Registering your boat or OHV out of state to save on tax money is illegal warns Utah officials
Nov 12, 2024, 10:27 AM | Updated: 10:32 am
SALT LAKE CITY — As the KSL Investigators have been reporting, some Utahns are using a loophole to register their cars, trucks, and SUVs out of state so they can pay a whole lot less.
Last year, Jayce Watkins said he had saved over $8,000 by registering his two cars in Montana.
“Montana actually does not have sales tax on vehicles,” Watkins said.
It’s not just Utah drivers getting their plates from Montana. Utah boaters are doing it, too.
“I would say it’s cheating,” said Ty Hunter, the boat program manager with the Utah Division of Outdoor Recreation.
They estimate that 10% of boats owned by Utahns are registered out-of-state. That means Utah’s losing $500,000 a year in fees, $1.6 million in property taxes – not to mention tens of millions of dollars in sales taxes – according to the Outdoor Recreation division.
Hunter said some Utah OHV owners are also getting Montana registrations.
“That is using our great facilities, our roadways, our infrastructure, and not basically paying their way for that,” he said.
The registrations are done very much in the same way car and truck owners do them. Utahns set up a shell company, an LLC, in Montana. Then, the boat or OHV becomes the property of that Montana LLC.
“It looks legal, it saves a lot of money, but the problem we have is, is that they are not doing the right things and following our state law here, which requires the owners of vehicles vessels to register in the state of Utah while they’re here,” Hunter said. “This is their primary residency.”
Boat owners caught doing this might find themselves up the creek without a paddle—or, more to the point, without a boat since it might get impounded.
“Because it’s taken, and it won’t be released until you pay your taxes at that point in time. And you have to go through the court,” Hunter said.
Hunter said Utahns registering their boats out-of-state deprive Utah of money used for many things, such as maintaining ramps, docks, and buoys, as well as public safety and search and rescue efforts on the water.
“It’s going to be costing…the true law abiders more money,” he said.
KSL Investigators stumbled across this story after a presentation about the issue was made to Utah lawmakers. We asked Hunter what law he would like to see changed to stop this expensive form of fraud. He said he hopes Utahns will choose to do the right thing rather than being forced to do it.
