Just an update in case anyone is interested - there was a discussion
about this on the list a little while back...
I have been looking into the possibility of setting up a Montana LLC
to register my vehicles. The basic idea is that the LLC is the legal
owner of the vehicle, and as a non-resident, is not subject to sales
tax on the purchase of a vehicle, and since the vehicle is titled and
registered in Montana, the DMV fees and such are much less expensive
than in NY, plus there is no annual inspection. It results in a less
expensive and generally more hassle-free vehicular experience.
I have been checking into various aspects, weighing the pros and
cons, and was *this* close to pulling the trigger when I stumbled
across a provision in our idiot governer's 2009-2010 budget. They
added a bill to specifically close this loophole for NY residents.
You can find it in the "2009-2010 Article VII Revenue Bill", part AA.
The relevant text is quoted below:
-------------------------------------------------
[...]
The Tax Law also provides an exemption from the use tax for tangible
personal property purchased out-of-state by a non-resident. See Tax
Law section 1118(2). Some New York residents are using the "new
resident" use tax exemption in Tax Law section 118(2) to avoid the
sales tax on motor vehicles, vessels, and aircraft used in-state by
forming a new corporation or a limited liability corporation that
purchases the item in question out-of-state, brings the item into the
State, and then allows the New York resident to use the item at will.
Section 2 of this bill would attack this tax avoidance method by
amending Tax Law 1118(2) to provide that the new resident exemption
would not apply to the use of an aircraft, vessel, or motor vehicle
purchased by a business entity out-of-state for use in-state primarily
to carry individuals employed by or otherwise associated in specified
ways either (1) with the purchaser if any of the transported
individuals were residents at the time of the property's purchase, or
(2) with an affiliated entity of the purchaser if the affiliated
entity was a resident when the property was purchased.
The bill would define "carry" to mean taking any person from one point
to another, whether for business purposes or the pleasure of that
person. The term "affiliated persons" has the same meaning given that
term in the definition of a vendor in Tax Law section 1101(b)(8)(v).
Thus, under bill section two, when a resident individual or business
creates a new business entity which purchases an aircraft, vessel, or
motor vehicle out-of-state for the use of an in-state resident
associated with that individual or business, the new business entity
would owe use tax. This bill is not intended to limit the common law
remedies available to the Department to combat similar use tax
avoidance schemes for tangible personal property generally.
Section 3 of this bill provides that the bill takes effect immediately
and applies to sales made and uses occurring on or after June 1, 2009.
[...]
-------------------------------------------------
(Don't you just love them calling this a tax avoidance "scheme"?
They're the ones with the monopoly of force, robbing people at
gunpoint in a blatant disregard of the Constitution and morality in
general, but someone working within the framework of the state's
own laws to make use of an exemption is a "scheme". Don't get me
started...) ;-)
When I saw the June 1, 2009 date, at first I thought maybe I could
go ahead and at least get my existing vehicles registered, but I don't
think that would do me any good because it also says it applies to
"uses" after that date, not just sales. It would be just my luck to
transfer ownership to the Montana LLC, then have to pay use tax on
the vehicles again, which I'd already paid when I registered them in
NY in the first place. That would not be good...
I guess this still can be done, in which case the NY DMV fees and
inspection hassles are still avoided, but having to pay NY sales tax
on vehicle purchases obviously eliminates a large benefit, not to
mention the possibility of having to pay sales tax again on those
vehicles which are already owned!
I wasn't really even thinking about the sales tax part, I was more
looking at this to reduce the DMV fees and annual inspection hassle.
I calculated that registering the vehicles in MT would save me about
$335 per year (on 8 vehicles) in DMV and inspection fees alone.
(Permanent registrations of 11+yr old vehicles in MT means the only
annual expense is a $15 LLC filing fee and whatever your registered
agent charges - I found an outfit for $49/yr. This would pay for the
expense of setting up the LLC and registering the vehicles in MT in a
little under 4 years. I guess this could still be useful to reduce
the DMV fees and inspection hassles on future purchases, even if I
have to still pay sales tax on them, but, if I had to re-pay the tax
on the vehicles I already own, obviously that is a non-starter.
I hate New York. :-( Well, the land-mass itself I have nothing
against, I actually like it, but the *government* of NY is pretty much
composed of greedy, manipulative, low-life scumbags. If you are
thinking about moving here, do yourself a favor and... don't! Do not
pass go, do not (pay) $200, keep moving and pick a state where you
still have some semblance of liberty. MT or WY perhaps?
Anyhoo, sorry to be the bearer of bad news, but I thought some
folks might be interested in that. (I spent a lot of time researching
this stuff and its a real bummer to be shut down like this - I could
have been doing something productive instead!) Mike, looks like
Maskalans, LLC will have to wait until you move to a state that
doesn't suck quite so much. :-( (Then again, moving to a better
state would probably eliminate the need to set up a holding LLC in the
first place...)
--
-Jon-
.- Jon Steiger -- jon@dakota-truck.net or jon@jonsteiger.com -.
| '96 Kolb Firefly, '96 Suzuki Intruder, Miscellaneous Mopars |
`-------------------------------- http://www.jonsteiger.com --'
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