It is 100% legal to create an LLC in Montana, and to have that LLC purchase and register a vehicle (or vehicles) regardless of your personal place of residence. and do not travel there anymore. That way taxes would be paid in the high tax state but at greatly reduced rates. Because Montana has no sale tax on an RV, your only cost is the $1,000 to set up your LLC "business.". Thank you for sharing your thoughts. Thats what media Mogul Rupert Murdoch did. Posts: 25,765. Have you considered that the money grab by the states isnt exactly moral? Otherwise they must get Michigan tags, registering the car in Michigan. Florida is one of the few states that does not charge property tax on cars so why would they care? Mike refers to Michigan a lot. Usually it is a cheater that got tagged for their avoiding what is rightfully owed to a state. We would have been quite upset if someone had us have to go thru a lot of paperwork for nothing with everything else that was going on. Stick to things useful, helpful, and informative. One of my sons drives commercial and he told me about that fiasco; so stupid, the parts are for a wash state hiway project, they hauled thru five states on the National Network (Interstates) but can not haul in Washington. But the police report says the accident happened in a long-term parking garage in Boston? Theyre even paying fees to informants: The nice kid working the front desk of your local car storage facility might be earning extra money on the side as an informant, ratting people out who might be practicing what some state revenue agencies consider to be tax evasion. I would suspect that you will also see other states start to do the same thing unless there is a successful court challenge. Copyright 2023 RV Lifestyle. We use cookies to improve security, personalize the user experience, enhance our marketing activities (including cooperating . What is the requirement and legal. That means buy it out of state and travel anywhere but your home state for a year. Call your local taxing authority and ask. I get the appeal if youre buying a $350K RV. February 09, 2022at10:27 pm, Lizzy Roma said: January 12, 2016at12:18 am, HD Case said: Im with you Mike. Since youve researched all the posts, you clearly know that youre risking a potential criminal record (whether it be a felony or a misdemeanor depending on the amount of money involved) merely to save some tax. The trooper didnt stop there. Montana LLC. So, they headed for Texas, driving the RV and towing their Jeep. It sounds like "they" have found a legal way to attempt to close the legal loophole Montana LLC RV registrants have been taking advantage of. I doubt that this is really the case, since your LLC owns the vehicle does not make it a commercial use vehicle. How didthathappen?. Montana LLCs almost always only work for full-timers who don't spend much time in their domicile state. No problem getting insurance in LLC name and if I had wanted to finance that would not have been a problem either. They are bureaucrats and they focus on everything. Planning to use Montana state to register our RV Then you have to comply with commercial trucking regulations. When did any state achieve authority over another for teaching a titled and registered vehicleof that state. IMHO California must recognize the laws of Montana. I even got my old DL# back. Where you happen to own a home and have a drivers license? Would love to be a full-timer with an organization like Sowers. Isn't IFTA federal? Here are the taxes alone on a new Pagani Huayra from a private seller in Arcadia, California in 2022. ), you could have a big problem: The underwriters and attorneys reviewing your claim will immediately notice theres a disconnect between the name on the policy and the ownership of the vehicle. I do not remember the thread that well since it does not apply to me but I believe that was the topic of it. Join us after the 62nd Escapade for 10 relaxing days of ocean-view camping and activities in Mexico including a sunset cruise, a tequila tasting, a paint & sip session at a local tapas bar, a day of fun at Mannys Beach Club, yoga classes on the beach, optional deep-sea fishing and ATV tours, and much more! For fulltimers, who are gone for very long periods from their home states, it appears to be very workable, especially if those fulltimers have established residency in a low tax state like, say, Florida. Instead, it was bought by a Montana company, one formed for the sole purpose of buying the RV. I pay the sales tax in California on my cars I register in Montana. Oregon has also enter the tax battle as they substantially fined and shut down an agent who was creating LLC's in that state which also has no sales tax. So, if you truly want to leave your cares behind when you choose the full-time RV lifestyle, I recommend staying informed and remain certain that you are following the proper procedures to avoid future legal problems. Heres how to keep the target sign off your back. A Montana LLC is considered a Montana resident and, like any other resident of Montana, won't pay a sales tax on any purchase. They very well may never be sued or have an issue. All this is perfectly legal in Montana. Or the solution might possibly be to move to a state where there is no sales tax like NH, but the "registration" fees there are very high. Its not like totaling out a seven year old Ford Focus. So, what has been happening is that the high tax states that do impose use and sales taxes and high registration fees on RVs have been taking aggresive steps to counter the scheme by writing laws and regulations that make it very difficult to take advantage of the plan. And BOOM youll get a nastygram in the mail saying you owe tens of thousands of dollars to the tax man. Your counsel would be appreciated! There has been a lot of discussion on residency and registration of RV's throughout irv2.com. http://www.loringlaw.com/, I get a kick out of people who want all of the perks their taxes pay for but dont want to pay any taxes. In Michigan, for example, owners of RVs with out-of-state plates must owners not keep their RVs in Michigan for more than 89 consecutive days. Loring & Associates (who Mrs. Adams works with) typically offer a free consultation, which sounds like it would be helpful in your case. Full time means the end could come for either/both of us anywhere other than SD. The next thing she knew, she was being pulled over by a local DPS trooper. Anybody can form an LLC in Montana. An LLC is considered a legal entity, able to buy and sell property. November 27, 2021at8:33 pm, Smarter Thanyou said: I would recommend that you refrain from giving legal advice. Anybody can form an LLC in Montana. You might save a little bit of money for now. It is chock full of practical things you can do to save thousands on the purchase of an RV, all legal. Establishing a Chain of Ownership for Your Vehicle 2. the whole thing, for reference. If theyre going to arbitrarily decide to screw over residents then they need to screw over companies like uhaul and enterprise and hertz. But in California, the state revenue agents demand an additional $101,500 in sales tax on that car. We were within our rights to keep MI and not change everything to CA. International Accounting Standards Board : Well, to me this is all a most creative shell game between the individual taxpayer vs. individual regional entities (states) each are running their own affairs and trying to keep their coffers full enough to support their overhead (programs, roads, wages for their institutions and beurocracies, etc etc). Nothing has changed but reading your blog makes me wonder if it would be best to redo our wills in SD. Realistically speaking, if you intend to claim domicile in Texas, then bite the bullet and pay the Texas sales tax for your RV. Make it look like you belong in Montana. We are Reddit's central hub for vehicle-related discussion including industry news, reviews, projects, videos, DIY guides, stories, and more. Is this just a big hoax? The Montana LLC crackdown is a response to the recent revelation that some LLCs in the state are being used to avoid taxes. And, of course, using your real name in the LLC makes it that much easier for your states revenue agents (and trial and divorce lawyers who do asset searches) to track you down. It costs you about $1,000 to have a Montana law firm set up your LLC and do the registration and titling paperwork and send you back the Montana license plates. Heggen Law Office is located in a commercial building. In most states, vehicle sales are subject to a nasty sales tax, personal property tax, or both. Being from Illinois, I would still have to pay Michigan sales tax if I bought from a dealer up there, so maybe low or no sales tax states would be better. I would venture that the rental income and the costs incurred by the LLC to maintain, store, license etc the RV would not generate a profit that would create a tax liability. She owns the LLC and the toad, so if shes properly insured, the only issue is her speeding. Having a "Montana Attorney" will do you no good if that Attorney is not licensed in California and familiar with California law. 2023 MOTORSPORT NETWORK. Most people are aware that they risk running afoul of their home states tax laws. 1house has been rented for 4years the house we currently live in will be renting in 10days. So if youre going to do this, dont make it obvious. Id have to agree that in California I have seen cops pull you over for those plates and with the emission and loud exhaust being a big deal. So its obvious the vehicle hasnt just driven in from Montana for the holidays. For non-residents, which the Montana LLC that owns the motorhome would technically be, an exemption to the tax would be allowed provided the motorhome is purchased by a person who is not a resident of this state at the time of purchase and is brought into this state more than 90 days after the date of purchase.. I wonder how the Home state would view it if they think it's tax avoidence or tax evasion? After arriving in Livingston, they visited Escapees RV Club national headquarters where they obtained their new Texas address. This is exactly what Ive been wondering. We already have contract to rent. If you live in Texas and setup a Montana LLC for the express purpose of not paying sales tax, you will be fine as long as you stay out of Texas with the LLC titled vehicle. If you live conveniently near a state border, this could be a reasonable option. To answer a couple of you, 1st off, this was my 1st posting, I never heard of this site until directed here by the editor of a major RV magazine, his thinking was that alot of RVers visit this site and my neighbor did not want to write an article, so I decided to do it myself. And then title their newly-purchased vehicle in the Montana LLC's name. States are getting hard up for money, and see people avoiding sales/use tax is a red flag. Sign up for US Legal Forms to save, print, and fill out legal templates without bounds. Join the #1 RV Forum Today - It's Totally Free! Think College tuition is expensive? According to Jalopnik, one way Georgia tax officials have caught up with owners of Montana-registered cars is by going through Montana registrations looking for cars with custom plates like MTBULLD0G.. Should say to California, This is MY 2nd HOME as defined by the IRS!!!! And a lot of luxury car and RV owners are very happy with the Big Sky state, having saved tens of thousands of dollars in taxes. All Rights Reserved. All Montana businesses are required to have a registered agentan individual or other entity that accepts legal and state documents on behalf of your Montana LLC. Finally insurance and finance make this even more complex. I digress, pay the sales tax and then they want property tax on an already taxed item every year. Whatever. Put yourself in the Trooper/Officer's shoes for a moment: You are assigned to a CA checkpoint, you see a high-dollar RV roll up, you see the Montana plates, the driver hands you a CA license and a registration for a Montana business entity. It can only work with LLCs formed in Montana because Montana is the only state which imposes no sales tax on the purchase of vehicles by its residents, including resident LLCs. Essentially, it works like this: You form an LLC business in Montana. Two years later, when the Louisiana Department of Revenue caught up with Thomas, officials said he owed $49,509 in Louisiana sales tax and penalties, but Thomas appealed and won. The National Conference of State Legislatures reports California and Massachusetts have passed legislation to prevent citizens from taking advantage of Montanas vehicle registration laws. To own a home and have a drivers license an additional $ in... 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