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Minnesota Goes After RVers Evading Sales Tax

November 16, 2011 by · Leave a Comment 

The state said Wednesday it is investigating 270 cases in which Minnesotans may have set up shell companies to evade paying sales tax on luxury recreational vehicles that can cost more than $1 million.

According to a report in the St. Paul Business Journal, the Minnesota Department of Revenue said in a news release it has closed 22 other cases since Oct. 2010, collecting $230,000 in sales taxes, penalties and fines.

The department said in most of these cases, the Minnesota residents set up shell limited liability corporations in Montana, which does not charge sales tax. The Minnesotans buy the RVs through the Montana corporations and register the vehicles in that state, yet the RVs often are kept in Minnesota.

The state said the high-end RVs cost between $150,000 to more than $1 million.

Minnesota has a 6.5% sales tax, which translates into $9,750 for a $150,000 RV and $65,000 for a $1 million RV.

The state said Minnesota residents convicted of evading the motor vehicle sales tax could face felony criminal charges in addition to having to pay back taxes, penalties and interest.

 

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