Community Forums

Butte64 · 01-25-2013, 11:21 AM

How can you deduct sales tax on an RV? I remember many years ago when we could deduct sales tax but have not seen that in a long time.

RustyJC · 01-25-2013, 11:24 AM

Those of us in states without an income tax have an opportunity on our Federal 1040 to deduct state and local sales taxes.

Rusty

wnytaxman · 01-25-2013, 11:31 AM

Rusty is correct. You have the option to deduct either the sales tax paid or your state income tax, whichever is higher. You get a flat amount of sales tax from a table the IRS provides and you can add sales taxes paid for things like vehicle purchases, including RV's.

Rather than going into all kinds of details about different taxes and what you can and can't do, I'll start a thread under the general RV discussions as there are a number of things many folks are not aware of that could save them some dollars.

Ramzfan · 01-27-2013, 11:17 AM

I would like to add my two cents here...I currently hold a Montana LLC and I use it when I purchase a motorhome from a dealer. I only buy the Motorhome to resell it, so the LLC allows me to register it without paying sales tax and then resell it. My tow car is also registered under the LLC. This has worked well for me. Here in Nevada, you don't have to pay sales tax if you buy the vehicle from a private party, so I only use the LLC when I purchase from a business or a dealer.
I would like to add that the ideal situation would be for me to obtain a Montana address and drivers license, but so far, I haven't found the need to go to that much trouble. Maybe someday I will.

RickO · 01-27-2013, 07:44 PM

Quote:

Originally Posted by Ramzfan

I would like to add my two cents here...I currently hold a Montana LLC and I use it when I purchase a motorhome from a dealer. I only buy the Motorhome to resell it, so the LLC allows me to register it without paying sales tax and then resell it. My tow car is also registered under the LLC. This has worked well for me. Here in Nevada, you don't have to pay sales tax if you buy the vehicle from a private party, so I only use the LLC when I purchase from a business or a dealer.
I would like to add that the ideal situation would be for me to obtain a Montana address and drivers license, but so far, I haven't found the need to go to that much trouble. Maybe someday I will.

IMHO this certainly seems to be a perfect use of a Montana LLC and don't think anyone here is questioning this type of application.

Rick

BobGed · 01-27-2013, 08:55 PM

Quote:

Originally Posted by Ramzfan

I would like to add my two cents here...I currently hold a Montana LLC and I use it when I purchase a motorhome from a dealer. I only buy the Motorhome to resell it, so the LLC allows me to register it without paying sales tax and then resell it. My tow car is also registered under the LLC. This has worked well for me. Here in Nevada, you don't have to pay sales tax if you buy the vehicle from a private party, so I only use the LLC when I purchase from a business or a dealer.
I would like to add that the ideal situation would be for me to obtain a Montana address and drivers license, but so far, I haven't found the need to go to that much trouble. Maybe someday I will.

I can see how the Montana LLC would work for your transactions on motorhomes that you're purchasing for resale. However I would question the MT LLC licensing of your tow car if your legal state of residency is NV and it is kept at your NV residence. Also if your legal state of residency is NV, how and why would you obtain a MT driver's license?

wnytaxman · 01-28-2013, 06:16 AM

Quote:

Originally Posted by BobGed

I can see how the Montana LLC would work for your transactions on motorhomes that you're purchasing for resale. However I would question the MT LLC licensing of your tow car if your legal state of residency is NV and it is kept at your NV residence. Also if your legal state of residency is NV, how and why would you obtain a MT driver's license?

I would have to agree that if you live in one state and have a driver's license from that state, you probably shouldn't have a car licensed in another state. Also I don't think I would trade the no income tax state of Nevada for a state income tax that they have in Montana.

RickO · 01-28-2013, 07:45 AM

Quote:

Originally Posted by BobGed

I can see how the Montana LLC would work for your transactions on motorhomes that you're purchasing for resale. However I would question the MT LLC licensing of your tow car if your legal state of residency is NV and it is kept at your NV residence. Also if your legal state of residency is NV, how and why would you obtain a MT driver's license?

The way I read it, his company (LLC) buys and sells motorhomes all over the country and having a towable company car to get him to deliveries and pick ups is a business necessity... but I imagine that if the toad spent most of it's time in Nevada it could cause an issue.

Rick

Oscar Mike · 01-28-2013, 07:55 AM

Oregon is a sales tax free state too. We own property in Oregon and live in Las Vegas, NV, when we bought our coach we gave a lot of consideration to registering the motor home in Oregon to avoid sales tax, and when push came to shove we decided that that 8.1% sales tax in Clark County was better than looking over our shoulders.

Oregon has specific laws that prohibit this type of tax avoidance...Nevada has big fines for avoiding sales tax, so we paid the taxes and have a clear conscience.

wnytaxman · 01-28-2013, 08:16 AM

Quote:

Originally Posted by RickO

The way I read it, his company (LLC) buys and sells motorhomes all over the country and having a towable company car to get him to deliveries and pick ups is a business necessity... but I imagine that if the toad spent most of it's time in Nevada it could cause an issue.

Rick

Good point Rick. It would depend on where the toad was garaged and for how many days it was at a given location.

Ramzfan · 01-28-2013, 11:06 AM

Quote:

Originally Posted by wnytaxman

I would have to agree that if you live in one state and have a driver's license from that state, you probably shouldn't have a car licensed in another state. Also I don't think I would trade the no income tax state of Nevada for a state income tax that they have in Montana.

My thinking here is that you are allowed to own property in more than one state. If I had a Montana address and D/L, I could still live in Nevada for tax reasons. The IRS doesn't care what D/L you carry.

BobGed · 01-28-2013, 11:21 AM

Quote:

Originally Posted by Ramzfan

My thinking here is that you are allowed to own property in more than one state. If I had a Montana address and D/L, I could still live in Nevada for tax reasons. The IRS doesn't care what D/L you carry.

That may be true, but if NV is your legal state of residency for tax purposes and you keep your tow car at your residence in NV, then NV DMV requires that it be licensed in NV. As you know NV assesses a government services tax based on the value of the vehicle. Of course for a motorhome that's a big deal, ($2,500 on my 09 this year). I don't know the value of your tow car, but it would surely be much less than a motorhome.

A neighbor of mine got busted for MT plates through a LLC on his coach and towed vehicle that he kept at his house. I don't know what he had to pay as he didn't volunteer that information, and I wasn't going to ask. He was upset enough as is was, because he figured one of his neighbors turned him in.

Oscar Mike · 01-28-2013, 11:24 AM

Quote:

Originally Posted by Ramzfan

My thinking here is that you are allowed to own property in more than one state. If I had a Montana address and D/L, I could still live in Nevada for tax reasons. The IRS doesn't care what D/L you carry.

Ahh, but the jurisdiction in which you live does...Clark County, Nevada cares very much if I live here and register my vehicles in Oregon, where I own property. The fine is hefty for doing so.

RickO · 01-28-2013, 11:30 AM

Quote:

Originally Posted by johnmbeard

Ahh, but the jurisdiction in which you live does...Clark County, Nevada cares very much if I live here and register my vehicles in Oregon, where I own property. The fine is hefty for doing so.

Very true. And states like Texas require that, if you have a Texas DL... all of your vehicles must be registered in Texas. Not sure how they would check but they were sure emphatic about that when I went through the process.

Rick