Patrol: Up to 14,000 drivers have registered cars out of state
BY CLARENCE MABIN / Lincoln Journal Star
Nebraska is losing $11 million annually because thousands of drivers are improperly registering their vehicles or paying sales taxes in Iowa and South Dakota, state officials said Wednesday.
More than 14,000 Nebraskans have potentially registered their vehicles illegally in the two border states, officials said at a news conference announcing a more than two-month investigation of what could amount to widespread tax evasion.
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“Noncompliance with motor vehicle registration laws is not a victimless crime,” said Beverly Neth, director of the Department of Motor Vehicles.
“When individuals make a choice to register their vehicles in other states, then the law-abiding taxpayer is the victim.”
Motor Vehicles, the Nebraska State Patrol and the state Department of Revenue are conducting the investigation, which, so far, has generated a list with roughly 14,000 names and one person charged.
“These residents need to be aware they are costing the state of Nebraska millions of dollars in lost revenue, and our investigators are actively pursuing those who choose to violate these laws,” Patrol Col. Bryan Tuma said.
Typically, improperly registered vehicles subject owners to misdemeanor penalties. But motorists who register or title their vehicles in a deliberate attempt to avoid taxes could be charged with a fourth-class felony and, possibly, face prison time.
Tuma said the investigation was ongoing and no decisions have been made on how many of the 14,000 should be contacted, and if so, how.
He encouraged motorists who have skirted the statutes to voluntarily comply with them.
A first step in the process, he said, is for motorists to contact their county treasurer. Residents who voluntarily comply will likely not be subjected to prosecution, he said.
“If they come in, pay their back taxes, we will probably not” investigate, he said.
“Our effort is not to make arrests en masse. This is not our goal.”
The annual estimate of $11 million included revenue lost from motor vehicle taxes and fees and lost sales tax revenue.
Motor vehicle taxes are assessed at the initial registration and then yearly, according to a fact sheet distributed at the news conference. Twenty-two percent of the revenue goes to counties, 60 percent to schools and 18 percent, generally, to cities or villages.
Other motor vehicle fees, such as the registration fee, help fund highways.
About 48 percent of motor vehicle sales tax revenue is distributed to the Department of Roads. Cities and counties receive about 25 percent of the total. Less than 1 percent goes to a bridge fund.
Compared with Nebraska, Iowa has only slightly cheaper costs, but South Dakota’s motor vehicle taxes are substantially less, officials said Wednesday.
Of the 14,000 residents who potentially illegally registered their vehicles, about 9,000 did so in Iowa, Neth said. The rest registered in South Dakota, she said.
Most of the residents live in or near Lincoln and Omaha, officials said.
Neth said for years she had heard anecdotal accounts of Nebraskans registering vehicles in other states. But the investigation didn’t begin until November, apparently spurred by several circumstances.
A fraudulent titling case in Douglas County in 2006 got officials thinking about the problem. And Neth’s Iowa and South Dakota counterparts told her — perhaps at a conference, she said — they were collecting Social Security numbers in a database.
Officials decided to cross-reference Social Security numbers of Nebraska drivers with Social Security numbers on file in Iowa and South Dakota, she said.
The result: 14,000 names.
Neth was hard pressed to come up with any valid reasons for the out-of-state registrations.
Arguments that state taxes and fees were too high don’t fly, she said. “I don’t have the ability to lower fees and taxes,” she said. “They are what they are.”
A Lincoln doctor was the first, and so far, only person charged as part of the investigation.
Dr. Matthew M. Glenn received diversion services earlier this month. He had been charged on suspicion of failure to pay Nebraska sales taxes on a 2005 Porsche. Glenn allegedly paid taxes on the car in South Dakota.
Reach Clarence Mabin at 473-7234 or cmabin@journalstar.com.

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make them pay wrote on April 16, 2008 11:23 am:
Justice wrote on April 16, 2008 11:26 am:
Evasion wrote on April 16, 2008 11:26 am:
Bottom line is it's tax evasion. Felony charges seem a bit extreme. But they should definitely have to pay the appropriate taxes and receive a stiff fine. "
D.A. wrote on April 16, 2008 11:26 am:
We can then start right here in Lancaster County and get the slackers that for some reason get away with registration outside the county, yet the car is parked in a driveway or workplace and spends nearly 100% of its time in Lancaster County. I pay my taxes and registration legally, so can everyone else. I'm tired of people who seem they need to cut corners to "get over" on the system....let's have law enforcement go get 'em. "
Neener Nina wrote on April 16, 2008 11:28 am:
What does that say? wrote on April 16, 2008 11:29 am:
Why wouldn't wrote on April 16, 2008 11:29 am:
brotherwild wrote on April 16, 2008 11:33 am:
Amnesty wrote on April 16, 2008 11:35 am:
"
DUH? wrote on April 16, 2008 11:41 am:
Good luck wrote on April 16, 2008 11:41 am:
If they were able to get away with that for almost 30 years, how are they going to catch all the "out-of-state" cheaters? "
It figures wrote on April 16, 2008 11:46 am:
"
Buster wrote on April 16, 2008 11:55 am:
Are you serious? As if it's every citizens top priority to fork over as much money as possible to the state. I would guess the reason people do this is to save money, the insane amounts of cash it takes for the tax and registration every year in this state is absurd. A wheel tax? Luggage rack tax? Give me a break, that money is allegedly collected for road maintenance but they obviously don't spend it on road upkeep, see the article about dipping into other funds to pay for roads. It's just another disguised tax on the already over taxed people of the state/county/city. I'd never even heard of a 'Pet tax' until I came to Lincoln 15 years ago and initially thought it was a joke that Lincolnites had to pay a tax for their dog/cat, it's insanity! No different from traffic tickets, just another way to generate revenue (aka: hidden taxes) for the state to mismanage and blunder away. Seriously, who's the victim when someone drives 59mph in a 55 zone? Then when there is an orange cone on the side of the road within 50 miles, that fine magically doubles in the name of 'safety for the road construction workers' even though there isnt a person working anywhere in sight. High taxes are the reason most college grads are leaving the state along with several businesses and the reason new businesses won't come here. Even when the Governor tries to control a portion of yet another tax hike, this time it's the fuel tax he's met with resistence. They argue that 'it's only a penny or two' but that's the arguement everytime! After a few years it becomes 10 cents per gallon, then twenty and now it'll be about 30 cents per gallon we pay to the state in taxes per gallon of fuel on top of insane property tax rates, vehicle registration fees and taxes, pet taxes, high fuel taxes, sales tax, corporate taxes and the list goes on forever. It's no wonder the state is basically a sinking ship. "
CS wrote on April 16, 2008 12:09 pm:
CS wrote on April 16, 2008 12:11 pm:
Erik wrote on April 16, 2008 12:13 pm:
DBR wrote on April 16, 2008 12:17 pm:
Lee Martin wrote on April 16, 2008 12:23 pm:
Julie wrote on April 16, 2008 12:23 pm:
One who knows wrote on April 16, 2008 12:28 pm:
For Why Wouldnt, there is no such thing as dual residency when talking about state taxes. "
Mathematically Challenged wrote on April 16, 2008 12:30 pm:
db wrote on April 16, 2008 12:32 pm:
Anti-Tax wrote on April 16, 2008 12:40 pm:
se wrote on April 16, 2008 12:41 pm:
You desire to live in the state of Nebraska for some reason, though you think you don't need to pay the price. If it is that horrible, then move out of the state. "
state huggers wrote on April 16, 2008 12:46 pm:
I Love Nebraska.........BUT!!!!!!! wrote on April 16, 2008 12:48 pm:
John wrote on April 16, 2008 12:49 pm:
Robin Hood wrote on April 16, 2008 12:49 pm:
the incentive to license elsewhere. The fact is Nebraska taxes are extremely high and border states are reaping windfall revenue due to
legislative stupidity. "
T wrote on April 16, 2008 12:53 pm:
I like Dr. Glenn, but he can certainly afford to license his car here. "
Outside City Limits wrote on April 16, 2008 12:56 pm:
Kevin wrote on April 16, 2008 12:57 pm:
I think the vehicle taxes in this state, and particularly Lancaster county are outrageous. But I pay them because it is the law.
If the 14,000 people who decided to break the law instead voiced their concern in accordance with the democratic process, maybe we'd actually see some real change. But until then, those who obey the law will continue to bear the financial burden imposed upon them due to the crimes of others.
We can't seem to stand it when it happens with corporations, so why are we content to let it slide with individual citizens?
"
Big deal wrote on April 16, 2008 1:00 pm:
live in Nebraska and greedy higher taxes brings more and more dishonesty
and crime. Nebraska is the only state that does NOTHING for its citizens
tax wise. Look it up if you want to know! If the tax was collected they'd
still raise taxes, thats all they know or WANT to know! "
HIghTaxes wrote on April 16, 2008 1:00 pm:
Do you people who think Nebraska has a high taxes realize that many neighboring states actually have higher income taxes and some cities there actually have a city income tax where you pay city taxes according to your income and others have an "occupation" tax where each individual pays a certain amount each year for the priviledge of living in that city?
If everyone would pay their fair share instead of trying to evade taxes everyone's taxes would go down. But some do whatever they can to avoid taxes and that drives up everyone elses taxes. "
salty dog wrote on April 16, 2008 1:09 pm:
Dee wrote on April 16, 2008 1:12 pm:
redheaded stranger wrote on April 16, 2008 1:25 pm:
Jay Coen wrote on April 16, 2008 1:26 pm:
another point of view wrote on April 16, 2008 1:26 pm:
Lisa wrote on April 16, 2008 1:44 pm:
common sense wrote on April 16, 2008 1:50 pm:
Where did they get 14K? wrote on April 16, 2008 1:54 pm:
They also identified 3,000 other drivers who have moved to Nebraska but not registered their vehicles in a timely manner. "
Tara wrote on April 16, 2008 1:55 pm:
Douglas wrote on April 16, 2008 1:55 pm:
Blindly following tradition for the sake of tradition is poor government. More roads made a lot of sense when the populatio was increasing. It is time for a fundamental change of thinking and spending. "
Nebraska charges too much wrote on April 16, 2008 2:00 pm:
duh wrote on April 16, 2008 2:25 pm:
annoyed wrote on April 16, 2008 2:41 pm:
Heather wrote on April 16, 2008 2:43 pm:
Dano wrote on April 16, 2008 2:45 pm:
The grass is always greener on the other side of the state line, until you really live there and look at it. It is not like we are a TX or CA or FL. States with similar populations basis, have similar tax base and revenues, it just is more visible from when you see it on your property than when you pay for each time in little transactions like sales or it comes when it comes from your paychecks because it just another "FICA-like" deduction. If they lowered property taxes, they would have to raise taxes on something else and you would complain there too. No one likes to pay taxes, but everyone wishes people were treated equally.
For those who are in school from out-of-state, they aren't really residents. They will register at home because generally their folks take care of it unless they want to take up residency here for lower tution rates. For those that commute in, that is where they reside when not at worrk, so they should register there. But, for those who cheat it, you deserve what you get. There should be relief only for those who self report, register here when your current registration expires of face full punishment. Those who don't self report and get caught, too bad, you broke the law knowing it could happen. No different than speeding to me. And a high enough amount, felony awaits, only remember you brought it on yourself. I pay my share, I have no sympathy for anyone who doesn't. "
New tax idea wrote on April 16, 2008 2:53 pm:
Yeah wrote on April 16, 2008 3:29 pm:
that will show my itty bit of income from Nebraska was double what I paid
in my resident state. My parents little frame house taxes were several times more than my bigger all brick and huge yard home. I was shocked to say the least! I'm also finding, what was a prepared comfortable living
has become very uncomfortable and even scary in retirement in Nebraska.
As soon as I can, I will leave. "
It's no wonder! wrote on April 16, 2008 3:34 pm:
Norfolk wrote on April 16, 2008 3:46 pm:
I don't get where all of the money goes either with how bad most of the roads are. "
Cowboy wrote on April 16, 2008 4:00 pm:
OmahaAnnie wrote on April 16, 2008 4:33 pm:
Check out http://www.fhwa.dot.gov/ohim/tollpage/t1part3.htm
to actually see how better off we are in the long run. "
d wrote on April 16, 2008 4:50 pm:
No mercy wrote on April 16, 2008 4:50 pm:
It is always so rewarding to see a Dr. break the law and save some money. I'm assuming he is okay with his patients not paying him the full price too? SHAMEFUL Dr. Glenn. "
wndr wrote on April 16, 2008 5:01 pm:
Dee wrote on April 16, 2008 5:02 pm:
Bob wrote on April 16, 2008 5:06 pm:
You want to get those that are sticking it to the state of Nebraska, go after all of those high net worth individuals and families who are claiming a primary state of residence outside of Nebraska (only takes being at another residence 185+ days in another state to do so, at least legally). If you want to talk about lost taxes, you need to look at those who make the biggest splash in the pond. Car registrations is petty in comparision. BTW, this will only be getting worse... "
Do You wrote on April 16, 2008 5:23 pm:
whatever wrote on April 16, 2008 5:30 pm:
Jim wrote on April 16, 2008 5:37 pm:
EX Nebraskan wrote on April 16, 2008 5:57 pm:
I left that stipidly high taxed state several years ago and and thought I would someday move back. Not so, now, with the crazy high car and truck licence and property tax, I shall live somewhere else that has much lower taxes. Won't be hard to find such a place either! Nebraska is a good place to be from, FAR from! "
Michael wrote on April 16, 2008 5:58 pm:
In my line of work, I can live anywhere...Nebraska will lose my tax revenue because they are out of line when it comes to registration taxes and even payroll taxes for that matter. It is their loss...maybe they shouldn't be so gd greedy. "
NY'r wrote on April 16, 2008 6:01 pm:
Michael wrote on April 16, 2008 6:07 pm:
NE is crazy wrote on April 16, 2008 6:21 pm:
Catch me if you can wrote on April 16, 2008 7:04 pm:
Cammie wrote on April 16, 2008 7:15 pm:
Matt Poulsen wrote on April 16, 2008 7:23 pm:
me wrote on April 16, 2008 7:36 pm:
Now all you thinking their actions are justified, are you okay with the fact that about 1% of your tax bill is completely related to these deadbeats not paying?? "
Ed wrote on April 16, 2008 7:57 pm:
janie wrote on April 16, 2008 8:02 pm:
BC wrote on April 16, 2008 8:54 pm:
Interesting wrote on April 16, 2008 9:20 pm:
Get a Plate wrote on April 16, 2008 9:33 pm:
About Time!!!! wrote on April 16, 2008 10:22 pm:
Clay wrote on April 16, 2008 10:30 pm:
coydog wrote on April 16, 2008 10:35 pm:
For you tax complainers. I've had it. If you don't want the services provided in the US (roads, police, schools, safety, rights), then by all means leave. As citizens we demand services (roads, police, schools, retirement income and health care, safety standards) from our government, so we get to pay for it! There is no free lunch. Our forefathers did not move here to avoid taxes, they moved here to have a voice in the taxes they paid and that they would be used to the benefit of the people. The world doesn't owe you a living. Get over it like the rest of us. If you don't like what goes on in government, VOTE. Yeah, go look at the percentage of Nebraskan's who vote in elections...now there's a noncompliance rate!
"
Why our taxes are high wrote on April 16, 2008 11:03 pm:
jill wrote on April 16, 2008 11:31 pm:
other taxes and cross references? wrote on April 17, 2008 1:40 am:
As for sales taxes being lower in IA and SD, nope. IA's is 5%, and SD's is 4%. While we're at it CO is only 2.9%, WY 4%, and KS is close to us a 5.3%. Though SD and KS don't exempt food. At least according to http://www.taxadmin.org/FTA/rate/sales.html. "
byob wrote on April 17, 2008 3:54 am:
Todd wrote on April 17, 2008 5:35 am:
Missouri wrote on April 17, 2008 6:17 am:
Know what gripes me? wrote on April 17, 2008 7:21 am:
Criminal wrote on April 17, 2008 7:36 am:
If Bill Gates or Warren Buffett sudeenly decided taxes were too high in the U.S. and registered as residents of Outer Mongolia to avoid paying any U.S. income tax, would you complain? It's the same thing - lying to defraud the government (or, more correctly, your fellow taxpaying, law-abiding Nebraskans).
I am sure you folks wouldn't have a problem with people who lie in order to get extra welfae benefits. It's the same thing - lying to defraud the government (or, more correctly, your fellow taxpaying, law-abiding Nebraskans).
I suggest that anybody who has registered their car out of state be removed from the voter registration rolls since they (ahem) are not residents of Nebraska. Anybody in this group who has kids attending LPS ought to be charged full tuition since they (ahem) are not residents of Nebraska. Same with any state college or unviersioty - charge their kids out-of-state tuition. Maybe the Revenue Department should stop payment on any state income tax refund these folks would receive this year since they (ahem) are not residents of Nebraska.
Lying is lying, cheating is cheating, crime is crime. Plain and simple. Maybe you missed that lesson in kindergarten. "
Bill wrote on April 17, 2008 7:46 am: