Buy Vehicles Tax Free with Montana LLC

I want to say from the outset that I have not investigated this story independently. I do not claim that this practice will work in any state. But there was an article recently in a Framingham, MA newspaper about people using a Montana LLC to purchase RV's sans the sales tax. The practice is to set up an LLC in Montana, and that company will buy the vehicle. Montana will allow you to register your vehicle in their state. But, according to this article, Montana will not share any information about the owner of the LLC that would allow a given state to track them down.

The problem is this: this methodology relies on Montana's secrecy and on MA not being able to find you. The newspaper contacted Ann Dufresne, the director of communications for the Massachusetts Registry of Motor Vehicles for a comment on this. Ann warned drivers would face stiff penalties for trying to avoid the state's sales and excise taxes and other fees.

A person who drives a car in Massachusetts for more than 30 days is required to register and insure it here and pay the sales tax, she said. Residents who don't register their vehicles here could face more than $6,000 in fines and potentially have their license suspended, according to state law.

Big News! You Can Be an Origin-based State and Still Be in the SSTP

Sounds like the SSTP is in danger to me.

Is this the beginning of the end of the SSTP?

The Streamlined Sales Tax (SST) Governing Board has amended the SST Agreement to allow states to become full members even while continuing to source sales on an origin basis. As reported in CCH, the Board and its predecessor organizations rejected repeated attempts in the past to change the Agreement to allow origin sourcing, most recently at its meeting in Kansas City, Kansas. However, the Board relented when confronted with the impending loss of at least two associate member states, uncertain prospects for adding further states, pressure from local governments, and a divided business community.

The chief cornerstone of the SSTP, regardless of how it's spun now, was uniformity amongst the several states. O one of the main impediments to uniformity/simplicity was always the question of origin vs. destination sourcing. Some states do it one way, some another. "Why can't we all just pick one way?" was the theme early on. Well, now faced with losing these associate states and never being able to coax certain origin states to come over to the destination-based approach, the Board blinked.

So what else will they cave on to get more states to participate? You get the feeling that we're in the same boat we were always in just rowing in circles.

Did You Collect (or Pay) That Michigan Sales Tax On Services for 10 Days?

If you collected it or paid it, then you may be in the refund business.

 

Effective December 1, 2007, a 6% Michigan use tax was enacted on certain taxable services. That new tax was vastly unpopular and was repealed but not until December 10, 2007. What to do for the interim? Here's the answer (from CCH): A person that provided any service subject to the tax and collected the tax beginning December 1, 2007, before the legislation that repealed the service tax was signed into law, must return the amount of the tax to the person that received the service or remit the tax to the Department of Treasury, and the person that received the service may apply for a refund of the tax. A person that fails to remit any tax collected from a person that received a service is subject to penalties unless the collected tax was returned to the person that received the service.