Evading State Taxes: Non-Person Automotive Entities and Geolocation

When a person is born in the United States, they obtain identifiers such as a name and a Social Security Number.

When a non-person entity is “born,” it gets identifiers also. For automobiles, the two most common ones are a Vehicle Identification Number (VIN) and a license plate number. (There is also title, which I’ve discussed before, but that’s not really an identifier.)

In my country license plates and the associated vehicle registrations, like driver’s licenses, are issued at the state level. Montana, for example, has 2.3 million registered vehicles…which is odd, because the state only has 879,000 licensed drivers.

How can this be? Jalopnik explains:

“All that wealthy car owners have to do is spend around $1,000 to open an LLC in Montana, then use the LLC to purchase a car with no sales tax — and said car is not subject to vehicle inspections or emissions testing.”

That explains things. The Montana LLCs need multiple cars for all their LLC-related travel between Billings, Bozeman, and Butte. That’s a ton of miles on the Montana highways.

Um…no.

“According to Bloomberg, former Montana revenue director Dan Bucks said there are likely more than 600,000 vehicles registered in Montana but operated in other states.”

Like California. Where people don’t want to pay the fees associated with vehicle registration here, so they say their vehicles are Montana vehicles. Only problem is, license plate readers on California freeways can identify the movements of a car with Montana plates. And if that “Montana” car is moving in California, expect a visit from the tax authority.

But it’s not just the money hungry loony liberal Commies in California. Jalopnik reports that the money hungry loony liberal Commies in…um…Utah are mad also.

“This is really an abuse of our tax system,” said Utah tax commissioner John Valentine. “They pay nothing to support our state, just a small fee to Montana for the opportunity to evade taxes in Utah.”

Because in the end it doesn’t matter if you’re blue or red. What matters is the green. And the geolocation.

(2002 Ford Excursion image public domain)