Sales Tax

[mus289]

Have some friends who used to live in Calif. They went through one of the Montana LLC agencies and saved a bundle. Now in FLA they just bought a newer rig also through the Montana LLC. They say it has been great for them. If I were considering purchasing another rig where the sales tax alone was several thousand bucks I would seriously consider it. I looked into a couple of agencies in Montana and they have it down to a science. They get your tags and all paperwork completed acting as your agent. You have a Montana address for your LLC in their building and you can register all of your vehicles through them if desired. Beneficial for the states who hammer you based on the value of your vehicle every year. Used a lot for motorhomes, airplanes, etc. The "Agent" also renews your tags for you each year. Prices seemed reasonable if you are in a state with high personal property taxes/sales taxes. Do some web surfing!

[theroc]

Originally Posted by mus289

Have some friends who used to live in Calif. They went through one of the Montana LLC agencies and saved a bundle. Now in FLA they just bought a newer rig also through the Montana LLC. They say it has been great for them. If I were considering purchasing another rig where the sales tax alone was several thousand bucks I would seriously consider it. I looked into a couple of agencies in Montana and they have it down to a science. They get your tags and all paperwork completed acting as your agent. You have a Montana address for your LLC in their building and you can register all of your vehicles through them if desired. Beneficial for the states who hammer you based on the value of your vehicle every year. Used a lot for motorhomes, airplanes, etc. The "Agent" also renews your tags for you each year. Prices seemed reasonable if you are in a state with high personal property taxes/sales taxes. Do some web surfing!

And also read this recent thread keeping in mind that it isn't for everybody:

http://www.irv2.com/forums/f258/montana-plates-246882.html#post2565364



.

[chasecoffey]

In texas if you traded another vehicle you qualify for a for a tax break...

[Mr_D]

Originally Posted by theroc

And also read this recent thread keeping in mind that it isn't for everybody:

http://www.irv2.com/forums/f258/montana-plates-246882.html#post2565364

True, I have a redacted case from WA where the state pierced the veil and went after the couple for fraud. It's some 25 mg so I can't post it but it does show the lengths the states will go to if you do things illegally.
Usually a Montana LLC is only legal if you are full timing and have no real estate anywhere. If you follow the rules and qualify then fine, go for it. Just remember that it's up to you to defend yourselves, the attorney that set it up won't.

[GKW]

The Montana Corporation works for many who have a personal address in California. Remember that the RV is owned by a Montana Corporation (which you own) and you are simply using it. I ran into a Californian who had an RV registered with a Montana LLC and was towing around his personal California car. I thought this was awfully risky and he told me he had been stopped several times in California and stuck to the Montana LLC story and had no problem. Another friend from California purchased a Montana registered RV from another Californian who had it for six years. He promptly set up his own Montana LLC and has been operating out of California for about five years now with no problem. California is like an 800lb Gorilla when it comes to collecting any tax or fee it can, but apparently aggressively standing your ground can work. Thankfully, I operate out of Oregon. No sales tax, no personal property tax on RV's, and two year license fee is about $250.00.

[Mr_D]

Originally Posted by GKW

The Montana Corporation works for many who have a personal address in California. Remember that the RV is owned by a Montana Corporation (which you own) and you are simply using it. I ran into a Californian who had an RV registered with a Montana LLC and was towing around his personal California car. I thought this was awfully risky and he told me he had been stopped several times in California and stuck to the Montana LLC story and had no problem. Another friend from California purchased a Montana registered RV from another Californian who had it for six years. He promptly set up his own Montana LLC and has been operating out of California for about five years now with no problem. California is like an 800lb Gorilla when it comes to collecting any tax or fee it can, but apparently aggressively standing your ground can work. Thankfully, I operate out of Oregon. No sales tax, no personal property tax on RV's, and two year license fee is about $250.00.

At some point they'll get caught.. Took WA over two years to get the couple I have the case info on. I wouldn't want to chance it.

[wnytaxman]

Just some points to clarify what has been posted. A Montana LLC is NOT a corporation. There is a very large distinction between the two from both a tax and a legal perspective. An LLC is an asset protection entity and is not a business just because it is an LLC. We have clients who have even put their personal residences into an LLC to protect themselves from the TV lawyers you see all the time. The LLC does work to protect other assets providing the LLC is structured correctly.

Second point is that you do not necessarily have to be a full timer to use the Montana LLC. It can be done legally but it does require some research and some strict adherence to the letter of the law. For example, let's say that your state requires any vehicle that is in the state for more than 30 consecutive days to be registered and licensed in your state. So every 29 days you drive to the next state over and fill up with fuel using your credit card so you can document the trip. You have technically complied with the law and your vehicle does not have to be registered in your state.

However, be prepared that if you do go that route you may have to defend yourself from the state tax auditors. The burden of proof is on the taxpayer which means that you have to prove that you complied with the law and the state does not have to prove you did not comply. It can be costly to defend yourself even though you are within the law.

I hope that helps to clarify things a bit.

[Fiesta48]

Bought a new 15 Discovery in Mesa AZ. The city has a 2.2% sales tax. It was over 3 grand. AZ sales tax was 6.5% Had to pay both. Registered RV in TX with a 6.25% sales tax. AZ to reimburse TX but we lost the .25% and the 2.2%. Almost was a deal breaker, but the ON SALE price (almost 30K) was much cheaper than anywhere else.

[sprayman]

Originally Posted by joemcgin

Massachusetts is the same way.

Mass uses book value not necessarily the selling price..

Jim

[Big-Foot]

What really irks me about the sales tax on these rigs is that they can be considered our residence (and for many they are)....
When was the last time you heard of sales tax being paid on a land based home?
What about mobile homes - they have wheels - is sales tax charged on them?
Park Model trailers - are they considered RVs? Are they taxed as well?
--
We live in MN in our dream home and hate the thought of leaving it, but the taxes here are excruciating. Even Social Security checks are taxed here (we are one of 7 states that do this).. We plan on living in the south (AZ currently) in the winters - starting next november. According to the state of MN, we are residents here if we are here more than 6 months and a day I think.
We may just have to look into other options although our current camper has been bought and paid for - it's not the last one we'll buy...

[eprman1]

I recently checked with Mass DOT/RMV about sales (and excise) tax before I buy my new unit. They told me:
If from a dealer:
1. they use the sale price - trade in value to calc the tax
2. The sale price must be 'reasonable' meaning somewhere near book value.
3. If it is not, they will use book value
4. If you buy in a state that has tax, they work it out for you so you only pay once.

If a private sale, they use only book value.

Excise tax is based on book value each year, but they could not tell me what it would be for a given MH. I guess they don't have the book.

I did read on one of these forums a few months ago (in a much older post) that someone registered the chassis, not the MH, and the taxes were much less. Tax on $25K vs $200K. I have no idea how he did it. His email address was not valid anymore. I have called every agency and multiple insurance companies but no one could provide any info.

[wnytaxman]

Originally Posted by Big-Foot

What really irks me about the sales tax on these rigs is that they can be considered our residence (and for many they are)....
When was the last time you heard of sales tax being paid on a land based home?
What about mobile homes - they have wheels - is sales tax charged on them?
Park Model trailers - are they considered RVs? Are they taxed as well?
--
We live in MN in our dream home and hate the thought of leaving it, but the taxes here are excruciating. Even Social Security checks are taxed here (we are one of 7 states that do this).. We plan on living in the south (AZ currently) in the winters - starting next november. According to the state of MN, we are residents here if we are here more than 6 months and a day I think.
We may just have to look into other options although our current camper has been bought and paid for - it's not the last one we'll buy...

Actually in most states the materials used in a new home are subject to sales tax. Most states do not tax the labor or the contractor's mark-up on the material but the material itself is subject to the sales tax.

Almost every state is hurting for revenue and they are going to some great lengths to acquire that revenue. Sales tax is one of the easiest ways to collect that tax because it is buyer specific and most people just grumble and continue to pay it.

[lanerd]

Originally Posted by myliladog

YES I live in Oregon and there is no sales tax at all allot of friends in the states come to Oregon to purchase a motor home there is a fantastic dealer in Junction city that I have dealt with the last 25 years 4 motor homes. I might be able to help you with a address in Oregon also good luck

That's true; however, as soon as you take the mh back to your state that does have sales tax, you will have to pay then....so buying in Oregon does nothing for you unless you actually live in Oregon.

Ask me how I know this.

Ron

[bmurph44]

Originally Posted by wnytaxman

Actually in most states the materials used in a new home are subject to sales tax. Most states do not tax the labor or the contractor's mark-up on the material but the material itself is subject to the sales tax.

Almost every state is hurting for revenue and they are going to some great lengths to acquire that revenue. Sales tax is one of the easiest ways to collect that tax because it is buyer specific and most people just grumble and continue to pay it.

And don't forget that wonderful property tax that goes up every year.