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Old 04-23-2016, 08:18 AM   #29
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Tim,

Avoiding the tax is not illegal. Evading tax is illegal. We have had clients who have used the Montana LLC successfully and we had one who did not. It comes down to literally finding out what the laws are for Florida and then determining if you can comply with the requirements and document those requirements. That's it.

My one client who got nailed by NY Taxation and Finance had also used Bennett. When he got the notice from NYS he contacted Bennett. Their rather terse reply was that they were not licensed to practice in NY so he was on his own.

When we have to defend clients who had interpreted the tax law to their benefit we always look to whether or not our client had complied with the law and they had accurately documented that compliance. If they had met those requirements then it becomes easy to challenge the taxation folks. If not, well, then that falls under the heading of "you take your chances" and there isn't a lot we can do.
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Old 04-23-2016, 10:07 AM   #30
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Timjet, if you go to Travelhawks clicky on "45' motorhomes" you will find another clicky that will show you all the restricted roads in Calif. Some of them can be driven by a 45' motorhome with an experienced driver. A lot of them cannot. Save that website and use it to plan your No Cal trip. It could save you some big headaches.
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Old 04-23-2016, 11:30 AM   #31
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This has been an EXTREMELY informative post... the California Approved / Restricted map was a shocking eye-opener; I had no idea many of those roads prohibited my 42.5' motorhome. I was planning on driving down 128 from Geyserville to Napa next week... not anymore, so thank you for that!

Back to the OP's original topic regarding Montana LLC's, I can tell you from personal experience that the protections of any LLC in any state are a lot of work and expense to maintain. One wrong form, one missed filing, one bad entry in a ledger and all your protections could go out the window, exposing you to any number of violations. I've owned and operated several business through a variety of LLC's in many "tax haven" states and it isn't easy to follow all the rules you need to follow in order to enjoy their protections; you really need to know what you're doing or hire someone who does.

In my opinion, it's simply not worth the effort just to avoid the sales tax on an RV. I know the sales tax in some states is astronomical and it's tempting to try to legally avoid that this way, and that's a fine goal, but the amount of work you have to put in after-the-fact to do it right is equally astronomical... and the failures you hear about are usually about those who didn't do all the follow-up work correctly or in a timely manner. Who needs the headache?

If you already operate some kind of business and you can legitimately claim that your RV is part of that business - like towing a race car, selling arts and crafts, traveling motivational speaker, etc. - then go for it! It can really work for you if you're willing to put the work into it. But just setting up a shell company in one state to avoid a sales tax in another is just asking for trouble... in my opinion.
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Old 04-23-2016, 01:21 PM   #32
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You cheat the state so I can pay more taxes. It's called tax evasion. You live there support the system or move.
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Old 04-23-2016, 03:03 PM   #33
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Pay the taxes or move. More and more States are pursuing people that used the Montana loophole. Getting caught will cost you a lot more than 6%.
I'm a FL resident and paid my FL tax. It's not like FL has a surplus in its coffers--pay your fair share!
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Old 04-23-2016, 03:27 PM   #34
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I live in Florida and cosidered using a Montana LLC, but I decided to pay the sales tax as I don't think the LLC is legal in my circumstances. IF the RV never comes into Florida, or IF the owner has his legal residence in a state other than Florida, I think it is okay. But for a Florida resident, I think it is tax evasion and I think the state of Florida would agree with me.

All just my opinion, as I am not a lawyer. Before deciding this issue a Florida lawyer should be consulted.
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Old 04-23-2016, 05:29 PM   #35
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To all that believe that the use of a Montana LLC is tax evasion, you really need to think about what you are saying. Let me give you an example. Do you deduct the interest on your rig as a interest on a second home? If you do, don't you think it's tax evasion? Of course you don't because the law allows you to take that deduction and there is no question in your mind or that of your accountant that the deduction is legal.

It's a similar situation with a Montana LLC. Let's say, for example that the law in Florida is that a vehicle is a Florida domiciled vehicle if it is present in the state for 31 consecutive days. Every 29 days you take that rig and drive into Georgia and fill up with fuel and drive back. Do you think that is tax evasion? In case you don't know, it isn't tax evasion any more than taking the deduction for RV interest as a second home is tax evasion. You are only doing what the law allows.

Would I consider using a Montana LLC? I might, but I would make darn sure that I was able to comply with the laws of NYS and that I can document that compliance. It isn't rocket science nor is it a question of morality. If one is doing what the law allows and you don't like it then maybe you should be looking at getting the law changed rather than judging those who use the law to their advantage.
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Old 04-23-2016, 09:22 PM   #36
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To all that believe that the use of a Montana LLC is tax evasion, you really need to think about what you are saying. Let me give you an example. Do you deduct the interest on your rig as a interest on a second home? If you do, don't you think it's tax evasion? Of course you don't because the law allows you to take that deduction and there is no question in your mind or that of your accountant that the deduction is legal.

It's a similar situation with a Montana LLC. Let's say, for example that the law in Florida is that a vehicle is a Florida domiciled vehicle if it is present in the state for 31 consecutive days. Every 29 days you take that rig and drive into Georgia and fill up with fuel and drive back. Do you think that is tax evasion? In case you don't know, it isn't tax evasion any more than taking the deduction for RV interest as a second home is tax evasion. You are only doing what the law allows.

Would I consider using a Montana LLC? I might, but I would make darn sure that I was able to comply with the laws of NYS and that I can document that compliance. It isn't rocket science nor is it a question of morality. If one is doing what the law allows and you don't like it then maybe you should be looking at getting the law changed rather than judging those who use the law to their advantage.
Nothing personal - but if the only tie you have to the state of Montana is the L.L.C. that holds the title to your motor home ... you're working to hard to screw the state(s) you DO live in out of revenue - as well as the rest of us that DO pay our taxes.

As far as for your comments about morality - where I come from, if it walks like a duck and talks like a duck ... regardless of how many lawyers try to argue it differently.
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Old 04-23-2016, 09:34 PM   #37
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I think it's pretty simple you choose to live somewhere for a lot of reasons. You can't have your cake and eat it too. There are pros and cons to living anywhere, if it's not meeting your needs then move to the place that does. Like said why should you pay less taxes so those of us who follow and accept the rules pay more. If having a MH is important to you, and you can afford it, you really shouldn't be whining about a 6% sales tax. We pay 8% sales tax or more in California depending on where you live within the State.

I don't understand why people would suggest you consult a Lawyer to find a way to get around paying your required taxes. Seems to me that you would spend any money you were going to save on taxes, on the Lawyer, and then if it's contested even more money defending yourself.
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Old 04-23-2016, 11:26 PM   #38
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I think it's pretty simple you choose to live somewhere for a lot of reasons. You can't have your cake and eat it too. There are pros and cons to living anywhere, if it's not meeting your needs then move to the place that does. Like said why should you pay less taxes so those of us who follow and accept the rules pay more. If having a MH is important to you, and you can afford it, you really shouldn't be whining about a 6% sales tax. We pay 8% sales tax or more in California depending on where you live within the State.

I don't understand why people would suggest you consult a Lawyer to find a way to get around paying your required taxes. Seems to me that you would spend any money you were going to save on taxes, on the Lawyer, and then if it's contested even more money defending yourself.
The operative word in your discussion is "required" and that is the key. Do you pay taxes you do not owe? Do you not deduct mortgage interest because you feel you need to pay more taxes? Do you ignore your charitable contributions so that more tax revenue will flow to the federal government? Do you increase your state taxes that you pay because you want to help out your state government?

The whole key is compliance with the law. Not once in any of my comments have I suggested that anyone violate any laws. The discussion comes down to can you comply with the laws of your state and document that compliance. If you can and the use of a Montana LLC falls within those parameters then you have violated no laws and cheated NO ONE! Again, I would not do it because I cannot comply with the laws of my state so I would not use a Montana LLC.
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Old 04-24-2016, 01:03 AM   #39
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The operative word in your discussion is "required" and that is the key. Do you pay taxes you do not owe? Do you not deduct mortgage interest because you feel you need to pay more taxes? Do you ignore your charitable contributions so that more tax revenue will flow to the federal government? Do you increase your state taxes that you pay because you want to help out your state government?

The whole key is compliance with the law. Not once in any of my comments have I suggested that anyone violate any laws. The discussion comes down to can you comply with the laws of your state and document that compliance. If you can and the use of a Montana LLC falls within those parameters then you have violated no laws and cheated NO ONE! Again, I would not do it because I cannot comply with the laws of my state so I would not use a Montana LLC.
With all due respect, I think You are missing my point I guess...I live in California and yes I take whatever deductions I am due, no more no less, when paying my taxes, based on where I live and the laws of our State. Those deductions are what are documented by the bills I pay, property taxes, contributions ect. and are expected to be used in the way I am by EVERYONE, not just me. I don't make up some LLC in a State that has a better Taxation just to avoid paying what I should. When you do your annual taxes how much you get back or have to pay, is all based on what was deducted from your pay/investment returns, and what you either overpaid or underpaid as a total for the year, based on your income and allotted deductions.

But I certainly don't work around the system. The "whole key" is being morally responsible. If you live and work in Florida and now you want a MH but don't want to pay a 6% sales tax, then don't buy one, or move to wherever it is you think you are going to save a few bucks. But to play games to circumvent the system is taking advantage of those who otherwise pay their fair share of taxes for what they own or where they live, and their income. Just my opinion, but if it sounds fishy, it probably is, and if you have to worry about it as you could get caught on the wrong side of the law, it probably isn't the right thing to do in the first place...... Is it really worth the savings or your reputation. If you can afford a luxury such as a MH then you certainly should be able to afford the taxes that go along with it.
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Old 04-24-2016, 06:27 AM   #40
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Some are missing the point or would rather ignore it and play the morality card.

If it is legal to avoid paying a certain tax, it is LEGAL. If it is not you are in violation of the law. Morality aside I don't see any issue with investigating all possible and legal ways to minimize one's tax bill.
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Old 04-24-2016, 06:44 AM   #41
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Some are missing the point or would rather ignore it and play the morality card.

If it is legal to avoid paying a certain tax, it is LEGAL. If it is not you are in violation of the law. Morality aside I don't see any issue with investigating all possible and legal ways to minimize one's tax bill.

And that Tim is exactly the point! Reducing one's tax bill has been a RIGHT established years ago and confirmed in the US Supreme Court by Judge Learned Hand. Doing what the law allows is what we all do. Doing things which the law does not allow is what none of us should do.

Investigating what can and can't be done taxwise is no different than shopping around for the best price for your purchase.
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Old 04-24-2016, 07:09 AM   #42
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Well stated.


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