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Jager · 04-25-2016, 10:33 AM

JSteele & Leland0311 - I for one am very glad you posted this and explained some of this. One more piece of info . . . name/phone number of the attorney you use in Montana? I would be interested in setting up something like this. You can PM me if you prefer.

wnytaxman · 04-25-2016, 12:27 PM

There have been many discussions about the use of Montana LLC's. The OP sounds like they have had experience doing this. My big caution would be to make sure that nothing has changed with the laws of your home state since you first set up your initial LLC.

If you are going to use the Montana LLC, make sure you determine the residency laws of your home state and then determine if you can comply with the requirements of your state and that you can document your compliance. It is not simply a matter of deciding to license your vehicle in another state to avoid the sales tax. There are a lot of t's that need to be crossed and i's that need to be dotted.

One of my clients got caught with his NY garaged and Montana LLC licensed rig. We don't know for sure how he got nailed but a good guess was that the Florida dealer from whom he had purchased his rig was audited by the Florida taxation authorities who then reported to NYS that there were residents of NY who purchased an RV in Florida using a Montana LLC. Remember you have to provide a copy of your driver's license when you buy the rig.

Even if you can comply with the laws of your state, it doesn't necessarily mean you won't have to defend your choice of entity for the ownership of your RV. The burden of proof on matters of taxation is on the taxpayer, not on the state so plan accordingly.

lrose44 · 04-25-2016, 04:08 PM

I live in the great state of Illinois.
I have business dealing with the Illinois Depart of Revenue and respect the people I deal with.
I was told there would have to be a legitimate business reason for having a Montana LLC other than not paying Illinois sales tax on my RV
I was told the penalties were high...plus paying the tax.
So I wrote the great state a check for $18000..
Didn't want to.
But I don't have to look over my shoulder.

patch-y · 04-25-2016, 08:50 PM

Quote:

Originally Posted by lrose44

I live in the great state of Illinois.
I have business dealing with the Illinois Depart of Revenue and respect the people I deal with.
I was told there would have to be a legitimate business reason for having a Montana LLC other than not paying Illinois sales tax on my RV
I was told the penalties were high...plus paying the tax.
So I wrote the great state a check for $18000..
Didn't want to.
But I don't have to look over my shoulder.

Out of curiosity I looked at the Illinois and New York Registration Law. (I have to say the Illinois law is not easy to read.) But it appears that both states require registration in the state if you are a resident AND you keep your vehicle in the state, OR drive on the roads in the state.

That being said.......it also appears that in both Illinois and NY a resident does not have to register a vehicle that is kept in another state (and, it would appear, doesn't drive the MH on roads of the state the resident lives in). Each state has different requirements on this issue....If I remember correctly Rhode Island allows a residents out of state registered vehicles to 'be in the state' less than 30 consecutive days (the law is written to say if you own a vehicle and it is in the state for 30 consecutive days it must be registered).

I think it is safe to say a resident of a state who keeps their MH in the state they live is expected to register in that state, and if they don't, they may have to show which exemption or condition they fall under that allows the vehicle to be registered in another state (most states have a list of exemptions--- Fleet vehicles for out of state companies, etc).

As far as the NY client who got caught......Its not out of the question that someone was ticked off to see the out of state registered MH stored and used by a fella with NY residency-----maybe even a neighbor......and reported the matter to the state.

Mr_D · 04-25-2016, 09:03 PM

Quote:

Originally Posted by JSteele

I have registered the last two coaches in Montana and I live in another state. I formed an LLC in Montana and the attorney is the official address and registered agent there. There is a small annual fee to keep the LLC in good standing and the attorney sends the renewal fee and tag renewal stickers annually. I've never experienced a problem with this process, however I will not buy a coach in my home state as I would be concerned that the dealers records may be audited for purchases and therefor result in the state asking questions about the purchase and why it wasn't registered and tax paid. Regarding the lender, the vehicle would need to be titled in the name of an LLC, the loan would need to be made in the name of the LLC. Most lenders do not like this even though you, the owner of the LLC would be a guarantor. That being said it is possible to find a willing lender, I have offered a little more money down or a slightly higher rate to sweeten the deal and it has worked twice. Is it legal?? It is certainly legal to form an LLC in Montana, it is legal to have the LLC purchase the coach and legal to acquire a loan through the LLC. As someone else pointed out, the question is what is your states law regarding bringing it into your state. There are certainly some gray areas involved but the savings of sales tax and annual property tax are attractive.

No, the REAL question is: If your legal domicile state says it's illegal you'll have to defend yourself in tax court. You don't even have to bring it into you home state, just living there and registering it someplace else could be illegal. It is here in WA. I would have liked to avoid paying the over $25,000 sales/use tax but it isn't worth it to me!

wnytaxman · 04-26-2016, 06:39 AM

One of the biggest problems with the Montana LLC is that so many folks think it's just a matter of getting the LLC and licensing the rig in Montana. It's not that simple. There are many complexities to residency issues. For example, let's say I as a resident of NY, buy a rig and license it in a Montana LLC and then garage the rig in PA to avoid the NY tax. Now, I will have avoided the NYS sales tax but now my vehicle is a "resident" of PA and now its owner, the Montana LLC, is subject to PA law and PA taxes.

We just went through two residency audits here in NY. One of them took two years plus to resolve. We finally won by producing cell phone data that showed where our client's cell phone calls originated by tower.

The use of a Montana LLC can be very beneficial, but go into it with open eyes and well researched information. Being wrong in the choice of entities can be very expensive and time consuming. Good luck in your search and with your choices.