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Old 05-12-2014, 03:27 PM   #1
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Who lives in Montana

Hi,

who lives in Montana and can answer the following question:

a friend of mine is thinking about to transfer the vehicles (RV and Car) from the corporate assets of the LLC, in his private assets. And with an address in Montana.

If I read that correctly, then falls for such a case, no sales tax or other tax. Or?


Thanks.
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Old 05-12-2014, 03:42 PM   #2
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Many folks try this dodge, many also claim residence in South Dakota for the same reason. Problem is, if they maintain a home in another place or park their vehicles for a period of time many states know this tax avoidance and come down hard on them. Massachusetts and New York state, among others, have been pretty successful collecting taxes AND PENALTIES from such scofflaws. Issues also arise from getting licenses renewed, etc. It also would be a problem for voter registration, not that such 'citizens' care. JMHO.
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Old 05-12-2014, 05:45 PM   #3
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Many folks try this dodge, many also claim residence in South Dakota for the same reason. Problem is, if they maintain a home in another place or park their vehicles for a period of time many states know this tax avoidance and come down hard on them. Massachusetts and New York state, among others, have been pretty successful collecting taxes AND PENALTIES from such scofflaws. Issues also arise from getting licenses renewed, etc. It also would be a problem for voter registration, not that such 'citizens' care. JMHO.
We'll we have residence in South Dakota and it was not to avoid taxes. We are full timers and pay sales tax whenever we register a vehicle there. We have registrations,licenses and all residence requirements there.

As for the OP's question . . . It would be wise to contact an attorney there and see what they say about it. We did a Montana LLc there and it was more aggravation than it was worth.
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Old 05-12-2014, 06:15 PM   #4
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I didn't mention full timers because that's a whole 'nother thing. If I was full timing I also would pick a place that was easy and didn't kill me in taxes. I'm talking about people that maintain a house and look for a way to reduce/avoid taxes on their RV.
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Old 05-13-2014, 09:55 AM   #5
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The latest issue of Escapee's magazine has a very good article on this topic, you might want to read it.

We're already seeing states challenging other states over the residency and LLC issue. Iowa is calling out its residents who form an LLC in MT to avoid paying taxes on their RVs.

As states try to scrap up every available dime, they and the Feds are looking to close loopholes and collect what's due them. The article states about even having your personal effects in storage in one state while you're claiming residency in another can be used to challenge your claims of residency. I think the gov't both state and Federal are demanding that what ever state you are claiming as your state of residency you fully intend to reside there once you stop full timing.

So you may be enjoying residency rights in one state while your possessions are stored somewhere else...but expect that to change if mandates for residency change. I have heard too that this will also apply to vacation or recreation property...vacation cottage, fishing/hunting cabin or any unoccupied land you hold title to or lease.

As RVing grows in popularity for other than recreational only purposes, it will garner more attention and no doubt see greater regulation as it pertains to taxation.
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Old 05-13-2014, 10:44 AM   #6
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I didn't mention full timers because that's a whole 'nother thing. If I was full timing I also would pick a place that was easy and didn't kill me in taxes. I'm talking about people that maintain a house and look for a way to reduce/avoid taxes on their RV.
I own houses in multiple states, why wouldn't I want to reduce/avoid taxes legally?

I do not full time, but States make their laws to establish how you should register vehicles, and many State Laws conflict with their neighboring State. So if you Full Time you have a right to pick a place more convenient to you and "didn't kill me in taxes" but since you are not full timing you shouldn't utilize legal measures to minimize your tax liability?
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Old 05-13-2014, 01:53 PM   #7
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I own houses in multiple states, why wouldn't I want to reduce/avoid taxes legally?

I do not full time, but States make their laws to establish how you should register vehicles, and many State Laws conflict with their neighboring State. So if you Full Time you have a right to pick a place more convenient to you and "didn't kill me in taxes" but since you are not full timing you shouldn't utilize legal measures to minimize your tax liability?

Johnny, the operative word in your post is "legally." To establish your residency in a given state you would need to follow the laws of that state. The simple answers to your question are what state do you vote in? What state is your driver's license from? And in which state do you spend the most time? Most states have strict residency rules which relate to vehicle registration and also state income tax. I've been fighting with NYS for a client who moved to Florida in 2003 and they just can't seem to understand that the guy doesn't live in NY.

To claim residency in any given state you need to determine what those laws are for that state, comply with those laws, and document your compliance. All three of those issues are critical. Failure to comply can cause grief to come into your life and dollars to go out.
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Old 05-13-2014, 02:30 PM   #8
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Old 05-13-2014, 03:12 PM   #9
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Johnny, the operative word in your post is "legally." To establish your residency in a given state you would need to follow the laws of that state. The simple answers to your question are what state do you vote in? What state is your driver's license from? And in which state do you spend the most time? Most states have strict residency rules which relate to vehicle registration and also state income tax. I've been fighting with NYS for a client who moved to Florida in 2003 and they just can't seem to understand that the guy doesn't live in NY.

To claim residency in any given state you need to determine what those laws are for that state, comply with those laws, and document your compliance. All three of those issues are critical. Failure to comply can cause grief to come into your life and dollars to go out.
Residency has little to do with registration of vehicles. My company has vehicles in many states, the state the vehicle is garaged is the State it is licensed in per the various States.

I also own several vehicles personally and leave these vehicles at my homes in various States, currently 3. These vehicles are also registered in these 3 different States. 2 of these 3 States I am NOT a resident or registered to vote. The state I am a resident and registered to vote has no taxing authority for these vehicles garaged in other States per the State DMV, and in fact, the State DMV of where 2 of my personal vehicles are "garaged" are the very ones who forced me to register them in their State, one worked to my advantage, one didn't.

Per my attorney, per various States where I own homes, per my CPA this is the correct (legal) way to do it. It has nothing to do with where I vote, where my Drivers License is from or pay State Income Tax.

I also pay State Income Tax based on which State I earn my money, again has nothing to do which State I vote in. Ask any Major League Player if they pay State Income Tax on which State they earned their money?

There are many legal ways to minimize tax liabilities if you do it correctly and can prove it, is my only point.

I currently have vehicles I own which have never been in the State I vote in or pay the majority of my State Income Tax, or where my Drivers License is from. I have been audited by both State and Federal Governments and have never had an issue. I have spoken with the State Department of Motor Vehicles and have never had an issue.

My spouse drives a Company Vehicle which is owned by her employer, but it is licensed (registered) in the State where she works and garages the vehicle.

I do think original poster may have a way to move his vehicle from his MT company to his name individually IF he/she is or establishes residency in a State that doesn't charge sales tax on vehicles like MT or if he owns his Company and gifts the vehicle to their Trust or Individual name. If I move a company vehicle from my company to my Trust or individual in my State of Residency, sales tax is due.

There are many complex issues regarding tax, my only point to BFFLIN181 was the OP should explore his question with competent legal counsel and just because someone is minimizing their tax liability doesn't make them scofflaws. My other point was why should a Full Timer RV feel entitled to minimize his tax liability while a non Full Timer is not?

I am not judging, just attempting to get the facts to the original poster who should not feel guilty of minimizing a tax.
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Old 05-13-2014, 07:44 PM   #10
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Johnny, the only issue I have with what you have posted is the difference between a business vehicle garaged in a particular state due to the business operating in that state and a personal vehicle which has no business use and is not garaged in the state in which it is licensed. For example, licensing a vehicle in MT while garaging it in NY will get you a visit from our friendly taxation and finance folks. This is exactly what happened to one of my clients and there have certainly been other states that have their minions out looking for what they determine to be someone who is avoiding sales tax or other registration fees or taxes. Each state is different but licensing personal vehicles in other states in which one has no real estate or no ties to that state can get one in hot water.
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Old 05-13-2014, 08:14 PM   #11
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Johnny, the only issue I have with what you have posted is the difference between a business vehicle garaged in a particular state due to the business operating in that state and a personal vehicle which has no business use and is not garaged in the state in which it is licensed. For example, licensing a vehicle in MT while garaging it in NY will get you a visit from our friendly taxation and finance folks. This is exactly what happened to one of my clients and there have certainly been other states that have their minions out looking for what they determine to be someone who is avoiding sales tax or other registration fees or taxes. Each state is different but licensing personal vehicles in other states in which one has no real estate or no ties to that state can get one in hot water.
I agree 100%, the OP doesn't clarify if MT was state of residence or if establishing real estate transaction. My only issue is everyone assumes you can't license personally titled vehicles in states other than your resident state which isn't true. I have a homes in other States and leave a vehicle there and tag the vehicle at that address, I do not have a drivers license in that state, I am not registered to vote in that state, and do not pay any State Income Tax.

I am also careful to not have that vehicle in my state of residence on a regular basis, I try never to buy fuel or any service in my resident state. My point is there are legal ways to accomplish what OP was inquiring about and consulting with a reputable tax attorney may assist in doing it legally.

I also took exception to a statement that a full timer minimizing tax but if you have a stick house you shouldn't be entitled to minimizing your tax. No problems, just attempting to assist OP and providing what I believe is factual information of legal ways to handle a personally titled vehicle. Garaging is a major factor.
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Old 05-14-2014, 06:46 AM   #12
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The only other caution I would provide to the OP is to be careful of the advice of the Montana attorney. My client relied on a "highly recommended" firm and when NYS came calling they just said, we're not licensed in NY so you are on your own.

Johnny has his bases covered by not taking his other state vehicles into his home state and by having ties, via real estate or other means, to the states in which he is licensing vehicles. The problem arises when people use another state for registration but bring and keep that vehicle in their home state. That's when the fertilizer hits the ventilator, to paraphrase the old expression.
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