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Minnesotans: Register that RV or Go Directly to Jail

  • Sep 16, 2015 | Gail Cole

 They're cool, but they cost. And they can't help you outrun the taxman.

It’s simple enough: If you live in Minnesota and own a motor vehicle that you use or store in Minnesota, you need to register the vehicle in Minnesota and pay Minnesota sales/use tax on it. RVers, this means you.

Although most Minnesotans abide by this law, not all do. In fact, some head to other states, such as sales tax-free Montana, specifically to purchase expensive RVs and motor homes. In the short term, this can lower the price of a vehicle by a solid 6.5% (the rate of sales tax Minnesota applies to motor vehicles). In the long term, it can cost you jail time.

Since 2010, the Minnesota Department of Revenue has been working hard to ensure that Minnesotans register and pay tax on any vehicles purchased in other states and brought to Minnesota for storage or use. According to a recent news release:

“In 2010, the department launched a project … to combat a growing trend of motor vehicle sales tax evasion, especially in the purchase of recreational vehicles (RVs). Minnesota residents would set up shell corporations in Montana … in an attempt to evade paying sales tax on high end recreational vehicles. They would purchase and register the RVs in Montana, evading Minnesota taxes. Because this scheme violates Minnesota law, any Minnesota resident evading the motor vehicle sales tax could face gross misdemeanor or felony criminal charges, in addition to paying the sales tax, penalty and interest.”

The program has been successful. In the past five years, the state has collected more than $1.1 million in taxes, penalties and interest from more than 80 taxpayers. Recently, a man facing motor vehicle tax evasion charges in Minnesota was apprehended by police in Florida and extradited to Minnesota to face the charges. When convicted of a felony, taxpayers can face $10,000 fines and up to five years in prison.

It seems no matter how far you drive, the taxman can find you. Better to cough up the 6.5% sales tax from the start and be done with it. Or follow this sage advice: If you can’t afford it, don’t buy it.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.