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Old 11-13-2013, 03:45 PM   #15
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If you're going to set up a Montana LLC you'd better make Montana your LEGAL residence and NOT reside/own property/visit (over 30 days) in your home state. The only way you'll be able to get away with the LLC legally is to be a full timer with no residence/property/ties in ANY other state then Montana.
That is not really totally correct. I could have a Montana LLC here in NY, but I would have to comply with the NY registration and residency laws. As I understand the requirements here in NY, they are that unless the vehicle leaves the state at least once every 30 days then the vehicle is a NY vehicle and must be licensed in NY and the difference between the sales tax paid in the state of original licensing and NY must be paid to NY. You can comply with your state's laws, but the compliance must be to the letter of the law and you must be able to document that compliance. One more point is that if you use the Montana LLC you must be prepared to defend that use against your own state. That may cost you more than the sales tax even though you are in compliance with your state's laws.

If one complies with the laws of their own state, then the Montana LLC is legal. Many owners of Montana LLC's use the ownership strictly as a tax dodge and do not comply with the laws of their own state. Those are the folks who are standing downwind when the fertilizer hits the ventilator, to paraphrase an old expression.
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Old 11-13-2013, 04:31 PM   #16
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That is not really totally correct. I could have a Montana LLC here in NY, but I would have to comply with the NY registration and residency laws. As I understand the requirements here in NY, they are that unless the vehicle leaves the state at least once every 30 days then the vehicle is a NY vehicle and must be licensed in NY and the difference between the sales tax paid in the state of original licensing and NY must be paid to NY. You can comply with your state's laws, but the compliance must be to the letter of the law and you must be able to document that compliance. One more point is that if you use the Montana LLC you must be prepared to defend that use against your own state. That may cost you more than the sales tax even though you are in compliance with your state's laws.

If one complies with the laws of their own state, then the Montana LLC is legal. Many owners of Montana LLC's use the ownership strictly as a tax dodge and do not comply with the laws of their own state. Those are the folks who are standing downwind when the fertilizer hits the ventilator, to paraphrase an old expression.
So in NY, it appears to come down to "garaging" of the RV - which I think would apply in any other state ... ie: where is the RV normally garaged and for how long at a time?

Certainly many people "get away" with registering vehicles outside of their home state (meaning state of domicile), and get away with it. In our town here in CT, I see Florida license plates every day on cars/trucks/suv's in our town. We have a very large senior citizen community in our town - Heritage Village - and many of the Florida plates seem to be from senior citizens that, I assume (or hope), reside for some part of the year outside of Heritage Village/in Florida. But who knows, maybe they have rental property in FL, a friend or a relative ...

I don't just see a large volume of FL plates in the summer, but throughout the entire year. Are all of these residents of our town following registration requirements for their vehicles? Probably not, and at the end of the day, their vehicles are using town roads, garaged in our town, but not paying taxes.

As a resident, we have seen our taxes go up significantly this year. Nearly 10% on propery taxes on our home, and 18% on our motor vehicles, and RV.

I can understand why municipalities look for "improper" out of state registrations.
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Old 11-13-2013, 05:29 PM   #17
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Did you make any attempt (legally) to convince Indiana you did not owe taxes for vehicles owned by the LLC? Of course, you would probably need legal assistance for that and the lawyer(s) might well cost more than the $5000 you paid in taxes. But the point is, Indiana isn't under any obligation to warn you that your LLC might in fact not owe taxes to Indiana. After all, they are only representing their opinion that you were illegally avoiding Indiana taxes. Maybe you were, but maybe you were not.

In any case, I don't see any beef against Deer Creek. They promise to set up a Montana LLC, and you got one. How your particular LLC's situation is viewed by Indiana isn't within their scope. As you said, others have them and are perfectly ok - it is not a black and white thing.
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Old 11-13-2013, 05:56 PM   #18
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Max, sorry to hear about that mess and it does give us all a lot of insight to establishing residency, LLC, and compliance requirements.

I will share that in my military career, my wife and I were both South Dakota Residents, Our drivers license, plates, we voted there, everything. Yet we lived out of state. My wife also worked out of the home. One day she got a letter from some other citizen who seen her come to work and put this letter on her windshield that stated they were turning us into the state of Nebraska Attny Generals office. It was a very well written letter citing state statutes.
It made accusations that we were cheating the state of Nebraska by registering our vehicles in South Dakota and working here.
Seems there are those who have nothing better time on their hands then to go around and harass us over something we were clearly exempt from under the Sailor and Soldiers Act.
But as others mentioned you all never know who is watching who and then they assume the worst.
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Old 11-13-2013, 06:25 PM   #19
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To answer the questions, No I did not study Indiana's laws. Not being a lawyer I figure I would misinterpret them. I know other people who are doing the same thing. Just simple logic tells me if I own a company in Montana or anywhere else, that company is allowed to have vehicles, etc. Meantime I can live anywhere. But that's not so.
.
Actually I think you need to separate "yourself" from the RV, since technically you don't own the RV ... yes you can live anywhere you want, but I think this is less of where you live and more of where the RV's and vehicles - that are owned by the LLC - live.

I think of it as if the RV is an employee of the LLC. Sure, a company may have brance offices around the US, but each branch office is required to pay taxes - unemployment, etc - in the state that it resides in.
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Old 11-13-2013, 08:25 PM   #20
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Actually I think you need to separate "yourself" from the RV, since technically you don't own the RV ... yes you can live anywhere you want, but I think this is less of where you live and more of where the RV's and vehicles - that are owned by the LLC - live.

I think of it as if the RV is an employee of the LLC. Sure, a company may have brance offices around the US, but each branch office is required to pay taxes - unemployment, etc - in the state that it resides in.
That is a very unique analogy, but it is pretty much spot on.
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Old 11-13-2013, 10:06 PM   #21
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Maybe not relative to this thread, but relative to other threads I have read about other Montana LLC problems ....

Montana LLC Vehicle Registration - FAQ : Deer Creek Corporate Services

Can I register my tow vehicle as well?
Yes, in fact we recommend that you register both vehicles in Montana as you're less likely to be stopped if your license plates match.

So ... register your RV and tow vehicle to avoid any perception of impropriety??

Will I need to pay sales tax in my home state?
Sales tax is generally due in the state of registration. Your vehicles will be registered in Montana which has no sales tax. You will need to understand and comply with use tax laws in the states where the vehicles are located.

"You will need to understand and comply with use tax laws in the states where the vehicles are located" ... back to the garaging question.


Nothing against the OP or the legality of RV registrations in other states. Tax avoidance, if following the "letter of the law" is certainly a different matter than Tax Evasion .. and to ensure you fall under Tax Avoidance guidelines, you need to make sure that you follow those guidelines to the letter of the law .. and probably then some.
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Old 11-13-2013, 10:15 PM   #22
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No matter who set up a LLC, you are still responsible for being in compliance with ALL the laws relating to it.
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Old 11-14-2013, 05:35 AM   #23
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First, my main reason for the post is to warn others that they may be in for big tax bills out of the blue.
Not being a lawyer I don't fully understand all of the nuances of the laws. I worked for a giant broadcast company with stations in Indiana and several other states. One day we were a Nevada Corporation. Then found some parts of the company were suddenly Delaware Corporation. It changed on occasion and depending on which corporation in which was part of which corporation.
Anyway, I am happy some people can learn from my ignorance.
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Old 11-14-2013, 12:04 PM   #24
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For years now I have been telling people here and in other forums that the Montana LLC trick to avoid taxes is ILLEGAL.

As you just found out... Now not all states are yet pursuing the violators.. But as you found out your home state is.. Mine considered it some time ago but since I am not a violator I do not know the outcome of that consideration.

Now you know.. Cheat the tax man.. Get burned.. You got off light by the way.
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Old 11-14-2013, 12:24 PM   #25
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For years now I have been telling people here and in other forums that the Montana LLC trick to avoid taxes is ILLEGAL.

As you just found out... Now not all states are yet pursuing the violators.. But as you found out your home state is.. Mine considered it some time ago but since I am not a violator I do not know the outcome of that consideration.

Now you know.. Cheat the tax man.. Get burned.. You got off light by the way.

Not meaning to get overly involved in semantics, but avoiding taxes is something we all do to one extent or another. Evading taxes is what creates the problem. The difference is that avoiding taxes is utilizing the law to reduce your tax burden. We all do that by deducting sales tax on RV purchases and deducting interest paid on our RV's. Evading taxes is reducing your tax burden by not complying with the laws. Using the same analogy. It would be tax evasion if you took a deduction for those expenses when you did not pay them.

The Montana LLC is legal if one follows and complies with the laws of their resident state. That does not mean that they won't have to prove that compliance and defend their usage of the Montana LLC, but just using a Montana LLC is not illegal. Using it and not complying with your home state's laws is illegal.
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Old 11-15-2013, 07:56 AM   #26
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The states could easily fix this issue by fairly taxing motorhomes.

If the chassis value was taxed like every other vehicle people would not do it.

No one pays high rate sales tax when they buy a hunting camp or vacation cottage.

Tax the motor not the home!
Problem solved.
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Old 11-15-2013, 03:00 PM   #27
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Not meaning to get overly involved in semantics, but avoiding taxes is something we all do to one extent or another. Evading taxes is what creates the problem. The difference is that avoiding taxes is utilizing the law to reduce your tax burden. We all do that by deducting sales tax on RV purchases and deducting interest paid on our RV's. Evading taxes is reducing your tax burden by not complying with the laws. Using the same analogy. It would be tax evasion if you took a deduction for those expenses when you did not pay them.

The Montana LLC is legal if one follows and complies with the laws of their resident state. That does not mean that they won't have to prove that compliance and defend their usage of the Montana LLC, but just using a Montana LLC is not illegal. Using it and not complying with your home state's laws is illegal.
VERY well stated.
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