Sales Tax

[wnytaxman]

Originally Posted by theroc

Well, as I've said dozens of times for over ten years on this forum every time this subject comes up, a Montana LLC isn't for everybody. In fact, it's not for most RVers.

But there are some who can use them quite legitimately. They are not breaking any laws. They do not have to keep looking over their shoulders. They are not cheating anybody.

In my circumstance where I am a full time RVer and spend time in many states, I have no guilty conscience about cheating the state from which I hold a drivers' license. When I had a stick and brick house and lived in that state most of the time, yes, I registered my vehicles in that state, paid property taxes on multiple properties, and paid plenty in fuel taxes. Now that I spend very little time in that state and am constantly moving from state to state in an RV, I have no legal obligation to the state where I vote and use as my legal address, to pay any more taxes than I am legally obligated to pay. If I do revert back to spending the majority of the time in that state, I will again register my vehicles in that state.

Again, I am not cheating anybody nor doing anything illegal.

Sometimes folks like to paint the world with the same broad brush without looking into the specifics. If you are a full timer and you can comply with the laws of the state in which you are claiming residency then there is nothing remotely wrong with using a Montana LLC. For those that say it is immoral, what state would you suggest a full timer pay the sales tax to?

If you are not a full timer but can comply with the residency laws of your state and you can document that compliance then the Montana LLC may work for you. We looked into the Montana LLC before we bought our Berkshire and determined that we could not comply with NY law so we just bit the bullet and paid the tax. It isn't rocket science, but it is tax law which can be more complex than rocket science.

[gosman]

In Texas, as for now, sales tax is deductible at the end of the year. This should benefit most of you high rollers out there!

[alpha99]

13% on purchase? Wow, 6% sales tax here, and $39/yr. for registration....

[HighwayRanger]

Originally Posted by Timon

So when you're moving from CA to say either Oregon, Idaho or even some other state with a 90 day ownership rule for use taxes. This could be better than taking out of state delivery for CA which would require keeping the coach out of the CA for a year which is a pain when visiting family in CA. This way you would only keep it out of the CA till you take up residence in your new state.

The rule in Kali is that, in order to avoid sales tax, you must take delivery outside of the state. You then cannot return the vehicle to California with the intent to register it here for 90 days (previously 1 year) or the sales tax will be due and payable.

You are not banned from driving it in California during that time, you just can't turn around and register it here without waiting the time required. But you do have to register it somewhere!

Roy

[wnytaxman]

Originally Posted by gosman

In Texas, as for now, sales tax is deductible at the end of the year. This should benefit most of you high rollers out there!

The sales tax was deductible in 2014, but unless the law gets changed before the end of the year, it is not deductible in 2015.

[tmw188]

I think most states may have dropped the sales tax deduction.


Sent from my iPad using iRV2 - RV Forum

[Timon]

Originally Posted by HighwayRanger

The rule in Kali is that, in order to avoid sales tax, you must take delivery outside of the state. You then cannot return the vehicle to California with the intent to register it here for 90 days (previously 1 year) or the sales tax will be due and payable.

You are not banned from driving it in California during that time, you just can't turn around and register it here without waiting the time required. But you do have to register it somewhere!

Roy

The CA rule started at 90 days, went to a year, got forced back to 90 days by the courts then went back to a year which is where it is currently.

If you take delivery out of CA you can still register in CA without the tax but it has to stay out of CA for a year and it must be used.

What's not clear is if you take delivery in MT and register it there as a LLC while your out of state then register it in the state you finally end up in is that a legal issue with CA. The net effect is the same with one exception that in the latter case you may not be locked into the 1 year wait to drive back into CA.

The whole exercise is not to defraud a state but to legally avoid paying any more in taxes than one legally obliged to do.

One question I've got is how hard is it to or can you domicile in MT like you can is SD? Then maybe it's just easier to rent a place in OR and take residences there while looking for and purchasing or building a house in whatever state one ends up in.

[eddieelk]

Last year April I bought my '98 PA Vision 37' for $10.000 cash. Paid $403.00 for sales tax & 2 years license. Insurance is $220.00 per year for 100/300/100, Med Pay, $500.00 Comp, $1000 Collision with free Road Service. Spent 5 months in S. Texas. In 60 years of driving & buying cars, RV's, a boat, & 2 pickups, I don't think I spent $125,000.00. If I had that much money to spend on a RV, taxes would no be a problem. JMHO, Eddie Elk.

[rskeans]

In AZ if you purchase from a private party there are no taxes. On new vehicles including RV's you pay taxes based upon the MSRP, not what you paid for it.

[HighwayRanger]

Timon, can you help me understand who would be the arbiter of whether or not an RV is "used" outside of California for that year? And how much "use" is enough? Also, can you help me find the 1-year rule in the CVC? So far, I'm not finding it.

Are you thinking that this rule is so that people don't buy an RV or car in California without paying sales tax, stash the RV in a storage lot in Arizona for a period of time, then bring it in with the hope of never paying sales tax? I imagine that is the scenario they are trying to preclude. Right?

Thanks,

Roy

[Mr_D]

Originally Posted by Falcon190

And I coughed up the sales tax on both. Argh! Almost 9% here...

Yep, that's a big bunch, even on a used rig like our Magna. I would hate to have to pay it on the original price!

[Mr_D]

Originally Posted by tmw188

I think most states may have dropped the sales tax deduction.

Federal deduction still exists at least for us WA residents. Last I heard it was permanent now.

[BobGed]

Originally Posted by HighwayRanger

Timon, can you help me understand who would be the arbiter of whether or not an RV is "used" outside of California for that year? And how much "use" is enough? Also, can you help me find the 1-year rule in the CVC? So far, I'm not finding it.

Are you thinking that this rule is so that people don't buy an RV or car in California without paying sales tax, stash the RV in a storage lot in Arizona for a period of time, then bring it in with the hope of never paying sales tax? I imagine that is the scenario they are trying to preclude. Right?

Thanks,

Roy

When you bring it back to CA you have to be able to prove that it was actively used outside of CA for that prior year. That means fuel receipts, campground receipts, etc. You cannot simply put it in storage for a year.

Then question becomes, where do you register it for that year while you're using it, and how do you insure it? Hint: Don't even think about NV or AZ. There just as bad, if not worse, than CA.

[wnytaxman]

The deduction for sales tax is a federal itemized deduction, not a state itemized deduction. It was extended into 2014 with retroactive legislation in late December 2014. There were attempts to have all of the items in that law extended to become permanent. Those attempts were unsuccessful and the sales tax deduction, as of right now, is gone.