Taxes

[beedub]

Having a LLC for several years in Montana has saved us in excess of $50,000 and were not done yet. The one qualifier for other states trying to disallow this tax break is them proving you set up the LLC for the express purpose of avoiding sales tax. In our case the LLC is the mother company of my own company. The annual fee for registration is about the same as anywhere else but the cost of setting up the LLC is a one time cost. The law firm who set ours up charged $700.00 to establish and $50.00 a year to file our annual report. We use Texas as our home base although we spend less than three months a year there.

More quality information is available from RV Dreams as he is a lawyer and has written an excellent paper on the this very subject.

Good Luck

[Marshalone]

I looked at it but it's not for us. I am going to travel to Florida in February, look for a small lot down there and register my motor home and cars to that lot. No property taxes. I am sick and tired of paying thousand of dollars of school taxes every year here to a county that is being sued by the Dept. of Revenue for misspending $41 million of tax revenue. Part of the tax bill is around $100 for local fire service......I'll skip the school taxes and write a check to the fire service for a few hundred bucks each year.

[Desertboyz]

Originally Posted by Carl Avila

I live is a state with a personal property tax in addition to the sales tax. The Montana option would save me a ton, but I like others, view this as tax evasion even if it is not "Illegal" . I store my RV in a large facility. There are several Montana plates there, and the owner tells me that the county has questioned at least one RV owner about this.

I believe it would be both tax evasion and "illegal" in your state (MO) to form a MT LLC and store a RV within the state. I only glanced at MO use tax laws. It sounds similar to CA.

NO, NO, NO....Do not bring a RV registered to a MT LLC across state lines until the safe harbor period has passed. In CA that's 1 year.

[drhodes]

I registered and titled my trailer in Maine to avoid sales tax.....mine is a travel trailer

[MarcoMatt]

Originally Posted by Marshalone

I looked at it but it's not for us. I am going to travel to Florida in February, look for a small lot down there and register my motor home and cars to that lot. No property taxes. I am sick and tired of paying thousand of dollars of school taxes every year here to a county that is being sued by the Dept. of Revenue for misspending $41 million of tax revenue. Part of the tax bill is around $100 for local fire service......I'll skip the school taxes and write a check to the fire service for a few hundred bucks each year.

If you'd like, I could help you with that. Shoot me a dm

[FrankenRV]

Originally Posted by woodosgood

"Dutch Star Don" used the phrase "those with no home state" in reference to Full-Timers, but that is not entirely accurate. We full-time in our RV, but we still need a "home state" for vehicle license tags, drivers license, vehicle insurance, voting, health insurance, and many other things that require an address. We choose South Dakota (after evaluating costs in TX and FL) for those needs.

This may not have anything to do with Montana LLCs, but I just thought I would offer other alternatives to those considering full-timing.

In addition to the above comment, most states that have an income tax argue that there is no such notion as "no home state." The essence of their argument is that your most recent home state IS your home state, unless the taxpayer takes action to establish some other state as their home state. For example, I know of cases where taxpayers who lived in VA relocated to Europe, but never took any overt action to change their domicile from VA to any other state. They left VA, were still U.S. citizens, and did not establish domicile in any other state. They got a "surprise" tax bill from VA for year 'x', even though they were not present in VA during anytime in year 'x'.

FWIW, I suspect that NY will assert the same claim against a certain allegedly-former resident who claims to now be domiciled in FL, but is probably going to have a difficult time establishing physical presence in FL for at least 183 days.

[jhagan58]

I don't think the annual fee you mentioned is accurate. When we bought our new Holiday Rambler in March I intended to do the Montana LLC -..I contacted a Montana lawyer at Bennett Law Offices in Missoula to draw up the LLC and he was very helpful - Recommend that you give them a call for the current pricing.. 406 543 5804. after learning where I resided (Virginia) he said he would be glad to draw it up for me (price was ~$600.00 total one time fee) but he cautioned that Virginia was getting more aggressive about monitoring sales and registration of RVs in the state and I would run a risk of being challenged by the state IRS. He said that to date only one state (I think it was LA) had taken an LLC RV owner to court over the arrangement and the state lost... I did the math over the sales tax and annual property tax i would be avoiding and decided not go the LLC route although partially because i was anxious to complete the registration and be on the road for a long planned trip with grandchildren. I do not believe there is anything immoral or hypocritical about avoiding taxes if it is done in a straight up fashion and with full knowledge of the potential consequences if the state you reside in challenges your arrangement you may end up paying the taxes and a penalty.. or you may get the opportunity to be a hero to other RV owners in your state like the one rig owner in Louisiana who won the court case. ..I also liked the idea of having MT plates on my rig .. love that part of the country and spend a lot of time there when we are on the road. It just didn't work out for me at this time.. I will reevaluate the decision whe n/ if I get another RV.

[wihakowi]

Originally Posted by cheno

What would, Trump do? Waren Buffett he pays fewer taxes than is Secretary, Jeff Bezo Amazon paid zero taxes. .....

Not sure about Warren Buffet's secretary makes (I think that's what you were inferring) but Buffett paid over $1.8 million (2015). A rate of about 16%. He has consistently talked about the loopholes he uses to get his taxes down to that rate but mostly gives a whole lot in charitable donations. He, along with a number of other uber-wealthy, rails for more taxation of the wealthy.

Bezos earns about $80k a year in salary, likely not paying any tax on that after legal deductions. He did cash in about $1.8 Billion in stocks this year that will probably cost him about $400 million in taxes (at 25% rate).

Bottom line is that all of the above (including your aspersions) is either speculation or requires a belief in what any individual private citizen says. Private Citizens are under no obligation to share their taxes (Buffet did) and the IRS is restricted from doing so.

[Solo_RV_Guy]

Originally Posted by geordi

Yeah, his bias is obvious. By titling the video as a scam, he's already broadcasting that the ONLY information he will present is his own already-biased information.

There are plenty of states as well as individuals that don't like the idea that maybe someone has found a legal option to pay less taxes than they are - and these are the primary opponents of the LLC option. Misdirection and misinformation are their tools.

Hi Geordi-


Have you watched the video and listened to what he actually says? I agree the title is click bait, plain and simple, but the gist of his comments are "great, but what does your home state (domicile) have to say about such things? Will these Montana lawyers defend you in your home state? Nope, they won't."


There are a number of moving parts to utilizing this method of tax avoidance in a manner that is fully legal and not every RV buyer will qualify. I think we would do a disservice to folks if we left them with the impression that this is a one-size-fits-all 'solution' and is universally applicable.


As state and county governments look to reclaim revenue that has been denied to them, I'd expect to see more enforcement actions taken. Upthread there was a comment about RV cases not being worth much; I submit that if one is spending enough to warrant the expense of tax avoidance, the taxes, penalties and interest of the offended entity will be sufficient to pay for postage and maybe a few revenue agent phone calls, too.

[Janjim]

Originally Posted by cheno

What would, Trump do? Waren Buffett he pays fewer taxes than is Secretary, Jeff Bezo Amazon paid zero taxes. Most corporate Jets are registered in Delware, due to lax Aircraft tax. This is not Illegal!! Simply tax strategy. Do you think they have everything registered in their home state? Nothing wrong with having an LLC own your motorhome. I make contibutions to the LLC in the form of Insurance and Maintenance in return for the use of the RV. This is a business that owns the RV and it needs to be compensated, to protect the seperation of an LLC and yourself. There could be other protections of having the LLC other than Taxes. I would consult with locaql Attorney. By the way I have a monyana Tag. my wife hates it and says if we can afford a motorhome we can afford a Tag from our home state.

I used https://www.mtvehicles.com/ to set up my LLC.

I agree. Smart rich people save mils, and bils. by using these practices legally. Why shouldn't we to save thousands or tens of thousands.

[Tucsonmike]

Smarter than you average guy posting on this thread!

Originally Posted by redbaron73

Here is a formula to consider:

1) create a Wyoming close LLC. Your name is private and not visible to anyone other than the irs.
2) create a 2nd Wyoming close LLC owned entirely by #1. Again closed and private. For IRS purposes, this is a pass thru for reporting to #1.
3) register #2 as a foreign LLC in Montana. The owner is #1, llc name only. Helps to do this in flathead county as it is very low vehicle tax.

For all 3 use reigisterd agents, and keep your name off public records.

Conduct all income producing activities with #2 if applicable.
And purchase vehicles with #3

If you live in Texas or Florida, you must keep accurate records for how much time the vehicle is in your home state.

[rfg9585]

Originally Posted by Marshalone

I looked at it but it's not for us. I am going to travel to Florida in February, look for a small lot down there and register my motor home and cars to that lot. No property taxes. I am sick and tired of paying thousand of dollars of school taxes every year here to a county that is being sued by the Dept. of Revenue for misspending $41 million of tax revenue. Part of the tax bill is around $100 for local fire service......I'll skip the school taxes and write a check to the fire service for a few hundred bucks each year.

I live in NC and here there is a cap on sales tax of $2k which all considering is not too bad on a $300k rv. The real gotcha as I see it is they get you back when property tax time comes and you get nailed with a $4k annual bill. Although it seems like insurance is cheaper than any other state I have checked, I hear a lot on this thread about it being better in Fl for insurance and property taxes after 6mos and 1 day. So would it be a good opt to buy and register in NC 1st 6mos then move it to Fl after that. Is the ins and taxes really not that bad?

[Dogbig]

Hey Randy I’m in N.C. to Fayetteville and I own a 45ft Newmar Essex,2008 and who do u have insurance with,thanks

[wnytaxman]

Originally Posted by cheno

What would, Trump do? Waren Buffett he pays fewer taxes than is Secretary, Jeff Bezo Amazon paid zero taxes. Most corporate Jets are registered in Delware, due to lax Aircraft tax. This is not Illegal!! Simply tax strategy. Do you think they have everything registered in their home state? Nothing wrong with having an LLC own your motorhome. I make contibutions to the LLC in the form of Insurance and Maintenance in return for the use of the RV. This is a business that owns the RV and it needs to be compensated, to protect the seperation of an LLC and yourself. There could be other protections of having the LLC other than Taxes. I would consult with locaql Attorney. By the way I have a monyana Tag. my wife hates it and says if we can afford a motorhome we can afford a Tag from our home state.

I used https://www.mtvehicles.com/ to set up my LLC.

Your profile doesn't show in which state you reside. That makes a big, big difference on whether or not your state will chase down the Montana LLC. Your example of Delaware with aircraft is not exactly accurate. Aircraft are considered interstate and not all states tax aircraft. Generally the licensing of aircraft is done federally.

States, like NY, will look through the ownership of the rig by the LLC to the beneficial owner. Additionally, if your rig is present in your home state you will have licensing issues with the state. If you are in a high tax state with aggressive enforcement you may run into an issue. Just because someone hasn't gotten caught yet doesn't make something legal. Knowing the laws of your home state is the most critical issue. Just because you THINK you are legal and an attorney in Montana tells you you're legal doesn't mean that you are legal. When I contacted the Montana attorneys I was told that it would be legal to own the rig in a Montana LLC as a NY resident. What they didn't tell me was that if I owned the rig in the Montana LLC I could never bring it into NY. When one of my clients got caught with his Montana LLC licensed rig in NY his Montana attorney just said, "Gee, we're not licensed to practice in NY. You're on your own!"

One other statement in this discussion is completely off base. The state does not have to PROVE you were trying to avoid sales tax. The burden of proof in tax matters, other than criminal, is ALWAYS on the taxpayer. In other words, you have to PROVE that your intent was NOT to avoid sales tax.