Colorado Convicts MT Registered RV's

[Ecker]

RV Business
Wednesday, May 21, 2008

State authorities brought civil and criminal charges against Colorado residents who registered recreational vehicles worth up to $400,000 in Montana to avoid local taxes and registration fees.

The Denver Post reported that the offenders registered recreational vehicles only in Montana, which does not charge sales taxes on motor vehicles and has low registration fees. But Colorado residents must pay sales taxes and registration fees in Colorado, said Mark Couch, spokesman for the Colorado Department of Revenue.

The Colorado Attorney General's Office and the revenue department working together obtained misdemeanor tax evasion convictions against 12 people living in Jefferson, Boulder, Arapahoe and Weld counties, Couch said.

They each received deferred sentences, and were also ordered to pay restitution to the state, register their recreational vehicles in Colorado and perform community service, Couch said.

The Revenue Department also took civil action against other Colorado residents who owned recreational vehicles registered in Montana. The state billed 122 recreational vehicle owners $2.7 million in unpaid sales taxes, penalties and interest.

[Ecker]

RV Business
Wednesday, May 21, 2008

State authorities brought civil and criminal charges against Colorado residents who registered recreational vehicles worth up to $400,000 in Montana to avoid local taxes and registration fees.

The Denver Post reported that the offenders registered recreational vehicles only in Montana, which does not charge sales taxes on motor vehicles and has low registration fees. But Colorado residents must pay sales taxes and registration fees in Colorado, said Mark Couch, spokesman for the Colorado Department of Revenue.

The Colorado Attorney General's Office and the revenue department working together obtained misdemeanor tax evasion convictions against 12 people living in Jefferson, Boulder, Arapahoe and Weld counties, Couch said.

They each received deferred sentences, and were also ordered to pay restitution to the state, register their recreational vehicles in Colorado and perform community service, Couch said.

The Revenue Department also took civil action against other Colorado residents who owned recreational vehicles registered in Montana. The state billed 122 recreational vehicle owners $2.7 million in unpaid sales taxes, penalties and interest.

[edgray]

ECKER: thanks for the post. Because it involves more than just MH, I'm linking it to General Discussion. ED

[GaryKD]

This is good to know. These are the things that help me determine where my domicile is loacted.

[Jestme13]

I look at this way. If you just pay what yer supposed to, and stop looking for that free lunch, one will do just fine. I hate lookin over my shoulder all the time, don't you ?

[edgray]

Seems to me the root of the problem is folks don't know what their actual residence State's requirements are or what will be actually enforced. Combine that with advertisements from dealers and law firms in MT touting what IS legal out THERE, and you have a reciepe for a bunch of grief and extra expense, IF you live in a State that choses to persue those who evade the local tax rules.

Each State can have different laws and enforcement capabilities. As with most major purchases, it pays to do your homework. ED

[MCPO Ret]

How about those of us that are full timers and don't necessary spend much time in any one state. I see nothing wrong with the Montana LLC - I guess I am a resident of Montana since we sold our house in Maryland and are in Maine this summer and who knows where in the winter and next year. Don't think everyone pays what they are supposed to in most cases - most are looking for the loop hole or deduction from their taxes. Always wanted to see everyone show up at church just one weekend to support their contribution listed come tax time. Right.

[Petro]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Jestme13:
I look at this way. If you just pay what yer supposed to, and stop looking for that free lunch, one will do just fine. I hate lookin over my shoulder all the time, don't you ? </div></BLOCKQUOTE>

You are correct Steve. I sleep well at night also and don't worry about the tax man knocking on my door.

Don

[Tom N]

No motorhome owner registers his motorhome in MT.

The motorhome is owned by a MT corporation and that MT corporations registers the motorhome in MT.

Where does CO expect a MT company to register their vehicles?? In CO???

-Tom

[Tom N]

And, I see no mention of a corporate owned vehicle in this new release.

I'm questioning if CO is going after CO motorhome owners that register their motorhomes in THEIR names in MT.

This was the situation a few years ago in OR. Owners were using a PO box or someone else's address and registering RVs in their names with an OR address. This is illegal.

CO would have to go after the MT corporation.

[RoadRohrers]

But if a corporation is formed solely for the purpose of avoiding sales tax is it legal? Obviously, the Colorado courts have decided it is evasion within their jurisdiction. Similar situation between California and Oregon at the turn of the century.

Will be interesting to watch as other states, all eager to maximize their income, do with the situation.

My sense had told me the problem had grown to where it would not be ignored. Usually, they wait until I get on board.

[Route 66]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">But if a corporation is formed solely for the purpose of avoiding sales tax is it legal? </div></BLOCKQUOTE>

I don't believe this is the issue.

The issue is, if a vehicle is operated more than a certain number of days, usually 30, in a particular state, then the vehicle must be registered in said state regardless of ownership.

[GaryKD]

States compete for my (and every other retirees') business. I focus on retirees because we are able to make a choice of where our home state will be much easier than those who are employed. States that see the retired RVer as part of their target market will have a tax structure that favorably competes with other states. We know the difference in laws (tax and otherwise) from one state to another is huge. From a tax view, it is obvious which states want retired RVers and which do not. My current home state of Florida has laws with regard to registering vehicles that allow for avoiding (not evading) paying Florida sales tax. The state legislature has many choices with regard to implementing sales tax. The legislature knows the laws they enact must continue to make Florida competitive in the retiree RV marketplace.

For those introducing the moral view, for me, there is no moral issue. Sales tax is like any other tax we pay. We read and follow he law. If in doing so one can reduce or eliminate the tax burden, then go for it.

[RoadRohrers]

I would agree generally, if we were talking residency, domocile, etc. But we are talking establishing a corporate entity. What for is the corporation for? To own a motorhome. Why does a corporation want a motorhome? I don't know. What is the advantage? To avoid paying taxes in ones state of residency or domocile.

I will gracefully bow out here. There will be tons of opinions, but the only ones which matter are the courts, all the way up to the Supreme one if someone has the money to carry the fight.