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And I am telling you I won't be ticketed. I have a business entity in Michigan, and this car is registered under my business. So don't think you can just assume this kind of stuff without all the facts.
As for returning to Michigan, you mad? You are quick to show your insecurity about Georgia just because some people complain about an unjust local law. I chose to move to Atlanta because it is a nice city with cheap COL, and I have no intentions of moving out just because of some touchy poster.
My first post was more for an FYI to the OP and anyone else who thinks they can get around paying a few hundred dollars, who does not have the pleasure of having it registered under their own business.
a) Yes, good for me. And I quite honestly am quite content to pay the taxes.
b and c) No, I don't think you get it. For years, if you bought a car in Georgia, you paid sales tax on the car, and THEN you got to pay the birthday tax every year. Now, that's no longer the case. You buy a car, and you pay one tax, that is roughly the same as the former sales tax, and you don't pay the annual tax going forward. Yes, those moving from out of state get hit with a one-time tax, but quite frankly, since most of us have been effectively paying double taxes (quite contentedly or at least compliantly, I might add) for many years, it's hard to feel terribly sorry for them.
Yes, of course most transportation funding comes from gas taxes, but not all of it. As you've no doubt discovered here, our roads (and many other things) are in pretty poor shape, and we could use every dollar we can legally collect, whether it goes to the general fund or the transportation budget.
No, electric car owners are not conning me or anyone else. Until recently, they quitelegally avoided paying the gas tax or any equivalent because they consume no gas. That loophole is being closed by the recently pased transportation bill, as they'll now pay an annual fee of $200 or so, which goes directly to the transportation fund. As an aside, I enthusiastically support electric cars and intend to own one myself before too long. When I first heard about the annual fee, I was actually quite annoyed, but when I came to understand that it would go to transportation funding because electric cars currently don't contribute very much to the roads on which they drive, it made sense to me.
Finally, no, renters aren't cheating the public school system. Someone owns the property they rent, and the owners pay school taxes on their property.
First, let me say you make many good points.
I am quite aware of the restructuring of old sales tax+Ad Valorem into the current Title Ad Valorem Tax. When I buy my next car, I will be OK with paying the TAVT, even though the state's assessment of vehicle value is a complete joke. What I am not OK with is after paying full sales tax in one state, I'd have to pay an addition 10%+ on the original sale price 18 months later.
I know about the EV annual charge as well, and obviously my argument about the renters isn't water tight. My point is this, most people don't start their day thinking: did I pay my share of taxes today so I can drive on the highway with a clear conscience. Most people don't enjoy paying for taxes, especially taxes that are highly questionable. The evil of the new TAVT is most clearly demonstrated in cases of new residents with relatively new cars.
And finally, THE ONLY WAY to get any relief from the ridiculous state assessed "fair market value" is by trading in your vehicle at a dealership. This is straight from the Georgia State of Revenue: "Reduction (of the TAVT) is made for the trade-in when the sale was made by a dealer, but not when the sale was made by a private individual." After all, the state "fair market value" can even make dealer retail prices look like a good deal.
I am quite aware of the restructuring of old sales tax+Ad Valorem into the current Title Ad Valorem Tax. When I buy my next car, I will be OK with paying the TAVT, even though the state's assessment of vehicle value is a complete joke. What I am not OK with is after paying full sales tax in one state, I'd have to pay an addition 10%+ on the original sale price 18 months later.
I know about the EV annual charge as well, and obviously my argument about the renters isn't water tight. My point is this, most people don't start their day thinking: did I pay my share of taxes today so I can drive on the highway with a clear conscience. Most people don't enjoy paying for taxes, especially taxes that are highly questionable. The evil of the new TAVT is most clearly demonstrated in cases of new residents with relatively new cars.
And finally, THE ONLY WAY to get any relief from the ridiculous state assessed "fair market value" is by trading in your vehicle at a dealership. This is straight from the Georgia State of Revenue: "Reduction (of the TAVT) is made for the trade-in when the sale was made by a dealer, but not when the sale was made by a private individual." After all, the state "fair market value" can even make dealer retail prices look like a good deal.
You also make some very fair points. There's no doubt that this has a more severe impact on those who move to this state having recently purchased a new vehicle elsewhere. I agree that's unfortunate, and I also agree that it's unfortunate that the law makes it more favorable from people to purchase from a dealer. I don't like that, either.
Out of curiosity, I just looked at the state's table to see what kind of fair market value they'd assign to my present car, and it's within a couple hundred dollars of the edmunds.com estimate, and very close to what I would have guessed off the top of my head. My vehicle is four years old, however, so perhaps the state is doing a good job with the older vehicles but failing to adequately take into account 'drive off the lot' depreciation for newer ones.
In any event, welcome to Georgia, the unwelcoming car tax notwithstanding!
You also make some very fair points. There's no doubt that this has a more severe impact on those who move to this state having recently purchased a new vehicle elsewhere. I agree that's unfortunate, and I also agree that it's unfortunate that the law makes it more favorable from people to purchase from a dealer. I don't like that, either.
Out of curiosity, I just looked at the state's table to see what kind of fair market value they'd assign to my present car, and it's within a couple hundred dollars of the edmunds.com estimate, and very close to what I would have guessed off the top of my head. My vehicle is four years old, however, so perhaps the state is doing a good job with the older vehicles but failing to adequately take into account 'drive off the lot' depreciation for newer ones.
In any event, welcome to Georgia, the unwelcoming car tax notwithstanding!
Thanks for the welcome! Yeah I do like it here. Actually I bought my house here even before making the move! That shows my confidence and optimism for Georgia
Quote:
Originally Posted by hautemomma
What happens when people who moved from out of state get caught? I know several people who are rolling the dice.
When we moved here, I had to pay almost $3000 on my car.
The worst that can happen is a ticket citation, which is under $200. Now if you regularly get pulled over for speeding or other violations, this may not be worth the risk. But for a driver like myself, I'd be more than OK with the risk even if I didn't have a shell company to register my car with (using a friend or family member's address, etc).
Ok I feel a need to step in here to make sure people understand the risks they are taking if they should dare follow the advice they get on the internet.
For the purposes of this one post I'm also ignoring any arguments on being for or against this tax and some of the other miscellaneous arguments people are making. I'm merely focusing on these LLC schemes.
It has been stated the Montana LLC thing is legal. It is legal... in Montana.
However, we are not in Montana. If you live here and the vehicle is parked here Georgia law in almost all cases will will trump any conflicts between Georgia and Montana law. (The same goes for any other state)
In most states, even the ones that largely use tax rules following the federal government, there are laws that differentiate themselves from the federal government regarding llcs and individuals.
There are many laws used to differentiate profit generated companies and personal individuals/hobbyists.
In Georgia (and most states) a montana llc tax dodge person will run into two problems. 1) There are provision for "non-income" llc tax treatment. In other words if it is clearly not acting as a business and taking in money in a way that is trying to make a legitimate profit, that entity will be disregarded for income tax in the state, but will still be responsible as a separate entity in Georgia for all sales, use, transfer, and property taxes. Georgia law will not see a montana llc, like this, as an out of state company conducting business in Georgia. They will see it as a non-income entity operating in Georgia.
2) llcs get away from some taxes as what they owned are not considered tangible personal property, rather they are property used to conduct business or be an investment. The problem with the Montana LLC scheme is the car or motor home is completely used as tangible personal property in Georgia. There is no justification of its used in a business in Montana or Georgia.
If I was a concert tour manager and I bought and used a motorhome on the road as a part of my business operation, that would suffice as a business use. Even then there are issues regarding property used for for business and personal use, that mostly comes into play with income tax for revenue generating entities.
California, Massachusetts, Minnesota, Colorado, amongst a few others have tried to attack this more aggressively. Other states have been more passive. (ie. They don't know the motor home or car exists if someone doesn't register it). They will know if someone reports it, they get into a wreck, or something else comes up.
The only state, to date, that I am aware of where anyone has gained any legal traction in the home state of the person is with this scheme is Lousiana. A single individual won a case in Louisiana state court and that motor home was technically parked in Mississippi while the owner lived in Louisiana. The court documents were reported to explain Louisiana needed update their laws similar to other nearby states.
There are special laws regarding Real Estate (which is why Real Estate holdings are frequently put into llcs in Georgia). Real Estate has been given special laws to be seen as a long-term investment asset, as opposed to personal property or property simply just used in the course of operating a business. These laws do not apply to vehicles.
So there are risks involved. You also run into a risk over civil cases in court and from insurance companies after an expensive accident, depending on where the insurance is bought and what the contract stipulates. They often calculate costs/risks based on where the car is most commonly parked, how its owned, how it is used, etc...
Putting a normal everyday car into an llc will likely see any short-term savings eaten up by other taxes and insurance over time, regardless of any further legal and financial risks.
I can't be completely sure of Chengdu's case without further information on the llc in Michigan, but from what he has told us so far he is risking running into legal troubles if the situation comes up. I'm sorry, but your day-to-day street cop approaching your car for another reason is not a validation of state law, tax laws, etc... That is merely selective enforcement by that entity and to be quite frank most local police are not experts on state tax policy, as much as they are on the common laws they enforce on their day-to-day operations. Local police also represent the entity that hires them (the municipality or county), that affects how they behave. So this argument was wishful thinking at its best.
Furthermore, I'm particularly disturbed by Chengdu's self-proclamation on deciding the law isn't just therefore he can ignore it. You are not your individual supreme court, that is not how the law works.
You chose to move here to Georgia. You cited a low CoL. A large part of that is because of complete tax policy. This means we have higher taxes in some places and lower taxes in others. You can't selectively choose to not follow the higher taxes and only pay the lower taxes. You have to take the whole package as prescribed by state law.
At the very least I think outsiders reading this thread need to understand these legal risks given what other posters have stated. Any buyer should consult an attorney in both the state the LLC is established in (Montana) and the home state of the buyer and the property (ie. Georgia) first. Just becomes something is legal in the eyes of Montana law, does not make it legal in Georgia and a licensed attorney in Montanta alone is not in the know 'nor is licensed to adaquetly consult on Georgia law.
You also make some very fair points. There's no doubt that this has a more severe impact on those who move to this state having recently purchased a new vehicle elsewhere. I agree that's unfortunate, and I also agree that it's unfortunate that the law makes it more favorable from people to purchase from a dealer. I don't like that, either.
Out of curiosity, I just looked at the state's table to see what kind of fair market value they'd assign to my present car, and it's within a couple hundred dollars of the edmunds.com estimate, and very close to what I would have guessed off the top of my head. My vehicle is four years old, however, so perhaps the state is doing a good job with the older vehicles but failing to adequately take into account 'drive off the lot' depreciation for newer ones.
In any event, welcome to Georgia, the unwelcoming car tax notwithstanding!
The state has mostly done a good job of valuating the vehicles, but I understand why some people fail to understand it.
Except in special circumstances, what someone directly paid for the car does not matter. Whether someone paid $8000 at a used dealer or $5500 from an individual will not lead to different valuations of the car. It is the same make, model, and mileage it will be valuated the same.
They are using metrics, by law, that average the retail value (ie. the average price sold at dealerships) and the average wholesale value, which are then averaged together. This is also how valuations were conducted for the older annual ad valorem tax that was paid.
So if you buy a car at a low price, from an individual or the wholesale market or perhaps you valuated the car differently in the purchase because it needed new tires or had a cracked windshield, that will not be seen by the state and the state is not willing to put resources in judging all nuances.
I have a business entity "rental properties" that is the reason I have a LLC, if/when I buy a new car here in Georgia more than likely I will go this route, it is a revenue generating business as I am making money and paying taxes off of it each year. Is this any different than google or Starbucks incorporating in Ireland to avoid paying the English tax? No it isn't until the feds close this loophole the states cannot enforce it.
The people who have been sued by the aggressive states, didn't have any business entities. I never thought of doing the LLC route but was convinced to go this way by an attorney in order to protect assets. The sales tax loophole is a bonus.
I have a business entity "rental properties" that is the reason I have a LLC, if/when I buy a new car here in Georgia more than likely I will go this route, it is a revenue generating business as I am making money and paying taxes off of it each year. Is this any different than google or Starbucks incorporating in Ireland to avoid paying the English tax? No it isn't until the feds close this loophole the states cannot enforce it.
The people who have been sued by the aggressive states, didn't have any business entities. I never thought of doing the LLC route but was convinced to go this way by an attorney in order to protect assets. The sales tax loophole is a bonus.
Then understand and clarify any difference between your situation and what you link to.
Also make sure the attorney is one from Georgia. That is the flaw with many of these online postings. What a Montana attorney says, does not necessarily apply to Georgia law.
But I will confess, while I don't like business tax havens either, it is different. I do think the Feds need different laws.
Once the business is headquartered in the tax haven it still applies by laws that are specifically set up for what a foreign entity does to operate a business.
In this case people are being actively encourages to skirt the intent of law by putting property used for personal reasons into a business to escape personal taxes in one state. There is a difference here.
Your particular saving grace is likely that you own the car for transportation between rental properties and use in the course of doing business, even then if the business is operating in Georgia it likely needs a Georgia LLC and would be subject to Georgia taxes the same.
By your logic any semi truck or commercial vehicle registered out of state but doing work in Georgia should have to get a Georgia tag. I live in Savannah, if you go to the port down here, 99% of all commercial big rigs are out of state because of the tax. Under your logic if they are pulled over then they should be ticketed under this law. If this was happening one of the news agencies would pick up on it but I have not seen one story. 99.999% of all LEO's are just gonna run the registration and if it comes back clean along with a valid license are gonna let you go with a citation.
I worked as a contractor for Southern Company and was involved in an accident. The LEO's ran my license and checked the vehicle registration and insurance, that was it. Also Southern Company now registers all of their vehicles in Alabama and Florida, not Georgia. The company owns Ga. Power, the only vehicles it registers here in GA now are GA power vehicles even though the vehicles never leave the state after the initial registration.
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