The number of passenger vehicles registered in Maine but owned by out-of-state residents has more than doubled in five years.
The sharp increase – from 7,483 in 2014 to 16,589 this year – has contributed an extra $250,000 to the state of Maine.
The reason this is happening is simple: Maine’s vehicle registration fee of $35 is among the cheapest in the country. And it’s among the few states that allow nonresidents to obtain plates, no questions asked.
But the situation has caused headaches for some other states, which are losing revenue to Maine. Some out-of-staters are violating their own state laws by registering their vehicles in Maine, which has no residency requirements for registrations.
Maine Secretary of State Matthew Dunlap said he periodically hears from officials in other states about this but said it’s not Maine’s problem.
“It’s not up to the state to choose people from out of state and keep them from giving us their money,” he said.
Paul Grimaldi, spokesman for the Rhode Island Department of Revenue, which oversees the Division of Motor Vehicles, sees it a little differently. He said Maine is all but encouraging out-of-state residents to break the laws of their home states, something that he’s seeing more frequently in Rhode Island.
“I do think the state could do more to prevent this,” Grimaldi said.
Maine’s registration law, created two decades ago, was lax by design, intended to accommodate both seasonal residents and businesses. It has turned into a lucrative source of revenue for Maine, particularly for commercial trailer registrations. Trucks that travel across interstate lines can register anywhere, and many choose Maine. Revenue from long-term trailer registrations has nearly doubled in the past decade, from $7.5 million in 2009 to $13.2 million last year.
But the same law that permits trucking companies to register vehicles here also allows others to register their vehicle with Maine plates, whether they actually have a legitimate tie to Maine or not.
States have various ways of setting registration fees. Some have flat fees. Others calculate the fee based on a vehicle’s value, age or weight. No matter how you calculate it, it’s hard to beat Maine’s $35 flat fee.
In Connecticut, which has the fourth-highest number of Maine license plates, 1,457, the registration fee is $80. Ernie Bertothy, spokesman for Connecticut’s Department of Motor Vehicles, said he believes the low fee is a reason Connecticut residents register cars in Maine, but he also said the DMV there will not issue registrations to anyone who owes property taxes. Rather than pay back taxes, some just register in Maine.
In some states, emissions are tested as part of an annual inspection, so car owners may try to avoid the inspections by getting plates from Maine, which doesn’t test. The same may go for personal trailers, which aren’t inspected here and don’t need titles.
The registration fee in Rhode Island ranges from $30 to $48, depending on vehicle weight, so the savings appear to be negligible. That suggests Ocean State residents are registering cars here for different reasons. But Grimaldi, the revenue department spokesman, said public safety officials are increasingly dealing with a high number of cars, 446, driven by locals with Maine plates. That’s a violation of Rhode Island law, which requires residents to register their vehicles locally, within 30 days of moving there.
Nearly every state has the same requirement, although the length of time to comply varies. The problem surfaces mostly when public safety officials want to send a parking ticket or toll violation and the plate isn’t registered to a local address.
The state with the highest number of nonresident vehicles registered in Maine is an unexpected one: Oklahoma. According to state data for all active registrations, there are 4,658 Maine plates in Oklahoma, more than twice the next-closest state, Massachusetts.
The high total is driven almost entirely by one company, EAN Holdings, which operates the Enterprise, Alamo and National car rental brands and puts Maine license plates on its rental fleets. A company spokeswoman said the number of Maine plates issued to Oklahoma vehicles more or less matches the number of rental vehicles that originate in Maine.
Laura Bryant also said the company tries to register vehicles in the state where they are likely to be driven most but in the case of Maine, there are savings. Standard vehicle registration in Oklahoma is $85 for a car that is four years old or newer. In Maine, it’s $35. For a fleet of 500 cars, it costs $25,000 less to register in Maine. Added to which, a company can do business with Maine’s motor vehicle department in bulk, all without having to leave the office.
“We’re a cheap date,” said Dunlap, the Maine secretary of state.
The out-of-state registrations are done by third-party agents, or companies that specialize in the service. Most of them market to trucking companies and other businesses that deal in interstate commerce, but they also offer passenger vehicle registration.
Thirteen of these agents do business in Maine. Calls to several of the agents were not returned over a period of three weeks.
One of the biggest agencies, according to the state, is the Staab Agency, located in a sparsely populated area of midcoast Maine near Damariscotta Lake State Park. Multiple attempts to speak with its owner, Shirley St. Pierre, including an in-person visit, were unsuccessful. (St. Pierre was convicted a decade ago of tax evasion and obstructing the Internal Revenue Service for not paying taxes on income from the company and then for falsifying documents to conceal her failure to pay taxes.)
One agent, the Maine Motor Transport Association, which also lobbies for the trucking industry, only does trailer registrations.
“It’s a great business for us and for the state, and our customers certainly like the ease of doing business here,” said Brian Parke, MMTA’s president and CEO.
The idea that a state might create a law to encourage niche business is not unusual. Delaware has become the corporation capital of the world because of the ease and low cost of setting up a corporation there. Rhode Island is well known for enticing boat owners to register their vessels there.
In Maine, the trucking industry has taken advantage of trailer registrations. Motorists traveling up and down the East Coast, or even beyond, may notice a disproportionate number of long-haul trailers with Maine license plates.
Maine Secretary of State Matt Dunlap acknowledges that many out-of-staters are registering their vehicles here to save money, but that, he says, isn’t Maine’s problem. Joe Phelan/Kennebec Journal file photo
Each third-party registration agent warns that although Maine law allows out-of-state registration, consumers need to follow the laws of their own state. But the agents don’t police that, nor does the Maine Secretary of State’s Office.
Dunlap said he understands the frustration of other states, but Maine simply can’t monitor whether people from elsewhere are properly registering their vehicles.
Similarly, officials in other states say they can’t track down every improperly registered vehicle. Watching license plates is not a priority for police. And if a driver’s insurance policy or license address doesn’t match the plates, owners aren’t ticketed.
In 2013, the News Journal of Wilmington in Delaware reported that drivers who owed the most in unpaid tolls and penalties were from Maine. But only the license plates were from Maine – the drivers overwhelmingly lived in Delaware.
Some would argue that Maine is looking the other way while people use the state to violate their own state’s laws.
Dunlap doesn’t view it that way. He said Maine loses out in other ways. For years, the state has dealt with Maine residents who live near the New Hampshire border registering their vehicles in New Hampshire to avoid excise taxes. Excise taxes are separate from registration fees and are paid to the municipality where the vehicle is garaged. New Hampshire’s excise tax rate is as much as 33 percent lower than Maine’s, so residents claim a New Hampshire address, sometimes even going so far as to get a post office box.
Dunlap said Maine doesn’t have the resources to go after potential violators who might be registering in New Hampshire.
“It’s a thorn in our side the same way Maine registrations are a thorn in other states’ sides,” he said.
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