Illinois motor fuel tax violation

[GABAHR]

 Last September, I  pulled into a rest stop outside Springfield, IL.  Someone knocked on my door and it was the Illinois Dept. of Revenue.  He said that I was in violation of operating a commercial motor vehicle in Illinois without the appropriate credentials (IFTA license).  He stated that I had three axles and Montana license plates on my coach, Florida tag on my car.  Because of the Montana LLC  on the coach, it was treated as a commercial vehicle and needed to display the IFTA decal on my coach just like semi trucks. 

He wrote me a ticket and after returning home, I had a ticket in the mail for $1000.00 dollars.  I have protested this with them and they have refused to change their position or accept a lesser amount.  They have now turned me over to a collection agency to try and collect the amount. 

Has anyone had this happen to them or any advice on this matter would be greatly appreciated.

[richard5933]

Welcome to the FMCA Forum. Sorry your first post has to be about something so irritating.

My guess is that they know you're unlikely to return to their area to contest the ticket in person, so they have no real incentive to do anything other than what they're doing. Have you officially contested the ticket with Illinois yet, or has that deadline already passed?

Sounds like they are saying that every vehicle owned by an LLC is automatically deemed to be a commercial vehicle, regardless of whether it's used in commercial service or registered as such. On the surface it doesn't sound correct, and you could probably hire an attorney to fight this. They might win the case in Illinois, but it probably will cost more in legal fees than the $1000. Also, you stand the chance of raising the hackles of the authorities in the state where you live, as more and more states are starting to crack down on residents with vehicles registered in other states.

[jleamont]

3 hours ago, GABAHR said:

Because of the Montana LLC

GABAHR, Welcome to the FMCA Forum! Sorry to hear of this, I am shocked they took the time to sniff around an RV.

That is the law. If owned by an LLC it automatically makes it a Commercial Motor Vehicle if the combination GVWR totals over 10,001lbs. Think about it LLC means Limited Liability Corporation. 

Same thing goes if you have a travel trailer behind your 1/2 ton pickup that is registered to a business or corporation, could be a sole proprietorship, LLC, INC doesn't matter, the combined GVWR of the 2 totals over 10,001 lbs the combination is now a CMV by definition. Only in Virginia have I seen that enforced. Most LEO's turn a blind eye to RV's of all types. 

I watched them with a row of travel trailers pulled over reading them the riot act, dumping out their beer 3 years ago on RT13. No alcoholic beverages are allowed in a CMV. Looked to be in the coolers in the pick up beds. 

When you think of all of the things he could have done like called a State Trooper DOT officer over and written you up a bunch more after performing a full level one roadside inspection. Given the GVWR of the coach would require a CDL, medical card also which might have resulted in a license suspension unless you possess a CDL of that class.

When we bought our DP, I could have financed it through the bank my small business used, I broke out my law books read up on it, while my rate would have been cheaper and the coach would have become a tax write off, the other legalities made it very undesirable.

I do have a Class A CDL and a current medical card, in 2018 I would have had to have electronic logs installed, filed IFTA and in PA it would have had to be registered Apportioned. 

[desertdeals69]

I would say that you should register everything legally and not have to worry about it.

[richard5933]

2 hours ago, jleamont said:

That is the law. If owned by an LLC it automatically makes it a Commercial Motor Vehicle if the combination GVWR totals over 10,001lbs.

What law is that?

This starts to get really confusing, since the definition of CMV varies by state as well as the Federal definition. In Wisconsin, the weight for a CMV is generally 26,001 pounds - but of course there are all sorts of exceptions (like a motor home) as well as vehicles which weight less that are also considered a CMV. For example, if you use a light 1/2-ton pickup to haul hazardous materials for a business it is a CMV.

The fact that a corporation owns a vehicle means absolutely nothing when it comes to determining if it is a CMV. If that were the case, then any time a company issued a pickup truck to an employee as a personal car as a benefit it would be considered a CMV. What if someone worked for a company that had a motor home available for personal use by executives for non-business purposes? Would that be a commercial vehicle? Not in Wisconsin.

I just read through the entire definition of a CMV in Wisconsin, and there was not a single mention of who the registered owner was. There was lots of talk about the weight and capacity of the vehicle, talk of use of the vehicle, talk of how many passengers it could carry, but not a single mention of who owned the vehicle. The Illinois definition also does not mention the owner as being a factor in whether or not the vehicle is a CMV. It has to be used in intrastate or interstate commerce. (http://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=062500050K18b-101) I'm sure that other states have similar definitions.

If ownership were the key, then would any sole proprietor that owned a semi be exempt from CMV status if he/she owned the truck personally? Of course not - it depends on the use of the truck.

[jleamont]

Richard;

A commercial motor vehicle (CMV) is any vehicle used to transport goods or passengers for the profit of an individual or business. Examples of CMVs include pickup trucks, box trucks, semi-trucks, vans, coaches, buses, taxicabs, trailers and travel trailers.

He is a business, thus how the word “Commercial” comes into play and the GVWR of that coach seals the deal. If it’s not a business he would have to prove that in a court of law, but how could you stand in front of a judge and tell them you only did it to avoid paying taxes and it’s not a real business. You either pay the fines on the left or right, either way your guilty. Worse case scenario both sides want a piece of you.

If you purchase a tractor (road tractor) register it as a truck, you must put “not for hire” on the exterior, and it would have to be registered to you, not a business. That should, should exempt you from federal regs, however you would still be subject to the laws of the state in which it’s registered. I can guarantee you would be stopped and most likely fined, you would have to prove your innocence in court.

Look around while you are traveling, I have seen many motor homes with IFTA stickers, entertainer RV’s come to mind. 

I worked for a dealership that owned a motorhome, it wasn’t registered to the business, it was registered to the owner of the business personally, he did loan it out to employees. That was how the corporate attorney told him to register it. 

You are correct, the laws can be confusing, had I not studied it and enforced it I wouldn’t have commented. In the end we cited it and let the judge call it,  but we had to have enough to cite it, this has plenty to get writers cramp on. I’m shocked the fine was so minimal, if it were me I’d be more concerned with what else is coming from the IRS or other entities within the government that I am unaware of.

[richard5933]

First - I am in agreement that the most simple and clear-cut way to avoid all this is to register your motor home in the state where you are a resident. I'm not in favor of playing games to get out of paying taxes. For every vehicle that gets registered out of state, those left doing it the right way have to pay a larger share of the tax burden than they should. Now that states are starting to crack down on this, I believe we'll see more and more tickets being issued. As annoying as that is, it's still better than having the state audit your taxes or charge you with tax evasion.

But, the line between a commercial vehicle and a non-commercial vehicle is very fine. Without a doubt, there are some judges that would agree with the officer that wrote the ticket. There are also judges that will not agree.

Any motor home can be used for commercial purposes - for example if you use your personal motor home to organize a paid tour across the country for a family. It may be registered to you, but the use is commercial and you'd better have your paperwork (and CDL) in order.

However, just registering a vehicle in the name of the company does not make it a CMV. Especially when the vehicle is not a commercial in nature. I wouldn't try to convince a court that the quad-axle dump truck I'm driving is for personal use, but a motor home with my own family on board is a different story. The law that you quoted says it all:

41 minutes ago, jleamont said:

for the profit of an individual or business

If no profit is being made through the use of the vehicle then it's not a commercial vehicle. Of course, proving that in court will be a totally different story. Like I said earlier, as states crack down on this it's going to get harder to play the game.

[wildebill308]

45 minutes ago, richard5933 said:

If no profit is being made through the use of the vehicle then it's not a commercial vehicle.

That is not true. The vehicle can be operated for a loss as well as the business that owns it. 

 

52 minutes ago, richard5933 said:

However, just registering a vehicle in the name of the company does not make it a CMV. Especially when the vehicle is not a commercial in nature.

I think you should do a little more reading of the law. The simple fact it is owned by a for profit business is all the proof they need.

Bill

[jleamont]

Not all business is for profit, there are many non-profits, they still must follow the laws, and ignorance is no excuse. State laws and not valid once you cross state lines, Federal come in then with a CMV. 

 

[jleamont]

Sadly this is the second time I have heard of this. My DW reminded me of a couple a few years back on Facebook that had a similar experience but it went much worse. 

 They were rear-ended driving down the highway and the responding officer was a DOT officer.  I guess the DW was upset over the situation and began to argue with the trooper due to the coach being registered to a business. They were eventually audited, the husband had his license suspended for operating a CMV without proper licensing and had to pay the taxes back that were avoided and almost $10,000 in fines plus attorney fees. 

It goes back to the age old question that is similar “does my toad need brakes while in tow”. Not understand doesn’t excuse it. You might get away with it your entire RV life, then again you might not.

there is a flip side to this, you use the RV to travel to craft shows and sell trinkets, now the RV is being used for financial gain, it’s a CMV. 

I helped an old boss get charges reduced when his wife was pulling their horse trailer in the Carolina’s with the family’s Lincoln SUV. She was stopped and just won an award at the show. She was cited as a CMV because the trophy had value. Good thing for her the combination didn’t exceed 26,001 lbs or it would have been much worse. Unfortunately she was asked by the LEO, did you win anything, she was honest and it went south from there. 

Given the situation sounds like the OP was respectful to the officer and walked away with the minimum. It certainly could have been much worse. 

[rayin]

What about the RV owners who sell advertising to CG owners in the form of their CG map? What about the RV owners who work remotely out of their RV? See where this is going_. In Indiana farmers who own tractor-trailers to haul grain they produce are specifically exempted from CDL requirements, even though many have a  legal business making money from raising grain.

[BennieH]

"Last September, I  pulled into a rest stop outside Springfield, IL.  Someone knocked on my door and it was the Illinois Dept. of Revenue. "

Illinois has serious money issues and I think you are part of their solution. Your LLC was all they needed to ticket you and the $1000 was felt to be low enough that you'd just pay. Only a lawyer can assist you in this case.

[richard5933]

I know that not all business use results in profit - I was just using that word for convenience. Of course a business can lose money and still own a CMV.

Again, I don't agree with what people do when they register out of state to avoid taxes. But, I think that the law might be technically on their side in some cases even though it might be very difficult to prove it in court and win. Reading online court cases this morning, it appears that there are judgements showing both sides of this. The big question seems to be whether this is tax avoidance (legal) vs. tax evasion (illegal). The answer to that seems to vary from state to state.

There are lots of examples of people using a privately registered RV for business purposes that would make the RV a CMV. Consequences follow if proper registration is not done. However, the default for a privately-owned & registered RV is that it is not a CMV unless something about the situation gives the officer/official reason to suspect something.

The opposite is true of a vehicle owned by a business or corporation. The assumption is that it's used for business and/or commercial purposes, and it will be necessary to provide evidence that it's not being used for business purposes if/when stopped by an officer. It might be difficult or nearly impossible to prove this when push comes to shove.

Can anyone provide me with an example of a definition of a CMV which references who owns the vehicle or in whose name the vehicle is registered?

The initial post was about the IFTA license, which is a whole other conversation and brings its own complications. Here's a piece of the information about this from the Wisconsin DMV:

Licensing

Persons who operate "qualified motor vehicles" are subject to IFTA licensing, reporting and record-keeping requirements unless the vehicle is exempt or a trip permit is obtained as described below.

Qualified motor vehicle - a motor vehicle used, designed, or maintained for transportation of persons or property and:

• Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,797 kilograms; or
• Having three or more axles regardless of weight; or
• Is used in combination, when the weight of such combination exceeds 26,000 pounds or 11,797 kilograms gross vehicle or registered gross vehicle weight. Qualified motor vehicle does not include recreational vehicles.

Recreational vehicles exempt. Vehicles such as motor homes, pickup trucks with attached campers, and buses when used exclusively for personal pleasure by an individual are exempt from IFTA. In order to qualify as a recreational vehicle, the vehicle shall not be used in connection with any business endeavor.

The key here is being able to prove to a judge that the use was personal pleasure by an individual, since the vehicle is owned by an LLC. Again - notice that the RV exemption discusses use of the vehicle, not ownership.

I'm no lawyer, but I'm guessing that's one of the purposes of rental agreements when an RV is rented out - it's still owned by the rental company, but the paperwork demonstrates that it's being used by an individual for personal pleasure and not for business. Otherwise, most larger rental RVs would require an IFTA license and associated paperwork, and I don't believe they do.

[wayne77590]

In regards to the OP, pay the fine just in case you travel through that state again.  If you don't pay the fine there will be a warrant out for your arrest and that can cost you a bundle in the end.

[kaypsmith]

Here is some good reading about the Montana LLC, that most people trying to avoid state taxes need to read. https://rvtailgatelife.com/2019/montana-llc-registering-rv

Not exactly on topic but worth sharing since the subject has come up. Oh yes, I agree with Joe and his assessment. In Alabama, even a passenger car owned by a corporation "Limited Liability Corporation"must display an "X tag", this the CMV designation on the tag. A private vehicle over 26,001# must be driven by a CDL driver unless an Alabama registered RV or used as a Farm to market carrier.

[manholt]

I have a hard time understanding, why anyone who can buy a High End RV, balk at paying the tax.  Especially if you live in FL.!  Pay the fine & pray that that's, the end of it.  It's easy to get the plates and a LLC...how you now undo it, I don't know, but don't forget your check book!

[rayin]

On 5/18/2019 at 9:48 PM, manholt said:

I have a hard time understanding, why anyone who can buy a High End RV, balk at paying the tax.  Especially if you live in FL.!  Pay the fine & pray that that's, the end of it.  It's easy to get the plates and a LLC...how you now undo it, I don't know, but don't forget your check book!

I agree, same with hunting cheap fuel. For those talking about tax avoidance, remember that is legal. Tax evasion is NOT legal.

[ispjs]

I won't even comment on having an LLC and Montana plates on a big coach.  I fully understand why some folks believe it is a good idea.  My BIL bought a new DP a few years ago after they moved to Arizona.  I think his first couple years of registration fees were over $2,000 per year.  There are all kinds of tax considerations that make folks take advantage of perceived loopholes.  

What I will say is that when you get cited from Illinois authorities and you blow it off there will be a warrant issued for your arrest.  Now you may stay out of Illinois and avoid that arrest and avoid paying up for awhile.  However, be aware that they have agreements with most other states that could effect you in other ways.  For example, maybe that warrant from Illinois is entered into the national computer and they have agreed to come and get you from all neighboring States if they come across you.  So you could be in one of those 5 or 6 states and an officer could run your plate and bam......off to jail you go.  

Also, if you blow it off they will probably end up entering a conviction.  There are certain offenses where they will send the information to your home state where you are licensed in and that state will count points against your driver's license, or for some violations will even suspend your drivers' license.

Right or wrong, the OP needs to take care of this ASAP or there will be future issues that probably won't be pleasant.

My suggestion for anyone else under the exact same circumstances in Illinois would be to politely ask the revenue agent to contact an Illinois State Trooper to respond to the scene.  All of their troopers are certified under the federal guidelines to do commercial enforcement and he/she could explain the appropriate law.  The responding trooper would not be looking to load an innocent unknowing out-of-state RVer up on additional tickets IMHO.  The fine money from  citations that Illinois Troopers write go directly to the local county they are in at the time, and not the state coffers.  

[manholt]

It's nice to have a retired State LEO from Illinois, on this Forum!  Thanks for clarifying...If I was OP, I'd  move to Bimini in a boat... 

[wayne77590]

Seems like the OP's first post is going to be his last post. Oh well!

[manholt]

I guess reality & truth, hurt.  Just hope he takes care of the matter, before it gets out of hand.

[manholt]

For what it's worth.  Found out this week, there are a few changes in the Montana Law!  LLC is now $2,000 + $200 a year, also any RV, over $300,000 in value, will be charged a Luxury Tax..minimum $1,200 per year!  They are not going by, "what you paid", but by List price!  

We have 2 coaches with Montana Plates in our Group, they are full timers and get mail from Escapee's in Livingston, TX.  DL is Texas also...they are legal in all states.  They are keeping their LLC, but the coaches and toads, will be registered in Texas by years end.  

[wayne77590]

I don't want to bust bubbles but a weight rating o 26,001 pounds or more is considered a commercial vehicle by Federal Law. Now,  having said that, states have "exemptions" when it comes to some vehicles like motorhomes. But they are, by Federal Law still commercial vehicles. That is why in Texas a requester of a Class A or B license for a vehicle over 26,001 pounds has to fill in a CDL-2 form.

Search on Texas CDL-2. Yes, I know, RV's are exempt and that is the purpose of the CDL-2.

[manholt]

Wayne, what's Texas got to do with what I posted ?

The brothers got their CDL so they would know what to do in a 45 foot DP, biggest vehicle they had for 38 years, was a Company car! Retired Oil Field Trash...like me!

[richard5933]

Doesn't a vehicle have to be used in interstate commerce in order for the Federal definition of 'commercial vehicle' to apply? A privately-owned motor home, no matter how heavy, would not meet the Federal definition of a commercial vehicle unless it was being used in commerce (such as selling crafts at shows). On the flip side, a vehicle with a GVWR far less than 26000 could easily be considered a commercial vehicle if it's used in interstate commerce.

The fact that the motor home in the original posting was licensed to an LLC is why the tax official considered it a commercial vehicle subject to the IFTA requirements. Sounded like the assumption was that any vehicle registered to a commercial operation was by default a commercial vehicle absent positive evidence to the contrary.

The question of which drivers license is required is a red herring in this conversation. There are many vehicles used in interstate commerce which are considered a commercial vehicle be Federal definition and do not require a CDL. And, those states which do require a class B license for larger motor homes specifically do not require a commercial license, but they often use the CDL testing and/or study materials since they have the same content and allows them to save money by not publishing a whole new set of materials.