subshooter

I have a friend that buys multiple expensive cars in a state with high sales/registration taxes. We are talking $300k cars.
He created a LLC in another state with no sales tax and registers the car through the LLC in that state. Cost is $450 for the LLC. This state does not require insurance in that state for company cars. The cars are owned by the LLC which of course is owned by the driver. He keeps his driver's license and insurance in the state that he is domiciled and has zero affiliation with the state that his LLC is registered in. If pulled over, he shows his driver's license and insurance for the state that he is domiciled and presents the registration for the state that the LLC is registered in. He explains to the cop that his car is a company car for his business back in state X and has a home in state Y.

He saved $27k in sales taxes on a car that he bought two weeks ago.

Anybody else doing this? What is "legally" wrong with this model? I get the moral dilemma - that is not what I am asking.

subshooter

Incidentally, corporations are doing this exact same thing to avoid paying taxes in the city that I just moved from: http://www.businessinsider.com/build...oration-2017-4

Randy M

I don't know much about Montana registration, but the moral dilemma lays squarely on the gov't. If I didn't live in a no sales tax state I'd do the same thing.

LexVan

BTDT:

https://rennlist.com/forums/991-gt3-...istration.html

subshooter

Here is an article that shows it is legit and defendable in court. https://www.bozemandailychronicle.co...c0bf7e398.html

P.S. Thanks for the link Lex.

Ccpecot

Yes, typically when I see the Montana tags here in Atlanta, they're on exotic cars (e.g., Aventadors, Ferraris)......

STG

Many states are cracking down on this and sales tax evaders having to pay up $$$. Will be getting even worse that it's such a well known thing. Many stories about that too.

SoCal C2S

seffeed

subshooter

I just moved from Delaware (Zero sales tax) to Louisiana (9.75% sales tax). They want me to pay like $20k to register my two Porsches here. I'm not in the business of giving away free money to governments so that ain't happening. That's how I met a buddy who is doing the same thing as what I am going to do.

I found a case from last year in my state where a guy bought a $351k RV and registered it in Montana under an LLC umbrella. LA tried to fine him $49k in taxes and penalties. He lost but appealed and won. I don't know the details of his case though but case law sets precedence.

Also - This is not Tax evasion. It is tax avoidance. Illegal vs Legal. Don't people buy vs rent so that they can deduct interest?

subshooter

Yeah...I called my insurance company and checked (USAA). I told them directly that I was creating a LLC in Montana and my car will be registered there under that company. I also told them that my car would be domiciled in LA and insured in that state. That is all they really care about right? They said no problem (they are used to Military guys doing this for other reasons). They did caution me to ensure that the DMV in my state was ok with this arrangement but they ultimately had no dog in the fight.

My car was registered in Florida for 20 years while I lived in 12 different states when I was in the military. No issues.

iphilips

Wish I knew this before I bought the GTS and GT3 in California.

Now I know for the next time!

keithgreer

California is cracking down on this. https://www.dmv.org/articles/chp-cra...istrations.php

Randy M

Screw California, never moving back.

abe

You have to love the Cal.Gov.....illegal, costing, cheaters.....I thought they were talking about themselves instead of the citizens of California. They talked about Mexican state registration.....that sounded racist to me. All they have to do is tell them they are illegal and they'll let them pass.
Abe