On September 10, 2014, the Miami Herald published a scathing article entitled, Miami-Dade power couple lowers (their own) taxes, raises eyebrows, which reported that Phyllis’ two Hummers and a Chevy SSR sported Montana license plates. Reporter Patricia Sagastume wrote:
Those plates are a telltale sign that someone has created an LLC — or Limited Liability Company — in the state of Montana. That allows them to buy vehicles and avoid paying the 7 percent Miami-Dade sales tax. The LLC costs up to $1,200 to set up, but that would be far offset by the sales tax savings on the vehicles in the Smith family’s driveway, which include two canary-yellow, king-size Hummers, a yellow (yellow is the councilwoman’s favorite color) Chevy SSR, and another vehicle indistinguishable under a protective cover.
Consumers can duck the Florida sales tax even if they buy the vehicle in Florida, provided the car, truck or van is registered in Montana in the name of the company.
The Herald also posted two pictures of Phyllis’ vehicles. The first was a photo of her driveway showing the back of her two Hummers and the side of her Chevy SSR.
The second picture published in the Herald was a close up of the Montana tag attached to the tire cover on the back of the other Hummer.
The rear of the Chevy SSR is not visible in this picture, but that’s the car Phyllis drove around town when she first campaigned for office in 2007. One of my peeps drove by her house a few days ago and noted that the SSR is now sporting a brand new Florida tag.*
Hmmm… The plot thickens!
It may have taken her over three months, but North Miami Beach Councilwoman Phyllis Smith is finally responding to charges that she bilked the State of Florida out of tax dollars by registering her vehicles in the State of Montana.
After the article was published, Phyllis was beside herself with angst, and complained to anyone willing to listen to her.
All two of them.
Considering that this story was old news, you just have to wonder why she dredged it up again after all this time. By opening that can of worms, Phyllis put herself in the spotlight yet again. And, believe me, not in a good way.
The editor published her letter with the title, Not involved with husband’s Hummers.
After I had a Laugh-Out-Loud moment over the unintended double entendre, while wondering if Phyllis could ever shut up long enough to … (oh, never mind), I read her letter. She wrote:
Re the Sept. 10 story Miami-Dade power couple lowers (their own) taxes, raises eyebrows, about my husband’s company vehicles and taxes: I want to set the record straight. As a North Miami Beach councilwoman, I take seriously the responsibility of holding this seat and I now understand that public officials ought to consider how some residents might interpret their actions.
In 2002, on the advice of his company’s attorney, my husband, Woodrow, opened an LLC. The 2002 Hummer was bought in Miami-Dade County, and Florida state taxes were paid; the 2004 Hummer was bought out of state; the Chevy SSR has Florida license plates; the car under the canvas was left to our children by their late grandfather and has not been driven. All of my husband’s vehicles are insured in Miami-Dade County.
I have had no involvement in his companies. I am not now, and never have been, a part of his corporations. In 48 years of marriage, I never handled car insurance or license plates. For that matter, I never even picked out or bought a car. These matters were taken care of by my husband.
As an elected official, it is my responsibility to help make a better city for everyone both now and in the future. I am determined to continue to serve North Miami Beach to the best of my ability and with the same tenacity.
Phyllis Smith, councilwoman, North Miami Beach
Right off the bat, Phyllis claims that “on the advice of his company’s attorney,” her husband formed an LLC (Limited Liability Company) in 2002. Her husband’s company, Central Plumbing – W.S. Company, is a Florida corporation formed on December 27, 1985, and is still active.
Over in Montana, a company by the name of Central Plumbing LLC was formed on December 17, 2002, and is located at 124 West Pine Street, Missoula, Montana 59802. It’s registered agent, Bennett Law Office PC is also located at that same address.
Oddly, THERE IS NO BUSINESS OPERATING AS “CENTRAL PLUMBING” ANYWHERE IN MISSOULA, MONTANA.
As I noted in a previous blog, this is a common practice. I observed that “there are agencies that charge a fee to form “shell” companies in Montana for the sole purpose of taking advantage of its no-sales tax laws.”
The registered agent for Woodrow “Woody” Smith’s Montana company is Bennett Law Office PC, which specializes in “Registration Services.”
In fact, this is published right on the firm’s own website:
Forming a Montana business entity (usually a Limited Liability Company) may help you eliminate all sales taxes and minimize license fees upon the purchase and registration of a recreational vehicle or any other vehicles. A Montana business entity can take ownership of a new vehicle, or a vehicle you currently own, and register the motor vehicle in Montana, which has no sales tax and low registration fees.
By following these steps, a non-resident of Montana may enjoy the benefits mentioned above:
- Have a Bennett Law Office PC establish a Montana business entity for you;
- Purchase (or transfer the ownership of) the motor vehicle in the name of the business entity – such that the name of the business entity and Montana address of the business entity (the address of your attorney and registered agent in Montana), and not your personal name and home address, appear on the reverse of the “Manufacturer’s Certificate of Origin” (the pre-title document given to you by the dealership from whom you purchased the motor vehicle) or the title, if the vehicle was purchased used or already owned by you; and
- Operate the motor vehicle in a manner that complies with the laws of the state where the vehicle is located and operated. We help you do so by researching the laws of all states, such that we can provide you with the legal guidance you need to avoid violating the laws of those states.
There are no forms for you to complete in order to establish the business entity. The staff of Bennett Law Office PC drafts and files all the necessary documents. You only need to call our office, and provide information including your contact information, what you are purchasing, and what you would like to name your business entity to one of our attorneys.
In addition, Bennett Law Office PC will also assist you in renewing the vehicle in your state of residence if you choose to do so in the future, and we will “wind-up” the company for you should you at some point no longer need the company. Tax liabilities upon renewing the vehicle in your state of residence are regulated by each individual state. In many states we can assist you with the renewing the registration of the vehicle with no or minimum tax liabilities. We will be glad to discuss the research we have on these liabilities regarding your specific state of residence.
It certainly appears that Woody formed a company in Montana for the sole purpose of avoiding paying taxes in Florida.
Phyllis also stated, “The 2002 Hummer was bought in Miami-Dade County, and Florida state taxes were paid.”
If that’s the case, why does it have Montana plates?
Phyllis also pointed out that “the 2004 Hummer was bought out of state.”
And, her point?
Anyone can buy a car out of state – or out of the country, for that matter. If the owner of the vehicle lives in Florida, and the vehicle is operated and permanently located in Florida, the owner is supposed to register that vehicle with the State of Florida.
Unless, of course, the owner of the vehicle is an out of state “shell” corporation registered in Montana.
This practice is legal in the State of Florida. For now, anyway. As I mentioned before, several states are enacting legislation designed to close this loophole. There’s always the chance that Florida and other states may do the same in the future.
Legal or not, though, when an elected official in the State of Florida engages in such ethically questionable behavior, it has the appearance of impropriety. As such, folks might perceive that she’s up to no good. And when it comes to politics, perception is reality.
Then again, this is the same elected official who wrote a letter to the Herald stating, “I now understand that public officials ought to consider how some residents might interpret their actions.”
She’s been in office OVER SEVEN YEARS and she JUST NOW figured that out?
Hey, Phyllis. Here’s a supply in case you get stuck again.
Or his Hummers.
Does anyone really believe that a yenta like Phyllis has absolutely no freaking clue what her husband of 48 years does for a living?
Or that she’s not involved with his Hummers?
That claim is about as ridiculous as the rest of her comment that she “never picked out or bought a car.”
Even though she’s “a member of the Hummer Club.”
Um, yeah. About that name…
Even funnier, despite her claim to the Herald reporter that “she doesn’t own cars and often catches a ride to city hall with others,” Phyllis has managed to get cited for at least eight traffic violations since 2001 in Miami-Dade County, Aventura, Sunny Isles Beach, and of course, North Miami Beach.
Phyllis was busted for not carrying her drivers license, having no proof of insurance, not wearing her seat belt, speeding, making an improper u-turn, making an improper left turn, and failing to move over for an emergency vehicle.
Public Service Announcement: If you see Phyllis barreling down the road in one of her monster Hummers, MOVE OVER!
All but two of her cases were dismissed. She paid a $108.00 penalty in 2001 for speeding on a county road, and $169.00 for not moving over on Sunny Isles Beach Boulevard just last year.
The same vehicle that NOW has a Florida tag.
Memo to Phyllis: PUBLIC RECORDS ARE FOREVER!
It’s also worth noting that her vanity license plate number, “REBUZZ,” which is short for “Real Estate Buzz,” is Phyllis’ way of advertising her line of work … which is the real estate business.
Even though she claimed that in “48 years of marriage, I never handled car insurance or license plates,” is there any doubt that Phyllis just might have “handled” that license plate?
Even if she wasn’t involved in the Hummer itself?
Phyllis closed her letter with, “I am determined to continue to serve North Miami Beach to the best of my ability and with the same tenacity.”
Which translates to, “I am desperate to keep my seat on the dais in May when I run for re-election so that I can qualify for lifetime health insurance on your dime.”
The article that caused Phyllis such anxiety was published over three months ago. Her penning a letter to the editor after all this time begs so many questions.
Why did Phyllis wait so long to rebut it?
Why did she suddenly re-register her Chevy SSR in Florida?
Why does she get so many traffic tickets?
What did the color yellow ever do to Phyllis?
Will she ever shut up?
Who does take care of Woody’s Hummers?
Okay, forget that last question.
Seriously. Don’t go there.
“Spreading the Wealth”