No Sales Tax on RV Purchase

[wnytaxman]

Originally Posted by Magoogle

We also used a Montana LLC for our RV. And eventually all of our cars will go as well. According to VA law from what we were told by the lawyers of Montana, You are required to drive the RV out of state every 6 months to be legal. As long as you follow that 1 law, Montana LLC in VA is good to go

The key is always the compliance with the laws of your state and the abiltiy to prove that you complied with those laws. Many who try to use a particular tax technique tend to get sloppy if noone has called them on it. If you have complied with your state's law and you can prove that you complied then you may only have to prove to an auditor that you complied. Be aware that most Montana law firms that sell these LLC's are not licensed in other states. So if the fertilizer hits the ventilator, to paraphrase the old expression, you want to be sure you are in the right, can prove that you are in the right, and are willing to defend yourself accordingly.

As others have said, the states are getting very aggressive in chasing money and if you become a target, make sure you can prove your compliance with the law.

[Tony Lee]

Originally Posted by jimmyjnr

If you study the visa literature you will find that Canada ,Mexico and the bahamas no longer count as leaving .

Yes, I figured as much because in matters relating to the legalities of crossing borders, it is often the person at the border who has it most wrong - but they have the final say so the errors get handed on.
Not a problem even then because we can stay in the US for 6 months, then Mexico for 6 months, then the USA and so on provided the timing is right, but we wouldn't want to do that anyway. Too many other countries on our list.

[Kent65]

Originally Posted by Tony Lee

Yes, I figured as much because in matters relating to the legalities of crossing borders, it is often the person at the border who has it most wrong - but they have the final say so the errors get handed on.
Not a problem even then because we can stay in the US for 6 months, then Mexico for 6 months, then the USA and so on provided the timing is right, but we wouldn't want to do that anyway. Too many other countries on our list.

The best thing you could do regarding your visa is to consult a good US immigration lawyer. That is the way to get the best advice.

[jimmyjnr]

Sorry I didn't make it clear , immigration does not consider Mexico , Canada or Bahamas

[jimmyjnr]

As leaving , it is viewed as side stepping the regulations . As others have advised you should consult a immigration attorney

[Kent65]

Originally Posted by jimmyjnr

As leaving , it is viewed as side stepping the regulations . As others have advised you should consult a immigration attorney

I am not trying to argue with anyone. I just like to see people get the best possible advice in order to minimize their risk getting in trouble. That is why, since no one above, said they were an immigration lawyer I I suggested consulting one. Another good source of information would probably be an embassy or consulate of the country in which one is a citizen. Hopefully everyone here is right. I just believe in better safe than sorry. I saw too many immigration crimes when I was a criminal defense lawyer to be complacent about it.

[Richard and Hazel]

Thanks for all of the info. Just to clear up one point, we are Brits on UK passport and when we get to the USA we have 10 year visa with the standard 6 months per visit which is not a problem as we still have family back home. We have been traveling now for just over a year, India, Nepal, Lao etc and have been RV'ing around Oz for 3 months with another 2 to go so after 6 months in the USA it will be time to spend a few weeks back in the UK. I will have to find out if we can get international drivers licences when you are away from your home country. I know in the UK you have to go to the post office for a certified photo.

As we get nearer to actually "handing over the cash" for the RV, toad and all of the other stuff it is starting to get a bit scarey !

Thanks again.

Richard

[Mr_D]

Originally Posted by Richard and Hazel

Thanks for all of the info. Just to clear up one point, we are Brits on UK passport and when we get to the USA we have 10 year visa with the standard 6 months per visit which is not a problem as we still have family back home. We have been traveling now for just over a year, India, Nepal, Lao etc and have been RV'ing around Oz for 3 months with another 2 to go so after 6 months in the USA it will be time to spend a few weeks back in the UK. I will have to find out if we can get international drivers licences when you are away from your home country. I know in the UK you have to go to the post office for a certified photo.

As we get nearer to actually "handing over the cash" for the RV, toad and all of the other stuff it is starting to get a bit scarey !

Thanks again.

Richard

Don't get caught by a scam when buying. There was one person posting that lost $36,000 to a MH scam. I did some checking and the scam snared others to the tune of almost $100,000. Be sure and see the vehicle in person before laying money down!

[jimmyjnr]

We also came from UK on tourist visa then returned home after 2 months and reapplied for an investment visa .
We employed a specialist attorney to deal with the mountains of paperwork , a few things to bare in mind , 1 if you book a flight for the last day of your visa allowance and the flight is cancelled or you fall ill and fail to leave USA on last permitted day , you will not get back in ! Ever
2 . Every question / answer you have ever given to TSA officers at any port of entry into USA is recorded against your passport .

[Tony Lee]

The visas we are talking about aren't something that needs the services of any lawyer at all. They are basically tourist visas a step up from the no-visa 3-month tourist arrangement, not immigration visas.
The procedure for applying is very straightforward as are the criteria and the process is commenced on-line and then completed face to face at a US embassy or consulate.

[amanda_h]

Originally Posted by Mr_D

Haven't tested that theory in CA have you? Ask the CA BOE what their take on it is. I already posted the IFTA info and CA is, according to some posts on the forum, actually enforcing it, whether legal or not.

Yes, I did see what you posted. I showed that very dialog several years ago to not only our Montana lawyer but to two California lawyers so I could get the best interpretation. The reason I used California attorneys is that the discussion about the IFTA tax pertaining to Montana LLC registered RVs was specifically attributed to California because it "was" the only state known that was rumored to be "misinterpreting" the IFTA laws, i.e. threatening to require Montana LLC RVs to pay IFTA taxes.

First, the information you posted is old. It came out quite a few years ago. From what we understand, California's stance has since changed.

IFTA licensing requirements are determined by the state in which the vehicle is registered. So even if California was interpreting IFTA correctly (which we don't think they are/were in the case of a Montana LLC registered vehicle owned by a non-California resident), then they can only impose their IFTA licensing requirements for vehicles registered in California from what we understand.

The requirement for obtaining an IFTA license is for commercial vehicles (vehicles hauling freight or passengers for profit) engaged in interstate commerce ONLY. It is NOT intended for vehicles used for pleasure. There is NO business being conducted pertaining to my RV; it is being used strictly for pleasure only.

So, I have to abide by whatever Montana requires for IFTA and they don't require me to obtain an IFTA license. Here is the link for Montana IFTA requirements (click) but if you don't want to read through the entire 129 pages, I've attached below the appropriate page presented in simplicity that states "Recreational vehicles are not qualified vehicles"

The three attorneys (one Montana and two California) agree that the California BOE had initially misinterpreted the IFTA guidelines. They also have told us that there is no known case of any Montana LLC registered vehicle getting into extreme trouble while traveling through California pertaining to this IFTA situation. Initially, there were reports that some were being stopped at the agricultural stations by BOE agents and asked to see their registration and then asked to obtain a fuel permit (unnecessarily, as previously stated) but nobody has been cited for breaking any laws from what we've been told. They are all telling us that if by the remote chance we are cited whether it can be upheld in court. We feel comfortable with the legal advice we have been given pertaining to IFTA but I guess we will not be sure unless we have the opportunity to challenge it in court which we do not anticipate having to do.

I've also attached the interpretation of a Montana attorney pertaining to the IFTA controversy.

Again, to all who are preaching that registering your RV in a Montana LLC is illegal and a certain case of tax fraud, it is NOT if you follow the laws of your own state of domicile/residence pertaining to what triggers your having to register said vehicle in that state. Do your homework, get legal advice, obey the laws of your state of domicile, and if you save some taxes along the way you've done it all legally. It doesn't work for everybody but for some, it works quite nicely.

I may have misspoke when I said previously that the Montana LLC only should be considered by full-timers. More accurately, perhaps I should have said it only should be considered by those who might be retired and are able to move around strategically in order to comply with the laws of their state of residence.

@BobGed, yes, we agree that for full-timers, South Dakota is most likely the best state for registration. However, we had other reasons for choosing Nevada that we had to throw into the mix.

-harry


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[wnytaxman]

Good post Harry! Taxes are confusing enough in general and sales taxes are beyond being off the wall. To complicate matters, you have sales taxes being mixed with DMV laws and it really makes a mess.

Maybe a definitional clarification would help. Tax evasion is not paying taxes required by the law. A good example is receiving cash for services or goods and not claiming the income. That's tax evasion. Tax avoidance is using the law to reduce one's tax burden. For example, claiming the interest paid on an RV or the sales tax paid on an RV are two good examples of tax avoidance. Avoidance is doing what the law allows while evasion is breaking the law.

If someone is using a Montana LLC and they are complying with the laws of their own state then they have used tax avoidance. If they are using a Montana LLC and not complying with their own states laws then that is tax evasion and it is illegal.

[Max Hubrich]

Wnytaxman--

What a neat post you made- Thanks so very much-

How does "bartering", ie: exchange of services for gained value, enter into this equation? Our country was founded on this principal.

Example-
If I plow 15 large fields for a farmer in exchange for a pig, must I declare this as "income"?

Thanks again,

[wnytaxman]

Originally Posted by Max Hubrich

Wnytaxman--

What a neat post you made- Thanks so very much-

How does "bartering", ie: exchange of services for gained value, enter into this equation? Our country was founded on this principal.

Example-
If I plow 15 large fields for a farmer in exchange for a pig, must I declare this as "income"?

Thanks again,

Yes Max, technically you are supposed to declare the income. You can however deduct the cost of your fuel for your tractor, the depreciation on the tractor, a portion of the repairs on the tractor, part of the insurance on the tractor, and, well you get the picture. It's always complex because making any level of income requires certain efforts and expenses. As a CPA our efforts are helping people find those expenses.

Bartering is always a very sticky area for the IRS and for states. Bartering falls outside of transactions that get reported to the government so they really don't like the bartering that does go on. The IRS is really trying to get businesses set up to a point where everything gets reported to them. I can tell you that sales tax auditors have all kinds of formulas to try to back into the sales of cash based businesses like restaurants, barbers, and so on.