One popular scam is to buy a manufactured trailer, insure it, then remove the VIN and report it as stolen. Re-branding it as a homemade trailer with a new license plate can be as simple as filing bogus paperwork with another state.
Melancon did this recently to prove his point. He applied from Virginia for a Maine trailer license with a fabricated VIN (ST467OL499EN17I99AM). For a $50 fee, he received his license plate in the mail with official documentation. Apparently no one noticed the message hidden in the VIN if you remove the numbers: STOLEN I AM.
Connecticut officials have complained in recent weeks about the number of personal vehicles Connecticut residents have registered in Maine to avoid paying the property taxes they owe their cities and towns.
But it turns out, many more Maine-registered trailers than cars are from away — and Missouri is the most common out-of-state home.
Maine runs a brisk trailer-registration business that thrives from the same rules that make Maine an appealing auto registration destination. Namely, it’s cheaper and easier to register a trailer — from the boat trailer you two behind your car to fleets of commercial truck trailers — in Maine than in many other states. And there’s no requirement that the person or entity registering the trailer be based in Maine.
The Secretary of State’s office says trailer registrations bring in $6 million-$15 million annually for Maine’s Highway Fund.
There are 1.15 million trailers registered in Maine, and more than 354,000 — almost 31 percent — are registered to people and entities outside of Maine.
In 2013, Maine’s trailer practices attracted the ire of motor vehicle officials in Delaware, who said vehicles hauling Maine-registered trailers were responsible for a fifth of that state’s unpaid tolls in 2012 — $300,000 out of $1.5 million.
According to the Maine Bureau of Motor Vehicles, some 5,360 trailers registered in Maine are the property of Delaware people or entities, making Delaware the 16th most common legal home to Maine-registered trailers from out of state. Connecticut, with 7,757 Maine-registered trailers, ranks 14th.
The most common out-of-state home for trailers registered here in Maine? Missouri, with 76,801 Maine-registered rigs.
Check out the graphic above to find out which other states are responsible for Maine’s trailers from away. And here’s a top 10 list, compiled from data provided by the Maine Bureau of Motor Vehicles.
Depending on where you're driving in Connecticut, you might think a lot of people from Maine moved to the state. The NBC Connecticut Troubleshooters have discovered that in some areas, there seem to be a large number of Maine license plates on cars and SUVs.
Chief Investigative Reporter Len Besthoff says it's all about following the money.
We've often heard about wealthier people from Connecticut registering vehicles in nearby states like Vermont or New Hampshire, where they have vacation homes.
This Maine phenomenon is a bit different, and we asked drivers about their Maine plates.
Besthoff: Are you from Maine?
Driver: No, my sister is. My daughter is.
Besthoff: Where in Maine?
Driver: I don't know where she lives.
Here's how another conversation went:
Besthoff: Are you from Maine?
Besthoff: What do you have the Maine plate for?
Driver: You're allowed to. If you live in another state, you can register your car in Maine.
Windsor Police Officer Russ Winninger said he's pulled over more than a dozen people with Maine plates recently. Another officer in East Hartford has written up two dozen.
“I just happened to see a big influx of Maine marker plates on vehicles, which was unusual," Winninger said. "And so it kind of piqued my interest why they were starting to pop up all over the place."
Winninger explained that most are avoiding high city and town car taxes required to receive a Connecticut registration and license plate. Others have told Winninger they got Maine plates because they are behind on their local car taxes and could not get their Connecticut registrations renewed.
Police said Connecticut residents obtain Maine plates either online or through the mail.
“The person I initially started this with brought me and showed me the website he used," Winninger added.
Vehicle owners can contact a handful of third-party vendors who mostly handle truck and trailer registrations. For several hundred dollars in fees and local excise taxes, the vendors will walk your registration through, even listing your legal residence as Connecticut on the paperwork.
Driver: It's all legitimate.
Besthoff: Are you sure?
Driver: Absolutely positively sure. They even have my title. They have my address and everything.
Sure enough, that's essentially what the Maine Bureau of Motor Vehicles said too.
“We have lots of out of staters registering here, as it is not illegal in Maine for someone from Connecticut to register here. It's a violation in Connecticut however," a spokesperson told the Troubleshooters in a statement.
The Connecticut Department of Motor Vehicles said there's not much it can do.
“People know when they are registration scofflaws. They are illegally circumventing our registration laws and denying towns and cities the property taxes legally owed to a municipality. Other states should not condone this action. Finding scofflaws is very difficult because their out-of-state license plates look like any other that is legally here from another state," said Connecticut DMV spokesman William Seymour.
Seymour added that the DMV is working with the Connecticut Association of Assessing Officers to inform town assessors of out-of-state vehicle registrations.
Connecticut Conference of Municipalities President Matthew Galligan isn't buying the explanations from the DMVs in Connecticut or Maine.
“I just can't believe you can sit back and do nothing when we have a whole legal staff up at the state," he said. "It's definitely fraud."
Galligan said the losses can add up fast for cash-strapped cities and towns that are already making tough choices on the services they provide.
“If you take a car that's worth $40-50,000, $60,000, and you're losing $1,000 in taxes, and you got 60 or 70 of those cars, it's a substantial amount of money," he said.
Galligan explained that until someone from the state puts a lid on the out-of-state plate issue, Connecticut's towns and cities will potentially lose thousands of dollars, money essentially stolen by the state of Maine.
“It's a home run for them. It's a huge money maker for them, because they can grab all these fees, all this revenue, and not provide any services to those people," he said.
One of the drivers we spoke with said, “Look around you'll see a lot of people with Maine plates. They're supposed to stop it. I kid you not."
While you still pay some taxes in Maine, if you register there, there’s a difference.
We obtained a Maine registration that says the owner of a 2007 Nissan Pathfinder paid $100 in taxes. Had it been properly registered in Hartford, where it's garaged, the taxes would have been $600 more. So as you can see, the losses for a town or city can add up quickly.
"Municipalities should use their enforcement powers to monitor reports of violations and then issue a summons to any Connecticut resident flouting our laws," Seymour said.
Drivers who receive a summons for illegally registering their vehicles out of state could face a fine of up to $1,000.
Police and municipal officials in Connecticut are miffed that residents who owe property taxes are registering their cars in Maine to escape their debts. In Delaware, state officials are frustrated because they can’t collect unpaid tolls traced to Maine-registered trailers.
In a country where states do what it takes to be competitive, what’s clear is that Maine has found a competitive advantage that’s driving some other states crazy. A combination of low fees, convenience and rules that are lax in comparison with other states’ have effectively made Maine an auto registration haven.
Not quite an offshore tax haven, but it’s something.
Police in Connecticut say they’re noticing an uptick in residents driving around with Maine plates. They’re not Mainers flocking to the Nutmeg State for a brief winter reprieve. The Maine-plated cars, according to police, are driven by Connecticut residents who garage their cars in Connecticut.
Connecticut law bars drivers from registering their vehicles if they have unpaid property taxes. The way around it? Register your car in Maine. It doesn’t even require a trip north, just the proper documents, an online agent, and the required fees.
The source of friction? Under Maine law, it’s completely legal to register a car in Maine even if you’re not a Maine resident. But in Connecticut, registering your car in Maine is a legal breach. (Maine law, for what it’s worth, doesn’t work the other way around, either. It’s against state law for Maine residents to register their Maine-based cars in other states.)
Officials in Delaware have tried to bring attention to a similar plight. In 2013, Delaware’s Division of Motor Vehicles highlighted the fact that many of the vehicles flouting Delaware tolls had Maine-registered trailers in tow. Unlike Delaware, Maine doesn’t require that a person registering a trailer in the state be a resident. And since Delaware and Maine don’t have a toll collection reciprocity agreement, Delaware authorities can’t pursue the owners of Maine-registered trailers for their unpaid tolls.
As it turned out, according to the Delaware Division of Motor Vehicles, vehicles with Maine-registered trailers in tow accounted for a fifth of unpaid tolls in 2012 — $300,000 out of $1.5 million. Delaware residents could save $18 per 2,000- to 5,000-pound trailer if they registered in Maine, where the registration costs $22 to Delaware’s $40. Again, it was legal under Maine law but a violation of Delaware statute. According to the Maine Bureau of Motor Vehicles, the owners of some 5,360 trailers registered in Maine have legal addresses in Delaware.
According to the secretary of state’s office, Maine takes in $100,000 annually in out-of-state vehicle registration fees; towns and cities take in another $350,000 in excise tax. In recent years, trailer registrations — both in-state and out-of-state — have brought in $6 million to $15 million.
Those sums, however, pale in comparison to the nearly $900 million in revenue Delaware collects as a result of the competitive advantage it holds over other states and is eager to exploit. That’s Delaware’s status as a corporate tax haven, where it’s cheap and easy for corporations to register holding corporations through which they can funnel revenues and avoid taxes in the state where they’re actually conducting business. Delaware law encourages this by not levying corporate tax on Delaware corporations’ income from business not conducted in Delaware.
The practice has deprived the states where those companies are actually conducting business $9.5 billion in tax revenue over the course of a decade, The New York Times reported in 2012.
Just as Maine’s competitive advantage attracts a few bad apples — tax and toll evaders — Delaware’s does, too. Investment schemers, foreign arms dealers and lobbyists implicated in corruption schemes have set up Delaware shell corporations.
Maine’s competitive advantage is much less lucrative — and much less damaging — than the competitive advantage claimed by one of the states complaining about Maine’s lax auto and trailer registration laws.
What does that say about Maine’s competitive advantage? It would be a much better bet for the state to foster a more substantial one. A world-class workforce, for example.
AUGUSTA, Maine — A few months ago, a veteran police officer in Windsor, Connecticut, noticed something strange on the streets of his community — a lot of cars with Maine plates.
What he discovered was a scheme by Connecticut drivers to avoid paying local property taxes by registering their vehicles in Maine through the state’s online system.
Drivers in Connecticut cannot register their car if they owe property taxes, according to Officer Russ Wininger of the Windsor Police Department, a community just north of Hartford.
“It flags you so you can’t register your vehicle,” he said.
To skirt the law, police are finding drivers in Connecticut who register their cars in Maine instead, via online, third-party services.
“They send in the payment, power of attorney and the little release form, and these companies send out marker [license] plates,” Wininger said. “It may be legal in Maine, but in Connecticut, it’s against the law. It’s a $1,000 fine.”
And it seems to be popular. There are more than 1.5 million cars, trucks, buses, trailers and motorcycles registered to Mainers. Of the approximately 2,400 out-of-state motor vehicles registered in Maine, according to Secretary of State Matthew Dunlap, just over 900 — close to 40 percent — have a mailing address in Connecticut.
“It’s not a huge number, but it’s a burr under their skin,” Dunlap said about officials from Connecticut and other states. “We’ve talked about this. We do it as a convenience for people who have a summer property here and keep a vehicle here and register their vehicles here.”
For Connecticut officials, this system is more than just a nuisance. They know about the registration scofflaws but have a hard time tracking them down, according to Bill Seymour, spokesman for the Connecticut Department of Motor Vehicles.
“They are illegally circumventing our registration laws and denying towns and cities the property taxes legally owed to a municipality,” Seymour said. “Other states should not condone this action. Finding scofflaws is very difficult because their out-of-state license plates look like any other that is legally here from another state.”
When found, not only do the registration offenders get a ticket from police for illegally registering their vehicles out of state, they also are reported to their local assessing departments, which can take further action, Seymour said.
“Municipalities should use their enforcement powers to monitor reports of violations and then issue a summons to any Connecticut resident flouting our laws,” he said. All cars garaged in Connecticut for more than six months must be registered in that state, the spokesman said.
Wininger said he recently stopped a person, driving a car with a Maine license plate, who owed more than $4,000 in back property taxes. Those debts add up for communities, the officer said.
“I don’t know what is going to happen down here,” Wininger said. “The best solution is for your state to stop doing it.”
It’s not hard to understand why Maine continues to offer the service.
Maine receives about $100,000 annually from out-of-state vehicle registrations and an additional $350,000 in municipal excise tax, Dunlap said. The state also receives revenue for vehicle titles and a small amount from sales tax.
The state doesn’t actually run the online registration, which was established more than two decades ago in order to register fleets of interstate commerce vehicles, Dunlap said.
Per state regulations, third-party agents offer the service. The biggest agents in Maine are the Staab Agency of Jefferson, Haskell Registration of Augusta and Maine Motor Transport Association Services Inc. also of Augusta.
The agents for the Maine Department of Motor Vehicles also register trailers — big rigs and smaller rigs hauled by personal vehicles — which in recent years has brought in between $6 million and $15 million in revenues, Dunlap said.
“We register fleets of tractor-trailers,” Dunlap said. “Other states hate it, but trucking companies love it. It’s not just cheap, it’s a huge convenience for tractor-trailer companies.”
The online service allows companies to process anywhere from one to 100 registrations at a time, with vehicles for one year and trailers from one to 12 years, according to Brian Parke, Maine Motor Transport Association president and CEO.
The Augusta company handles mostly tractor-trailer registrations, with a few Maine-based vehicle fleets and a small number of out-of-state personal vehicles, he said.
“It’s very inexpensive and convenient to do this in Maine,” Parke said. “[Those registering vehicles] need [to provide] proof of ownership, obviously, a copy of the power of attorney form because [third-party agents] can’t do work on behalf of someone without one, and you also have to have a release form as well.”
The release form, which is provided on each of the agent’s websites, states the person registering a car or trailer in Maine acknowledges “they understand that the laws in their home state may require them to register the vehicle(s) there” and that Maine agents cannot be held accountable.
To register in Maine, vehicles or trailers from model year 1995 or newer must be titled in Maine, which is another service the agents offer. Sales and excise tax also need to be paid, if not already paid to the registrant’s home state.
The simple applications are available at each of the agents’ websites. Those registering trailers fill out their name and pertinent information — the vehicle make, model and vehicle identification number — and select the registration years. Those registering vehicles can provide basic information online or call for a quote.
At the end of the online forms, there is a final note that warns registrants if they “have not paid sales tax in your state, it is your responsibility to pay Maine sales tax.”
Excise taxes from out-of-state vehicles go into the state revenue fund and registration fees go to the highway fund, said Garry Hinkley, Maine Vehicle Services Division director.
Dunlap pointed out that Maine is victimized by other states, most notably New Hampshire, where there is neither sales or excise tax.
“In Lebanon [Maine], so many people were registering their cars in New Hampshire that they look for New Hampshire [license] plates in driveways,” he said. “Wherever you go, people are creative in finding ways to save money.”
But this sentiment doesn’t hold for Wininger. His goal is to educate other police officers in Connecticut to be on the lookout for illegal Maine registrations.
“What you are doing really should be revisited — you’re killing us down here,” he said.
AUGUSTA, Maine — Which state is home to the largest portion of out-of-state toll cheats on Delaware’s highways? Maine, apparently.
But it’s not that Mainers are traveling through Delaware en masse and refusing to pay tolls. It’s that thousands of Delaware residents are registering their boat and camper trailers — but not their cars and trucks — in Maine, and the toll cameras pick up only the Maine license plates.
Of the $1.5 million in tolls from out-of-staters that went unpaid in Delaware last year, $300,000 in unpaid levies were traced to Maine license plates, said Mike Williams, a Delaware Division of Motor Vehicles spokesman. That’s about 20 percent of Delaware’s unpaid tolls from outside the state and the highest amount of any state or Canadian province. And Delaware doesn’t have the authority to recoup lost toll revenue from out-of-state drivers.
“It’s been an issue for a long time, but we’re just now seeing more and more violations,” Williams said. “The tipping point just came that we needed to make it an issue.”
So Delaware officials are cracking down on residents who register their trailers in the Pine Tree State in an effort to save a few bucks on trailer registrations and avoid a required inspection.
Delaware already requires that residents register their vehicles and trailers in the state within 60 days of moving there, and the state recently raised the fine for failing to do that to $400 from $25. Now, the state is pursuing a public awareness campaign to let Delaware residents know it’s illegal to register trailers in Maine.
“The only way to eliminate the problem or put a dent in the problem locally is to really go up to rooftop and shout it out to everybody: ‘Please, don’t do this,’” Williams said. “We’re encouraging you to do the right thing.”
Residents of Delaware — and a number of other states — register their trailers in Maine because it’s cheaper and easier, since Maine doesn’t require an annual trailer safety inspection, Williams said. A Delaware resident, for example, can pay $22 to register a 2,000- to 5,000-pound trailer in Maine or $40 to register it in Delaware. Maine also allows trailer owners to register online or through the mail.
“If you’re a person who’s got multiple trailers and you’re tight on money, you say, ‘Gosh, I can save a couple hundred dollars doing this,’” Williams said. “They don’t even know it’s against the law.”
Unlike Delaware, Maine doesn’t require that a person registering a trailer in the state be a resident. And Maine doesn’t require an inspection when a trailer registration is renewed. Delaware requires an annual inspection as part of the registration renewal process once a trailer has been on the road for five years.
“The biggest thing that we have an issue with is the safety factor,” Williams said. “A trailer getting pulled around for 15 years, it might start to wear out. If it doesn’t go through inspection, there’s no way to guarantee what the situation is with its safety.”
But Delaware’s top concern isn’t safety; it’s the revenue the state is losing to Maine when large trucking companies register their commercial fleets in Maine, said Maine Secretary of State Matt Dunlap, whose office oversees the Bureau of Motor Vehicles.
“If they are actually making a media issue out of someone registering a boat trailer in Maine, then they have nothing else to worry about,” Dunlap said. “It’s really the trucking companies who may be based in Delaware but are registering their fleets in Maine. The business model that Maine has put out there is impinging on their revenue streams.”
Registering trailers — both commercial and noncommercial — in Maine may be cheaper than it is elsewhere, Dunlap said, but the primary advantage to registering them in Maine is convenience. Maine’s long-term fleet registration program allows companies with large vehicle fleets to register their fleets for five to 12 years at a time, Dunlap said, saving them the administrative headache of renewing their fleet registrations annually.
“We’re just being competitive, earning some revenue for the highway fund,” Dunlap said.
And since Maine won’t change its trailer registration practices, Williams said, Delaware is turning to public awareness to try to bring some wayward trailer registrations home.
The state is also pursuing a legislative remedy to recoup unpaid toll revenue from out-of-state drivers: reciprocity agreements with other states that allow Delaware to collect unpaid tolls from their drivers. Williams said Delaware plans first to sign reciprocity agreements with neighboring Maryland, New Jersey and Pennsylvania, then with other states.
Maine, New Hampshire and Massachusetts entered into a first-ever toll collection reciprocity agreement last year.