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Old 09-30-2007, 05:14 PM   #1
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Just wanted to warn other Colorado residents that full time or part-time most of the year that the Dept of Revenue is checking all Montana RV plates. We made the mistake of going into a state park and had our information sent to DOR and the day before we left for a 5 week trip a Revenuer showed up at our home. We have a Montana LLC, bought our RV out of state and have only been in the state for a few days in the last 6 months. We were informed that they are going after all Montana plates and that it is a "criminal investigation". We did not talk to the agent but contacted our atty. We do not believe we have an obligation to pay state sales tax or register our RV which is not domiciled in Colorado. Our LLC is not a "sham", but a legitimate business transaction as we do not stay in Colorado with the RV. We own a home in Colorado which we visit about 90 days in a year. We do not understand Colorado chasing retirees for sales tax such as this. Has anyone else had this problem? Our atty says that the state is going after another client for 4 years for plates plus sales tax. We intend to fight for our rights as we feel we did everything correctly.
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Old 09-30-2007, 05:14 PM   #2
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Just wanted to warn other Colorado residents that full time or part-time most of the year that the Dept of Revenue is checking all Montana RV plates. We made the mistake of going into a state park and had our information sent to DOR and the day before we left for a 5 week trip a Revenuer showed up at our home. We have a Montana LLC, bought our RV out of state and have only been in the state for a few days in the last 6 months. We were informed that they are going after all Montana plates and that it is a "criminal investigation". We did not talk to the agent but contacted our atty. We do not believe we have an obligation to pay state sales tax or register our RV which is not domiciled in Colorado. Our LLC is not a "sham", but a legitimate business transaction as we do not stay in Colorado with the RV. We own a home in Colorado which we visit about 90 days in a year. We do not understand Colorado chasing retirees for sales tax such as this. Has anyone else had this problem? Our atty says that the state is going after another client for 4 years for plates plus sales tax. We intend to fight for our rights as we feel we did everything correctly.
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Old 09-30-2007, 11:27 PM   #3
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Are you registered as a resident of montana or colorado? If you're registered as colorado, then they probably have the right to come after folks who are avoiding paying salses tax on items they purchased as residents of colorado. A great many states are after folks who are avoiding paying sales tax by using Oregon, or Montana LLCs.
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Old 10-01-2007, 02:17 AM   #4
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Chappie:
Just wanted to warn other Colorado residents that full time or part-time most of the year that the Dept of Revenue is checking all Montana RV plates. We made the mistake of going into a state park and had our information sent to DOR and the day before we left for a 5 week trip a Revenuer showed up at our home. We have a Montana LLC, bought our RV out of state and have only been in the state for a few days in the last 6 months. We were informed that they are going after all Montana plates and that it is a "criminal investigation". We did not talk to the agent but contacted our atty. We do not believe we have an obligation to pay state sales tax or register our RV which is not domiciled in Colorado. Our LLC is not a "sham", but a legitimate business transaction as we do not stay in Colorado with the RV. We own a home in Colorado which we visit about 90 days in a year. We do not understand Colorado chasing retirees for sales tax such as this. Has anyone else had this problem? Our atty says that the state is going after another client for 4 years for plates plus sales tax. We intend to fight for our rights as we feel we did everything correctly. </div></BLOCKQUOTE>

Do you also own a home in Montana or is the home in Colorado a rental property with an apartment that you just keep for when you are visiting the state? If not then they probably have a decent legal case against you.

As far as I understand it, you are domiciled while the RV is principly garaged. If the only domicile you have is in Colorado and that is where the RV is priciply garaged when you are not camping then that may be about all there is to it.

Hope it dosn't turn out too bad for you.
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Old 10-01-2007, 03:38 AM   #5
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Colorado would have to sue the corporation, not you as you do not own the motorhome.
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Old 10-01-2007, 06:29 AM   #6
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There is a bit of misinformation floating around here. As of more than 3 years ago, you must be a resident of the State of Oregon to register an RV there. A non-resident may register one vehicle in Oregon. As for the Montana LLC, if you and your attorney have dotted your i's and crossed your t's, all you may have to do is draw some kind of rental agreement between you and the LLC for the RV.
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Old 10-01-2007, 06:50 AM   #7
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Sharbra and others. Thanks for your imput, we will talk with our tax adviser re the rental of RV. The RV is owned by the LLC, domiciled in Montana, out of state (not kept in COLO) the remainder of the year. It will be in Texas for the winter. Since there is no consistency with state laws, it is very confusing as to where to license your motorhome.
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Old 10-01-2007, 06:53 AM   #8
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">We do not understand Colorado chasing retirees for sales tax such as this. </div></BLOCKQUOTE>

Just a point here. They chase anyone who they figure is trying to get by w/o paying sales tax - retiree or not.
What state is your driver's license issued for?
Where does your insurance policy say your address is?

Not picking on you - please understand that - but if it is indeed a criminal investigation, then the investigator will be asking much harder questions than these. Think of any and all questions you will be asked or possibly asked and have answers ready. Make sure you both give the same answers.

Oh yeah, if you are not a Coloradoan, why does your signature say "Canon City, Colorado".
Again, not picking on you, but this is the type questions you can expect from an investigator worth his salt.

(I had 27 years on the job and most was as a criminal investigator)
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Old 10-02-2007, 08:37 AM   #9
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Good points, Route 66. Probably the courts will have to sort it all out.

The issue here is not the legality of the LLC itself - an LLC is a perfectly legal thing. What MAY be considered illegal by some states is the use of an out-of-state LLC to avoid paying that state's sales and use taxes, which might be considered tax fraud. This question arises if you are a resident of one state and own (or partner in) an LLC in another state (e.g. Montana) and receive benefits from that LLC (such as free use of an RV). There is no way any of us here can determine whether Colorado may or may not consider this to be tax fraud based on a few superficial facts and near-zero knowledge of Colorado tax law.

Chappie's problem is that the Colorado tax people can decide he must pay tax without consulting anybody else. If they try to charge him the alleged back taxes, then he likely has to sue the state but it is a Colorado court that will decide the outcome, not a Montana court or a federal court. And in the meantime the Colorado revenue department probably has the authority to place liens on any of Chappie's other Colorado property for non-payment of taxes. In other words, it can get real messy if the state starts pushing hard.

Please note this too is conjecture on my part, but it is based on what sometimes happens when there is a disagreement between a state and its citizens over whether something is taxable or not. Once the state decides (rightly or wrongly) that a tax is owed, the bureaucratic mechanisms tend to steamroller the individual citizen because state laws typically grant the state a lot of power over those considered to be "tax cheats".

I hope Chappie can continue to report how this plays out. We all wish you GOOD LUCK, CHAPPIE!!!
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Old 10-02-2007, 11:15 AM   #10
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Dirk - I do have an LLC and have access to advice by an attorney, which I would recommend anyone with an LLC would use. There is no record in the RV of who owns the LLC. Only the name of the LLC. Our attorney advised using a name far removed from our own when we set up our LLC, so yes, a rental agreement would possibly be a feasible solution. Again, an attorney should be consulted in this matter.
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Old 10-02-2007, 11:55 AM   #11
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We have both a Montana atty and a Colo atty as well as an accountant familiar with LLCs so hope we can resolve this issue without going to court. We just wanted others to be aware that Colorado has nothing better to do than chase honest citizens as we have no illegals, no criminals, no other problems in this state; just us old folks who want to see the good old USA in our motorhome. So thanks for all your imput and we'll let you know the outcome.
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Old 10-02-2007, 01:36 PM   #12
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I can't tell you how many times I have dealt with issues like this. Rule one; setting up a business entity solely to evade any type of tax is illegal period. Living in a state with a sales and use tax and registering an RV in another state using a sham business that exists only to evade the tax is illegal. This is an illegal use of an LLC. Why was this RV purchase made using an LLC?? Only to evade tax. Get out your checkbook Chappie. There are good reasons to use an LLC this isn't one of them.

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Old 10-02-2007, 04:50 PM   #13
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Dalsn1:
I can't tell you how many times I have dealt with issues like this. Rule one; setting up a business entity solely to evade any type of tax is illegal period. Living in a state with a sales and use tax and registering an RV in another state using a sham business that exists only to evade the tax is illegal. This is an illegal use of an LLC. Why was this RV purchase made using an LLC?? Only to evade tax. Get out your checkbook Chappie. There are good reasons to use an LLC this isn't one of them.

Steve </div></BLOCKQUOTE>

Illegal???!!! Why do many corporations incorporate in Delaware???

How about fueling up in a low fuel tax state just before entering a high fuel tax state? Since one is bring fuel into a state with a higher tax should one declare the difference in tax and pay it?? How about buying liquor duty free and bring it into your state?? Does one have to pay the state liquor tax???
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Old 10-02-2007, 05:15 PM   #14
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Let's face it folks, the only reason to register your MH as a Montana LLC is to avoid your home State's sales taxes, excise taxes, etc. If that is your objective, you had better find a storage place outside your home state to store your MH when you are heading home.

Let's face it folks, if you come waltzing into your home neighborhood with an expensive MH with out-of-state plates and moor it there for more than a day, your neighbors will know and will be upset because your intent is so obvious!
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