Minnesota – Tax Evasion Involving Recreational Vehicles

SALT Report 1219 – The Minnesota Department of Revenue is currently investigating more than 270 cases of possible tax evasion. The scheme involves Minnesota residents setting up shell corporations or LLC’s in Montana and then purchasing and registering high end recreational vehicles through the LLC in an attempt to avoid paying Minnesota sales tax.
Minnesota residents that have registered their vehicles using a Montana LLC must register their vehicle in Minnesota and pay the state’s 6.5% motor vehicle sales tax on the original cost of the vehicle. Any Minnesota resident found trying to evade the motor vehicle sales tax could face gross misdemeanor or felony criminal charges, in addition to paying the original sales tax, along with penalties and interest.
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