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 > Iowa Bill Aimed at RV Registration Fee Evasion

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n7bsn

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Posted: 03/22/13 10:45pm Link  |  Print  |  Notify Moderator

Since no one else has posted this...
---------------
March 22, 2013 by RV Business

The Iowa Senate approved a bill intended to prevent tax evaders from
using out-of-state shell corporations to avoid paying registration fees on million-dollar RVs and other luxury vehicles.

Sen. Tod Bowman, D-Maquoketa, said violators will face criminal charges and penalties under the legislation, which now goes to the House, according to a report by the Des Moines Register.

He said Senate File 364 will make it easier to crack down on those who deliberately evade paying registration fees. The bill was approved on a 46-2 vote.

“These wealthy individuals have decided that they are above the law and don’t need to follow the rules the way the rest of us do,” Bowman said. “I’m working to shut down this scam.”

Iowa laws says that a person who purchases a vehicle pays a 5% fee for new registration. The fee on a $25,000 car, for example, would be
$1,250. That money goes to Iowa’s Road Use Tax Fund to pay for the
upkeep of our roads and bridges.

Bowman said the scam works like this: “A wealthy Iowan purchases, for
example, a million-dollar RV. Instead of filing the title in Iowa and
paying the new registration fee, they register the vehicle in the name
of a shell corporation in the state of Montana. Montana, unlike Iowa,
does not charge a fee for new registrations. The scammer maintains their Iowa residency and has no other affiliation with the state of Montana outside the fake corporation. The vehicle is housed here in Iowa and used on our roads.”

Bowman said that since January 2011, the Iowa Department of
Transportation’s Motor Vehicle Enforcement Office has referred for
collection, investigations involving 36 out-of-state shell businesses
created specifically to evade more than $827,000 in fees for new
registration, plus Iowa title and annual registration fees.

The DOT’s Motor Vehicle Enforcement Office is also investigating another 14 out-of-state shell businesses involving 31 vehicles that owe more than $318,000 in new registration fees to Iowa. In addition, the office has pending investigations on another 60 out-of-state corporations, Bowman said.

Under current law, the Iowa Department of Transportation (DOT) can only issue a $150 simple misdemeanor citation if the scam is detected. The bill would change that starting July 1. Under the bill, if investigators from Iowa’s Transportation and Revenue departments determine that a vehicle is owned by an out-of-state shell business, they will presume that the Iowan using the vehicle is the real owner and will notify them that they must title and register the vehicle in Iowa within 30 days.

A person who willfully evades payment of the fee for new registration is guilty of fraudulent practice. In addition to any criminal penalty, the person will be assessed a penalty of 75% of the amount of the fee unpaid and required to be paid.

“These scofflaws are stealing millions of dollars needed to pay for Iowa roads. That’s unfair to every Iowan who plays by the rules and relies on our roads and bridges for safe travel,” Bowman said.


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Artemus Gordon

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Posted: 03/22/13 11:40pm Link  |  Print  |  Notify Moderator

Many States have similar legislation. Several States have been actively prosecuting evaders! Oregon law makes it a crime to lie on your DMV application about your actual residence. Several long arguments here in this forum, where certain individuals consider these issues "loopholes"! They clearly are not loopholes, tax evasion is a crime and should be enforced! But let's face it, lots of really smart people in prison! You can doubt all you want, but if it quacks...it's a duck!

* This post was edited 03/23/13 12:50am by Artemus Gordon *

Turtle n Peeps

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Posted: 03/23/13 12:28am Link  |  Print  |  Notify Moderator

Good luck with that Iowa.

These vehicles are legally registered in another state by a legal company owned by poeple in Iowa. They have right to travel into Iowa and it is legal. The people that live in Iowa have the right to own companies in other states and have vehicles registered to that company.

Like I said. Good luck with that.


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pnichols

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Posted: 03/23/13 01:18am Link  |  Print  |  Notify Moderator

I hope Iowa wins on this.

There's nothing more pitiful than a person who wants to be a member of the Big Bucks Club but whimp-out on paying the dues.


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az99

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Posted: 03/23/13 04:32am Link  |  Print  |  Notify Moderator

pnichols wrote:

I hope Iowa wins on this.

There's nothing more pitiful than a person who wants to be a member of the Big Bucks Club but whimp-out on paying the dues.
I totally disagree with you. The current taxation of motor homes is not fair and that is why people do it. If motor homes were fairly taxed by the value of the chassis, it would not be an issue. Why should a motor home owner pay sales tax on the home part? No one pays sales tax if they buy a similar priced rancher or second home on the lake.
Tax the cab and chassis value or bus chassis value like every other vehicle on the road and the problem will be solved.
The people who drive the big $ units did not get to afford them by being stupid or by paying unjustified taxes.

jdb7566

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Posted: 03/23/13 04:59am Link  |  Print  |  Notify Moderator

pnichols wrote:

I hope Iowa wins on this.

There's nothing more pitiful than a person who wants to be a member of the Big Bucks Club but whimp-out on paying the dues.


Really? You can't think of anything more pitiful than that?

peaches&cream

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Posted: 03/23/13 05:36am Link  |  Print  |  Notify Moderator

Simple to solve. Refuse to sell the purchaser a tag in Iowa. Make them purchase a tag in Mont. Then inforce the laws about residency from out of state residence. Or, since it is owned by a Corp., treat it as a Commerical vehicle. Require CDL and ICC filings.





RetSgt7114

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Posted: 03/23/13 06:06am Link  |  Print  |  Notify Moderator

az99 wrote:

pnichols wrote:

I hope Iowa wins on this.

There's nothing more pitiful than a person who wants to be a member of the Big Bucks Club but whimp-out on paying the dues.
I totally disagree with you. The current taxation of motor homes is not fair and that is why people do it. If motor homes were fairly taxed by the value of the chassis, it would not be an issue. Why should a motor home owner pay sales tax on the home part? No one pays sales tax if they buy a similar priced rancher or second home on the lake.
Tax the cab and chassis value or bus chassis value like every other vehicle on the road and the problem will be solved.
The people who drive the big $ units did not get to afford them by being stupid or by paying unjustified taxes.


I totally agree. If this were about paying for one's fair share of road use taxes, it should not matter what is on the chassis.


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gbopp

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Posted: 03/23/13 06:15am Link  |  Print  |  Notify Moderator

az99 wrote:

pnichols wrote:

I hope Iowa wins on this.

There's nothing more pitiful than a person who wants to be a member of the Big Bucks Club but whimp-out on paying the dues.
I totally disagree with you. The current taxation of motor homes is not fair and that is why people do it. If motor homes were fairly taxed by the value of the chassis, it would not be an issue. Why should a motor home owner pay sales tax on the home part? No one pays sales tax if they buy a similar priced rancher or second home on the lake.
Tax the cab and chassis value or bus chassis value like every other vehicle on the road and the problem will be solved.
The people who drive the big $ units did not get to afford them by being stupid or by paying unjustified taxes.


Excellent point az99. I agree.

Tvov

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Posted: 03/23/13 06:31am Link  |  Print  |  Notify Moderator

peaches&cream wrote:

Simple to solve. Refuse to sell the purchaser a tag in Iowa. Make them purchase a tag in Mont. Then inforce the laws about residency from out of state residence. Or, since it is owned by a Corp., treat it as a Commerical vehicle. Require CDL and ICC filings.


That seems way too logical for a government to figure out.

Also, if people are willing to go to such lengths to avoid the taxes, maybe they should look into changing the tax law? Make it easier to buy and own a large RV in the state, more people will probably buy them and therefore increase total state revenue. Oh well.


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