Avoid paying taxes on UTV?

[BK911]

Buddy of mine is thinking about buying a UTV in TN.
Dealership told him if he could find somebody out of state to buy it, he would avoid paying state taxes.
All they need is a picture of an out of state license and cash/check for the vehicle.
My buddy is thinking about having his Dad purchase it from OH.
I told him this was a bad idea, that the gubmint will get their money somehow, but I dont know how?
Dad will never have to register it because it is an off road vehicle.
And cant Dad gift it to his son?

[ossiblue]

Originally Posted by BK911

Buddy of mine is thinking about buying a UTV in TN.
Dealership told him if he could find somebody out of state to buy it, he would avoid paying state taxes.
All they need is a picture of an out of state license and cash/check for the vehicle.
My buddy is thinking about having his Dad purchase it from OH.
I told him this was a bad idea, that the gubmint will get their money somehow, but I dont know how?
Dad will never have to register it because it is an off road vehicle.
And cant Dad gift it to his son?

It sounds like the dealer is just trying to help avoid sales taxes, in which case his scheme would work. If TN requires registration of UTVs, that is a different issue and can likely be overcome with the "gifting" action.

However...check out the TN laws. California doesn't require yearly registration, but does require initial registration for plates. That requires an application fee and documents like title or bill of sale, and if the vehicle is from out of state, payment of a use tax. That use tax can be overcome if the vehicle is a gift, but in California, if the vehicle is new and brought in from out of state, they will be suspicious as that is a tactic used to avoid taxes as well.

Have your buddy do his homework for TN before moving ahead.

[stomachmonkey]

How much money are we talking here?

$500?

$750?

He should just do things the right way.

[BK911]

About $1000.
Integrity is cheap nowadays!

[stomachmonkey]

Originally Posted by BK911

About $1000.
Integrity is cheap nowadays!

Ask him what his Tax Attorney charges per hour.

If he likes to gamble then Vegas is a better choice.

[rwest]

I don't know how it works in OH, but in MN I would be expected to pay MN tax on any out of state purchase over a certain amount each year, so legally the dealer wouldn't charge the tax to dad, but legally he may still owe it to OH.

[BK911]

Thanks guys.
I did a little research on this and was pretty confused.
I told him to go ahead and let me know how it turns out!

[Norm K]

It sounds as if what the dealer is really saying is the dealer won't have to collect sales tax, which could make the buyer think he can save some money buying there versus from a dealer with a bit more integrity What the dealer's failing to say is that the state will simply collect the tax when he goes to register the vehicle. Your friend would pretty much have to register the vehicle in a state like Oregon, which has no sales tax, in order to avoid paying sales tax. But if he thinks his home state doesn't watch for (even if not actively) vehicles of this type running around with Oregon plates he might be in for a rude awakening.

[juse1990]

If a retailer does collect sales taxe in a state in which it is not registered to do so, that constitutes an illegal activity.