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Old 08-29-2015, 05:19 PM   #1
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Your ideas about LLC registration

Bought our first RV coach this summer........and had no idea what our state would charge for plates......was shocked to find it was in excess of $1000.00 per year. We have friends that have their coach in an LLC and have a life time plate since their coach is over ten years old. They also saved the cost of sales tax on their purchase since the state has no sales tax. I know this is legal so would like to hear some conversation about it......along with where to have one set up.....without making an attorney rich......yes..I always look to save money when I can.....
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Old 08-29-2015, 05:54 PM   #2
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Quote:
Originally Posted by daryl989mich View Post
I know this is legal so would like to hear some conversation about it......along so with where to have one set up.....without making an attorney rich......yes..I always look to save money when I can.....
Be sure you know the consequences concerning the state you call "Home".

Is it legal? Maybe yes, maybe no.

Recently states have been going after individuals with LLC's for tax evasion.

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Old 08-29-2015, 06:38 PM   #3
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There are laws against tax evasion, plain and simple. If you have a valid reason to set up an LLC, that's one thing, but if its for the single reason to avoid taxes etc on the motorhome, its probably not a good idea.
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Old 08-29-2015, 06:41 PM   #4
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I checked into this and decided it wasn't worth the risk. Yes, it's legal to set up a LLC in Montana or wherever, but your home state is the one that will get you. Check the laws in your home state VERY CAREFULLY.
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Old 08-29-2015, 07:07 PM   #5
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This discussion comes up every so often. First off anyone can set up an LLC. Contrary to what many folks think, an LLC is not necessarity a buiness, but rather an asset protection vehicle. It's purpose is to limit legal liability by creating a separate entity which limits liability to that entity.

Now, that being said, using an LLC to avoid taxes can be a tricky proposition. First you need to find out the residency laws of your state. If you can comply with the requirements of living in your particular state and owning an LLC in another state which owns your vehicle which may be garaged in your state, then you must determine if you can document that compliance. Remember that the burden of proof in taxation rests with the taxpayer, not the state. If you can't prove your compliance, then you are SOL (slightly out of luck, or words to that effect) and may owe the taxes, penalties, and interest.

In summary, find out your state's laws and determine your ability to document that compliance. Can you comply and can you document your compliance? If you can answer yes, then go for it. If you can't answer yes then save yourself money and time and aggravation and pay the taxes.
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Old 08-29-2015, 07:18 PM   #6
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Could have saved the almost 10% sales/use tax on our rig but the consequences here in WA just aren't worth it. But our yearly tags are only $170 and no income tax.
I also have a copy of a court case here in WA where the state pierced the corporate veil and went after the WA residents for back sales/use tax and fines. Took the State a couple years of investigation but they did it.
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Old 08-30-2015, 01:01 PM   #7
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A LLC out of state

Let me try another question.....does anyone from Michigan have their coach in a LLC in another state? If so, what are the up and down sides of this arrangement!? Thanks for your imput..
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Old 08-30-2015, 01:16 PM   #8
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There are laws against tax evasion, plain and simple. If you have a valid reason to set up an LLC, that's one thing, but if its for the single reason to avoid taxes etc on the motorhome, its probably not a good idea.
Avoiding taxes is not illegal. But is used everyday by those with investments with IRS approved methods......I.e. some avoid nearly all taxes legally with the help of tax specialist......corporations pay zero taxes by using tax avoiding methods.......with that said....if setting up a LLC to avoid paying unreasonable fees, taxes, etc,....how can one not use it to save money. Is it a loophole? Maybe......but until the laws are changed why not use the rules to ones advantage?
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Old 08-30-2015, 03:42 PM   #9
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The folks that have problems live in another state and own property and work. There are no issues if you're a full-time RVer who doesn't work and doesn't own property in another state. Full-timers can domicile in any state they choose.
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Old 08-30-2015, 07:48 PM   #10
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Avoiding taxes is not illegal. But is used everyday by those with investments with IRS approved methods......I.e. some avoid nearly all taxes legally with the help of tax specialist......corporations pay zero taxes by using tax avoiding methods.......with that said....if setting up a LLC to avoid paying unreasonable fees, taxes, etc,....how can one not use it to save money. Is it a loophole? Maybe......but until the laws are changed why not use the rules to ones advantage?
There are numberous misconeptions about taxes. One of the most common is that there is some magical investment that avoids all taxes. The only thing that comes close is a municipal bond which is tax free by the Constitution and that is it. Advantageous rates? Yes, absolutely. That's one of the reasons the stock market has shot up the way it has.

Getting back to the LLC issue.....the problem here is one of residency. If you live in state X and garage a vehicle in State X then it doesn't matter if you license it in an LLC. The vehicle is RESIDENT in a state and is subject to that states tax laws regardless of the domain in which the ownership resides. For example, a Michigan vehicle owned by a Montana LLC and garaged in Michigan is subject to Michigan taxes.

If you can find out exactly what the residency laws are for Michigan and you can comply with the requirements and document your compliance then go for it. If you can't then don't do it. Fairly simple really.
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Old 08-30-2015, 09:40 PM   #11
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I think another problem is insurance. I could be a problem getting insurance for a LLC.
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Old 08-30-2015, 09:59 PM   #12
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Could have saved the almost 10% sales/use tax on our rig but the consequences here in WA just aren't worth it. But our yearly tags are only $170 and no income tax.
I also have a copy of a court case here in WA where the state pierced the corporate veil and went after the WA residents for back sales/use tax and fines. Took the State a couple years of investigation but they did it.

Truth!!

I could write about this until everyone here nodded off and thanked me for curing insomnia!

RD version:
The steps that many states in general, and I can speak to Washington specifically, do both in terms of investigations and enforcement, might surprise you. The penalties here are brutal, and good representation is $$$ as well.

I say this to the OP: Be very particular who you get your information from when it's time to actually act. Forum stuff is great, but you will have one foot in the potential tax fraud/legal realm, and the other on synthetic grease smeared on polished ice. If/when any well thought out plan goes sideways, none of the "he said/she said/but I thought" stuff means squat.

Disclosure: I am on the representin' side, not the 'got caught' side.
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Old 08-30-2015, 11:20 PM   #13
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Avoiding taxes is not illegal.......
You're absolutely right, Daryl. Tax avoidance is everyone's right; tax evasion is not. The two are separated by a blurry, sometimes indistinguishable line. Firmly stuck in the mud in the middle of the blurry part-- along with dozens of other tactics-- is the RV/LLC business. It works for some; some have been nicked and nailed. Personally, I don't like it.

A wise old Boston lawyer (my Dad) once told me the easiest way to avoid falling off a cliff is to stay the hell away from the edge.

Good Luck!
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Old 08-31-2015, 07:54 AM   #14
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A few years ago some states (Notabally Colorado, and I think California, Seem to recall there was one or two others) went after LLCers..

First: a fact: The reason to establish an LLC is to cheat the tax man out of what HE feels is HIS due. (This has nothing to do with what you and/or I feel.. It is about what HE feels is his DUE)

Second: Some fiction.... Once read a story where a Tax man was one of the characters.. Another character had special powers and when she shook his hand she got a flash of memory. (His) Him standing there admiring his nice new SS uniform. Seems lots of folks think the IRS (And state treasurey) is the SS.. (Again my feelings (and yours) do not matter here... but frankly... Well.. Please do not express your opinion).


Thus the state decides how much you owe.. and the state tends to be very generous with YOUR money.. Oh and they charge Penalty and interest too.


And in addition to the states doing it.. Several others were looking into it a few years back.. Will it happen again.. I suspect it will.. When.. I have no clue. Can your vote change when/if it happens? Likely it can.. but.. Which way to vote I have no idea. And please let's leave it at NO IDEA.
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