt from the link, and keep in mind aside from the $500 ticket, those people had to pay back taxes plus penalty and interest. The reason the "residents demanded a crackdown" is their neighbors who cheat literally take money out the honest people's pockets. Nice neighbors huh? :(

    https://whdh.com/7-investigates/7investigates-car-registration-evasion/

    Note: Fowler is the Chief of Police

    Salisbury police wrote the most of any department in the state. Cars there are often registered just over the border in New Hampshire, where fees are significantly cheaper. So more out-of-state plates mean less excise tax revenue for Salisbury.

    “It’s almost like a quality-of-life crime,” Fowler said.

    Fowler said residents demanded a crackdown. So he drew up a program to target registration evasion. Now, some Salisbury officers spend their overnight wintertime shifts tracking license plates. If they log the same car on 30 different days, they hit the driver with a ticket, which comes with a $500 fine.
     
  13. ScreaminRevs

    ScreaminRevs Formula Junior

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    ^ I took the liberty of pulling up this Fowler guy's salary. https://www.salisburyma.gov/board-of-selectmen/pages/town-reports

    Unfortunately, for some reason FY 2015 is the last one on record. He was paid over $142,000 that year. Care to wager that it's much more now? No doubt he'll retire before 65 and will get some exorbitant pension . . . . . courtesy of the local taxpayer. What did he, or any of the other public officials produce? Nothing.
     
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  14. BMW.SauberF1Team

    BMW.SauberF1Team F1 World Champ

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    So LA officials want Police funding cut back. Will that lead to more traffic citations in general to increase revenue? What are the chances instead less citations occur due to less police/resources being available?
     
  15. RonH

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    Actually not true in California. As I have said before, the CHP has a website dedicated to it. Up until the recent protests, the police were out in full force in the Newport Beach/Laguna Beach part of PCH making their presence known and pulling over cars left and right for anything and everything. Tons of exotics cruising in that area and I have seen a number of Lambos and Ferraris pulled over in recent weeks. I don't know how the collection money is diveyed up, but since the CHP has a website dedicated to catching out of state plate scams, I wouldn’t be surprised if they get a piece of the action.
     
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  16. jjtjr

    jjtjr Formula Junior

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    Well, as post 564 states there may be a pause on this if they cut funding to the PD. Here in new england, police (both local and state) are more concerned about getting OT working road construction to bolster their salary (and I know several officers that easily pull down 100+K /year) and working cases. I personally do not have a dog in this fight as I register all my vehicles in my home state and pay my high taxes, but I think trying to get smart people who know how to evade taxes and skirt through loopholes is a lost art. It's like trying to stop drug traffic, or getting Amazon to pay their taxes. They will always find a way.
     
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  17. RonH

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    #567 RonH, Jun 5, 2020
    Last edited: Jun 5, 2020
    Maybe in New England, not in California. Not sure what is going to happen with the LAPD as the post suggested but the CHP are part of the car culture, they even have cars and coffee events dedicated to the CHP and they bring their cars to them. It’s a love/hate relationship. The CHP are not going away and will be like dogs looking for a bone. They will be looking for ways to increase revenue. Anything else is just California Dreamin as the Mamas and Papas used to say.
     
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  18. davemqv

    davemqv F1 Rookie

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    I agree. Anecdotally, I know several guys in CA who have declared the days of the Montana plate loophole "officially over". People who went for years without an issue are seemingly getting pulled over a lot.

    CA black plates look cooler anyway! :)
     
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  19. Texas Forever

    Texas Forever Four Time F1 World Champ
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    On the Constitutional issue, I wrote about this many years ago and contacted several state agencies, and their logic had nothing to do with whether a Montana LLC was valid. Their argument instead was: if a state resident keeps a car in his home state, they would ignore any legal wrapper if the sole asset of the LLC or whatever was the car and there was no other business activity. They would require the car to be registered in their state. The legal theory is the same as "piercing the corporate veil," and there is no Constitutional issue.

    As a practical matter, no one is going to go to the mattresses on this. Don't do the crime if you can't do the time. If you get busted, just pay up.


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  20. CornersWell

    CornersWell F1 Rookie

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    I'm sure they don't want to see the constitutional issue, though. As you point out, THEY would "ignore any legal wrapper". Again, that's a conflict of interest, because they generate more tax revenues for themselves by "ignoring" MT's "legal wrapper." However, it remains legal in MT, and there's full faith and credit between states. I see this as an issue infringing on that.

    As I acknowledge, however, there is an issue of whether, EVEN IF you've complied with all the technical requirements, an authority (in particular, the IRS) may declare this to be a taxable "scheme", because there's no other purpose for it to exist. So, while CA has, apparently, made a determination that they will not honor MT's "legal wrapper", MT has every right to do establish legal requirements for corporations and tax as they see fit. However, they are not enjoying the benefits of full faith and credit when CA "ignores" their "legal wrapper" and taxes their corporations owners by piercing their corporations' veils (limited liability protections). Consequently, the two states are inconsistent in their treatment and, IMO, at odds.

    SCOTUS exists to resolve just such inconsistencies (along with many others, of course). I concur that unless there's a big enough amount at issue, this likely won't go up. There's no incentive for CA or MT to resolve the issue. Rather, it's CA (and other states') government against a corporation/individual. VERY expensive to defend and uncertain as to the outcome. Arguments for and against exist. Potentially, I could see someone suing CA in a MT court, which would be friendly, likely, and CA having to answer there. That said, I'd be curious to see the theories of the case and how it would go.

    Further, no one has responded to my hypothetical. Is it inapposite?

    CW
     
  21. jjtjr

    jjtjr Formula Junior

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    Does anyone know someone, or is someone that has been ticketed for having Montana plates and LLC, fought it in court, and won or lost? And if they won, could they be subsequently pulled over and ticketed again? I'm not sure what the legal angles are on something like this, but it would be interesting to know.
     
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  22. Texas Forever

    Texas Forever Four Time F1 World Champ
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    I'm not sure you get it. There is a big difference in an out-of-state LLC that is running a business versus an out-of-state LLC that holds a single asset - namely a car parked at your home state residence. I'm not a lawyer, but I do a lot of tax planning. I don't see the single asset LLC holding water. I could be wrong.
     
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  23. RonH

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    CW, there is nothing to respond to. All this constitutional stuff is junk science. As I said before, there is no constitutional issue here. States have always been able to tax their residents. There is no ability for anyone to sue CA in a MT court. THAT would be unconstitutional. SCOTUS has decided that states like California can impose taxes on their residents for out of state purchases and they have even said that states like California can require out of state vendors to collect and remit to California sales and use taxes on those out of state sales.
     
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  24. RonH

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    Texas Forever, you are 100% correct.
     
  25. CornersWell

    CornersWell F1 Rookie

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    Oh, I very much "get it." However, according to MT, there's NOTHING wrong with a corporation being formed to hold a single asset. And, that should be given considerable weight by CA. It's just being ignored by CA, because, economically, it benefits CA to ignore it.

    CW
     

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