Minnesota says it's after owners of RVs who've dodged sales tax
PAUL WALSH, Star Tribune
Nearly 300 suspected cases of Minnesotans buying pricey recreational vehicles and then registering them in Montana to avoid paying sales tax have drawn the scrutiny of state investigators.
The state Revenue Department said Wednesday that it has closed 22 of these cases with the need to bring charges and collected about $230,000 in taxes. The department said 270 more cases are being investigated.
The Revenue Department said the tax dodge involves the RV owners setting up shell corporations in Montana -- specifically, limited liability corporations -- to evade paying sales tax.
For a fee that is a fraction of what paying the tax in Minnesota would be, one online company offers to help out-of-state RV owners set up a limited liability company. Along with RVs, the company says it can do the same for cars and trucks, motorcycles, ATVs, boats and aircraft.
The motor homes involved range in price from $150,000 to more than $1 million, the state said. The Minnesota tax on a $250,000 RV would top $16,000, but the tax bill in Montana would be zero.
The department warns that this scheme leaves RV owners open to gross-misdemeanor or felony charges, as well paying the sales tax, penalties and interest.
"While the majority of Minnesota residents pay taxes when purchasing a vehicle, there is a small group that isn't paying their share," Revenue Commissioner Myron Frans said in a statement accompanying details of his department's actions.
"We are investigating these tax evasion activities," Frans added, "and we will ensure that all Minnesotans follow the rules and pay the taxes that they owe."
The department declined to identify any of the Minnesotans involved in the 22 closed cases because none of them was prosecuted, said agency spokeswoman Lisa Erickson.
The department is also inviting anyone who has not paid taxes on their RV to contact its office at 651-556-6684 or visit Minnesota Department of Revenue