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Old 11-12-2013, 09:24 PM   #1
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Montana LLC - Old Topic - New Pain

Just a quick note about setting up an LLC in Montana to avoid sales tax, etc. While it appears perfectly legal look out. I used Deer Creek and they did everything promised. For three years all has been well, then this fall I got a $7,000 bill from Indiana. They knew I had owned a Jeep and two motorhomes under my Montana LLC. I bargained the state own some, but ouch. Out of nowhere I had to cough up five grand for Indiana.
Lesson - if it sounds legal and proper, it may not be and Deer Creek doesn't tell you that.
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Old 11-12-2013, 10:11 PM   #2
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They got a bunch of people here in Colorado for evading taxes a couple years ago. They had been using Montana tags but living here.
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Old 11-12-2013, 10:14 PM   #3
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Did you study up on the laws regarding aowning a LLC in Indiana? and if so what did you miss? The LLC owned those 3 auto's not you so there must of bee something missed in the laws in your state and they got you. What did Deer Creek have to say?
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Old 11-12-2013, 10:28 PM   #4
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Lots of warnings for things like this have been posted over the years. If you qualify then it perfectly legal to do. But, even if a Montana law firm says it's OK you still may get caught like the OP was.
WA got one couple for something over $25,000 in back taxes and fines a few years back. I have a redacted copy of the case on my hard drive.
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Old 11-12-2013, 10:32 PM   #5
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Quote:
Originally Posted by MaxTurner1 View Post
Just a quick note about setting up an LLC in Montana to avoid sales tax, etc. While it appears perfectly legal look out. I used Deer Creek and they did everything promised. For three years all has been well, then this fall I got a $7,000 bill from Indiana. They knew I had owned a Jeep and two motorhomes under my Montana LLC. I bargained the state own some, but ouch. Out of nowhere I had to cough up five grand for Indiana.
Lesson - if it sounds legal and proper, it may not be and Deer Creek doesn't tell you that.
Were you garaging the Motorhomes and Jeep in Indiana?

I'm pretty sure, and not saying that you were, but registering in Montana and garaging in your home state - just to avoid taxes - can certainly get you in trouble.

If you're garaging in your home state, maybe some neighbors saw the Montana plates and turned you in. Maybe a town official saw the Montana plates on multiple occassions and turned you in.

I've read other stories on this, and other forums, about how other people with Montana LLC's have been "busted". Towing a car registered in their home state, while the RV is registered in Montana ... the list goes on.

I guess it comes down to risk vs reward *if* there is not a legitimate reason for a Montana LLC. - which I certainly can't comment on in your case - just making a generalized comment.
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Old 11-13-2013, 12:29 AM   #6
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I totally agree. Here in Washington a lot of people will go to Oregon and register their
vehicles to save taxes. A lot of them get turned in because of the time limits each
state puts on registration in the state the rig is in.

Most seems is between 30 and 90 days.

I stressed about this in 2010 while work camping in Cali. We worked for about 5 months. Then they gave us a layoff. We stayed on for 12 Hours each a week for
the winter.

It seems that you can get away with the Montana LLc, The SD, or Tx. as long as you
are not residing there full time.
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Old 11-13-2013, 12:40 AM   #7
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I totally agree. Here in Washington a lot of people will go to Oregon and register their vehicles to save taxes. A lot of them get turned in because of the time limits each state puts on registration in the state the rig is in.

Most seems is between 30 and 90 days.

I stressed about this in 2010 while work camping in Cali. We worked for about 5 months. Then they gave us a layoff. We stayed on for 12 Hours each a week for the winter.

It seems that you can get away with the Montana LLc, The SD, or Tx. as long as you are not residing there full time.
And the State Patrol will sit on the on and off ramps at morning and afternoon rush hours taking down license plate numbers, then run them through the voters registration, PUD, gas and water companies to find out if they live here. I love to see them at the schools when the out of state vehicles line up to drop off or pick up their kids!

I looked into taking a job in CA and living in my MH, after something like 90 days I had to register the MH and car in CA and pay the sales/use tax on it even though my domicile was in WA.
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Old 11-13-2013, 08:18 AM   #8
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Yep, we also had a client get nailed by NYS for his Montana LLC. You need to know the residency laws of your own state as well as the Montana LLC requirements. When my guy got nailed by NY, he called his Montana lawyer who informed him that they couldn't help him because they are not licensed in NY.

If someone wants to use a Montana LLC, they need to:
1. Know your state's laws on residency and registration
2. Comply with those laws
3. Document your compliance

If someone doesn't follow those steps they'll stand a good chance of getting nailed and having it cost them many $$$.
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Old 11-13-2013, 09:00 AM   #9
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Sorry for your troubles. This is one of the first times I can recall a member reporting first hand experience with this. There are many news stories and anecdotes about a friend of a friend... but usually not first hand accounts.

Can you share where you went wrong? If you complied with everything the law firm told you to do... what is it that your state said didn't cut it?

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Old 11-13-2013, 09:04 AM   #10
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This may be more sidebar addressing snow birds but it seems to be well in the same pathway of how the whole LLC thing can or can't work from a legal standpoint.

Snowbirds, fly cautiously Bankrate, Inc.

The word of warning from a financial expert is, "They will add up your utility bills. They will check where your cellphone is and where your landline is; whether you have a Florida or a New York E-Z Pass. Don't play games. Gimmicks don't work."

Also from the good folks at RV Dreams Could RV Living Be Your Dream? Let's Find Out!!

What About Using A Montana LLC To Avoid Sales Tax?

That article has some very clear comments from OTHER states that categorize Montana LLCs as means for tax EVASION. On very pertinent statement was
And here is an excerpt from a November 26, 2006 article in the Bozeman (Montana) Daily Chronicle:
Dean Roberts, administrator of the Montana Department of Justice Motor Vehicle Division, said the problem is not just buyers from California.
"It's Texas, Florida, pretty much places where people winter," Roberts said.
Even though the process is legal in Montana, Roberts said, there is a legal courtesy to consider.
"We have some obligations to protect the laws of the other 49 states," he said.






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Old 11-13-2013, 09:19 AM   #11
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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.
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Old 11-13-2013, 09:25 AM   #12
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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.

Wow what a surprise when I got the tax bill. The state used a price book of some kind to value my vehicles, so I disputed the values they used. They came down a few thousand and I paid the $ 5,000.

Deer Creek's web site has changed. It has a lengthy disclaimer NOW. Needless to say they just walk-around saying you will wind up paying your state, plus penalties and interest.

I have to say Deer Creek did what they say, they just forget to tell you that all you're doing is giving them money.

I hope others don't fall for this.
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Old 11-13-2013, 09:56 AM   #13
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Quote:
Originally Posted by MaxTurner1 View Post
Just a quick note about setting up an LLC in Montana to avoid sales tax, etc. While it appears perfectly legal look out. I used Deer Creek and they did everything promised. For three years all has been well, then this fall I got a $7,000 bill from Indiana. They knew I had owned a Jeep and two motorhomes under my Montana LLC. I bargained the state own some, but ouch. Out of nowhere I had to cough up five grand for Indiana.
Lesson - if it sounds legal and proper, it may not be and Deer Creek doesn't tell you that.
YOU are responsible for YOU, and of knowing of the governing laws of your home state.

Easy!


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Old 11-13-2013, 10:31 AM   #14
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Originally Posted by MaxTurner1 View Post
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.

Wow what a surprise when I got the tax bill. The state used a price book of some kind to value my vehicles, so I disputed the values they used. They came down a few thousand and I paid the $ 5,000.

Deer Creek's web site has changed. It has a lengthy disclaimer NOW. Needless to say they just walk-around saying you will wind up paying your state, plus penalties and interest.

I have to say Deer Creek did what they say, they just forget to tell you that all you're doing is giving them money.

I hope others don't fall for this.
Sorry it worked out this way for you. Thanks for sharing your first-hand experience; it might help someone else along the way.
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