State says it's after owners of RVs who've dodged sales tax

[Paul "Sully" Sullivan]

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.

[wildtoad]

Good for Minnesota! All I'm gong to say!

[MKelley]

I think you have already said too much.

[mythplaced]

I think the point here is that those of us who pay our taxes would like to know that others pay their share also

[JOMARFL (FMCA 401058)]

I think they've been talking on these boards for years about these LLC and the trouble they can bring. Looks like the states are hurting for tax dollars and are not going to recoup what's owed them. It has all to do with the states getting what's owed them, legally.

[Our Time]

Nebraska did the same thing 3 years ago and netted a bundle. Even took a few of them to court and won.

[HD4Mark]

I understand the state trying to collect as much in tax as they can since hardly anyone still has a job to pay them. Unfortunately this kind of thing will force those who can to leave their home state in search of tax relief. We are considering that with NY. That $16K mentioned in the article buys a lot of fuel and groceries.

I agree with mythplaced, no one likes paying taxes but how about we all pay the same percentage. Lets face it though, if you think you can get out of paying some and it is legit, why would you. The legality seams hazy with the LLC thing but this should be a wake up call to those considering it.

[Old Scout]

Im sorry but I focus on what I have to pay and dont spend much time worrying about what my fellow travellers are paying. If the "rule" says you can be out of state more than 6 months and qualify for an LLC--good for you. If you cheat on the 6 months-- bad for you. People will vote with their feet, not their wallet. States have to decide what is important--raising taxes or raising revenue--there is a difference.
Signed: Proud owner of a pretty expensive Texas licence plate!

[sdennislee]

If you owe it, pay it.

[Tha_Rooster]

Be lucky a 250,000 dollar Rv in Ga $17,500 or 7% so like sdennislee said if you owe it pay no sympathy from me.

[Mr_D]

Quote:

Originally Posted by Our Time Nebraska did the same thing 3 years ago and netted a bundle. Even took a few of them to court and won.

Washington is doing the same thing, taking them to court and winning. They were able to "pierce the corporate veil" (although in WA is a Limited Liability Company) and prove it was a tax dodge with no company business.

[w6pea]

Quote:

Originally Posted by sdennislee If you owe it, pay it.

Quote:

Originally Posted by Tha_Rooster Be lucky a 250,000 dollar Rv in Ga $17,500 or 7% so like sdennislee said if you owe it pay no sympathy from me.

Good for the State of Minnesota, I have a friend that bought a $275,000.00 Motorhome in Oregon and registered it there and brags about it, turned him into CHP, he went to his mothers house registered it her and his name, and he still gets away with it!

I am glad I live in San Diego County, Ca. and the reason is 7.75% sales tax, it's as high as 9.75% in other counties in California aka Taxifornia.

I know California is a little over bearing on things but when i walk down the street where I live to go to my mail-box and I see cars from Baja Ca. and other places that have been in my condo complex for more than a year or better I get a little (you fill it in) mad that I am paying full boar and they are cheating. Enough said before I get kick off this forum.


If We Can't Haul It...You Don't Need It ! Motor-T

[Jimmy11]

I look at it like this. What if you wanted to buy a vacation house...and in your home state, taxes would prohibit you from affording it. You get to shopping around and find that you can afford your dream vacation home 4 states over because their property taxes are very low. Is that really tax evasion?

Is an RV really that much different? An RV is like the vacation home except it is not limited by physical location. You can choose your state of license based on the costs involved.

What if Montana offered no Property tax on vacation homes. Would you be a tax dodger for buying there instead of in your home state?

Jimmy

[RustyJC]

Add Massachusetts to the list - see HERE.

Rusty