False Claims of Oregon Residence

Tuesday, November 7, 2017

    It is not uncommon for people to falsely claim to be residents of Oregon.

    This has nothing to do with one’s legal status in the USA.

    There are many reasons to falsely claim residence.  One of the most common is in order to register a car or RV in Oregon, saving sales tax in some other state.  Similarly, if a person actually lives in a state where personal property tax is significant, this can be a reason for falsely claiming residence in Oregon.

    As an example, if a person buys a $40,000 car in Colorado, and registers it there, he or she will have to pay significant sales tax.  In Colorado Springs, the total sales tax rate is 8.25 percent.  This means the sales tax on a $40,000 car in Colorado Springs in 2017  would be $3,300.

    As another example, there are states where, instead of charging significant amounts of state income tax, states fund themselves in part through personal property taxes, which can be a significant amount per year for a luxury car, or an expensive RV.  In Arlington, Virginia, for example, one would pay $1,610 per year on a $40,000 car in 2017, and $10,000 per year on a $200,000 motor home.

    Falsely claiming residence in Oregon, and registering a car here, can have all sorts of negative consequences.

    First, and most commonly, this can lead to charges of tax fraud - and it is important to remember that tax fraud is what the authorities finally got Al Capone on.

    It is not unlikely that one will be caught in this kind of tax fraud, either.

    If one annoys a neighbor or a co-worker, it is very easy for this neighbor or co-worker to call in a report to the authorities.  

    Even if a co-worker or neighbor is not annoyed by anything else, they might be annoyed by the fact that they are paying their taxes, but someone who improperly registers their car in Oregon is not paying their fair share of state taxes.

    In addition, if a driver is pulled over, and supplies a driver’s license and/or registration and/or insurance with false addresses to police, the driver can find himself or herself in serious trouble.  It is not unlikely that an officer would discover this issue, either, even if all of these three documents show the same home address in Oregon.  Officers commonly ask where someone is going when they are pulled over, and if the answer seems to indicate that the person lives and works in the jurisdiction where they are, but they claim an address in Oregon, this can cause an officer to pursue the matter further.

    In addition, there is always the risk that there will be a car accident.  If it is a bad accident, and the insurance company stands to have to make a significant payout, the insurance company will have good cause to investigate ways in which it may be able to avoid this payout.  The fact that there was fraud in applying for (or retaining) insurance coverage could well invalidate the insurance.

    This, of course, could have consequences that might be even more serious than the financial consequences of mere tax fraud.

    There is also the issue that Oregon has an approximately 10 percent income tax, so if the individual is in receipt of income of any sort, including capital gains, and including retirement income, the person who claims Oregon residence for purposes of registering a vehicle in Oregon had better be filing and paying income taxes in Oregon.

    The fact that someone still owns property in Oregon, grew up in Oregon, and/or intends to return to Oregon at some point in the future is usually not a defense to the act of improperly registering a vehicle in Oregon.

    Further, the failure to update a driver’s license can also have serious consequences, not least of which may be suspension of that driver’s license - which the driver might not even know about, but which will surely show up as an additional charge if the person gets a ticket that bounces from the former address, for example.

    Driving on a suspended license can result in warrants.  A suspension can also result in very expensive insurance consequences, even after a valid driver’s license is re-obtained.

    While there often are exemptions for a variety of individuals, including military members, students, and sometimes people who are on temporary medium term work assignments from an Oregon employer, if one does not fit into one of the exemptions allowed by whatever jurisdiction they are living in, the consequences of falsely claiming Oregon residence, and improperly registering a vehicle in Oregon can be significant.