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Old 05-30-2015, 02:52 PM   #15
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As long as you physically live in another state and garage your RV in that state, don't try for a Montana LLC. However, if you're a full-timer you can do so legally.

Also, if you're a full-timer you can choose whatever state you want to domicile. Texas, South Dakota and Florida are the popular choices.

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Old 05-30-2015, 03:08 PM   #16
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It will be illegal to register in another state in order to evade taxes. If you want to reduce taxes you have to find out what the rules are and then follow them.

When you consider the amount of taxes that are charged it is a wonder why some states have a population at all.

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Old 05-30-2015, 04:06 PM   #17
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It can be done quite legally. Let me toss out a couple of examples that I've looked into deep enough to be sure it can be done.

If you're a California resident and you're planing to leave CA and move to some other state but you don't know where you can take out of state delivery, fill out the correct forms and file them with the CA BOE, get your CA registration and travel without paying any use tax. The down side, you can't come back into CA with the vehicle for a full 365 days. So you have to decide if that's good or bad. Now once you figure out where you want to move to you check that's states taxing requirement. Let's use Idaho for this example and it's rule is that you must have owned the vehicle for at least a full 90 days before becoming a resident. So you wait 90 days and travel around the country then finish your move to Idaho. This is totally legal, I've talked to the BOE to confirm although they did tell me to visit a field office with the paperwork because if you mailed the forms it could take 4 weeks for them to process it. BTW, California WILL audit you at the end of the year so you have to keep good travel records to prove you've been using and not just storing the RV out of state.

Now let's say you don't like the idea that you have to stay out of CA for a full year since you have family and friends you want to visit plus you have Disneyland Annual Passes and you like to visit the part several time a year. Well, then make a temporary move to a state that has no sales or use tax such as Oregon then buy you're RV. You can rent a very very small apartment for a few months while you figure out where you want to live. If that end up being the Oregon that's great but if not you then make another move once you've picked the new state, example Idaho. For Oregon this is best down if you say for at least 6 months. Anything because any less than that will raise red flags.

Let me toss out a variation on the above. Lets say you rent a place in Oregon and sigh a 6 month lease so you're meeting the letter of Oregon law. You've purchased you're new RV in Oregon and you're now looking for your final new home location both in Oregon and Idaho and you find it but it's only land in Idaho, could have been Oregon, and you've decided to have a house built but it's gong to take several months to build. This turns out to be very easy since having the 6 month lease allows you to Domicile in Oregon immediately and Oregon was one of your possible final locations.

This works for any state that has a time limit so states like Washington and South Dakota don't work since they basically have no limit so if you've not paid at least that states percentage of tax you'll have to pay it anyway. So in Washington that would be around 6 to 8% and South Dakota it's now 4%.

So both totally legal but there are pitfalls. The big one is that you may have to file up to 3 income take returns, one for each state, unless you leave one of the states by midnight on December 31. That can be a real PITA. You're going to have to pay up to three registration fees which is also going to be a PITA. You're going to likely have to change insurance companies multiple times and the same with health insurance. However if you're saving enough in taxes it may be well worth all of the pain.

Never said that it's easy to do and stay legal but it can be done but only you can decide if it's worth the pain.
John (N6BER), Joyce, Lucas (Golden Retriever mix), Bella (Great Pyrenees) and Lance (Great Pyrenees).
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Old 05-30-2015, 04:46 PM   #18
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We have run into this issue a few times with clients. You first need to determine the residency laws of your current state. Then you need to determine whether or not you can comply with those laws. The third step is to determine if you can prove your compliance with your state residency laws. Remember, the burden of proof is with the taxpayer, not the state. If you can meet all three requirements then you may be able to avoid the sales tax. The key points are compliance and documentation.

For the record we had one of our clients use the Montana LLC on a rig he purchased in Florida. He could not prove his compliance with NYS residency laws so it cost him.....big time.

Even if you have complied with your state's laws and you can document your compliance, it doesn't mean you won't have a fight with an over agressive state tax auditor. We have one residency audit that is now in its third year, so be aware that saving sales tax may be an expensive proposition.
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Old 05-30-2015, 04:55 PM   #19
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As you can see, there is no pat answer because each state has its own tax laws. Some will insist on tax being paid at purchase, but they may also allow a claim that the delivery is being made out of state and thus not taxed in the sale state. Further, the state where you register may give credit for any sales tax paid elsewhere, and thus collect nothing - or only any additional extra.

If you claim domicile in a state that has no sales tax and actually title it there, you may avoid any sales tax if you purchase in a state that allows for out-of-state delivery/transport.

If you claim domicile in a tax-free state but in fact maintain residence somewhere else, be prepared for a tax fraud lawsuit from your state of residence. They do NOT take tax fraud lightly! And they WILL find out.
Gary Brinck
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Homebase in the Ocala Nat'l Forest near Ocala, FL
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Old 05-30-2015, 07:36 PM   #20
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I live in Alabama, and our sales tax on a new RV is a very low 2 1/2%. My fifth wheel has never been in this state, and it stays in the North Georgia Mountains.

I couldn't title my RV in Georgia because I no longer have a Georgia driver's license.

I couldn't title my RV in Alabama because it must be physically inspected at the courthouse or by a certified officer of the law (policeman.) Talk about Catch 22.

Our small town police chief signed off on my trailer and I got my Alabama title. My Grand Design trailer was not in the NADA for ad valorem taxes, so they took some cheap little Forrest River brand as a comp.--and I'll be paying low taxes to get my yearly license.

You may have to research sales tax rates online. Chances are you'll need to get your drivers license and tow vehicle license in the same state, however.

You'll want to stay away from California and their 9.25% sales taxes. I bought a car there with title problems, and had to petition the Board of Equalization to order the license branch to issue me a title so I could get plates here.

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