Montana LLC, SD or TX Residency

Hidesert · 11-21-2009, 11:29 AM

The wife and I are selling the stick house in Calif, planning on FT in a DPMH. So I have been reading about how people are making an LLC for the purpose of ownership of the MH. What are the advantages and disadvantages of doing this? As well as residency in either SD or Tx. I have read up on the SD bennies, at least they are bennies if your leaving the lousy state of Calif.
We are both retired and can't wait to hit the road.

EngineerMike · 11-21-2009, 11:41 AM

Go to the iRV2 Forums home page, and do a Search on your various options. You'll find more info than you can digest in a day.

Personally I'd recommend SD and going there to establish residency. Here is a thread on SD Changes coming for 2010 that is active now, so maybe you want to go there after Thanksgiving? The LLC route has paperwork and costs that SD residency doesn't, and if you are truly full time, you are free to chose the domicile that fits/works best.

DonnaB · 11-22-2009, 06:23 AM

For a more economical LLC setup contact:
MT Corp Services
Helen Fandrich
406.227.7665
mobile: 406.431.3353
fax: 406.227.7991
MTCORPSERV@HOTMAIL.COM

Call and she will talk to you as long as you need. Her service is great, which you really appreciate once you are on the road and often out of pocket. Her price is less than half of most law firms. She is not a lawyer, but can refer you to one if required. A lawyer is not required to do the filing.

Jim Stewart · 11-22-2009, 06:55 AM

In 1998 when my DW and I decided to fulltime, we did the following.

1. Ordered a MH (Newmar)
2. Got a P.O. Box for address in Montana.
3. Picked up the MH in Napanee Indiana with Indiana temp plates.
4. Drove to Montana and registered the MH there using our P.O. Box (no sales tax).
5. Drove to Texas and established residency by getting our Texas Driver's License, Voter Registration and mail forwarding service (Escapees address)
6. Got the MH inspected to verify vehicle ID and got Texas license plates (no income tax in Texas).

This did not require an LLC, no sales tax and just had the cost of the trip (got to see a good bit of scenery along the way) and the extra cost of plates and registration in Montana. I do not know if this is still possible (legal).

Three notes:

The governments, both State and Federal, are starting to clamp down on LLCs specifically set up to avoid taxes (the attorneys will never tell you this, but you can bet they have a disclaimer in the contract you sign with them).

In California, if you earned your retirements there and they would be taxable in California if you were a resident, they are still taxed by California even if you move or change your State of residence.

LLCs do not protect you from personal liability if the LLC is not an operating company. LLCs create a false sense of security and are a way for Attorneys to make extra money. Any truthful or good Attorney will tell you this.

Hidesert · 11-22-2009, 07:51 AM

Thanks everyone, looks like we can start changing some of the our billing address to SD. That was our original plan was to go through SD. And Im going to happily pay the registration fees for SD.

gbs2320 · 11-22-2009, 07:52 AM

LLCs are one of the few ways to legally manage your taxes, especially if you are not a fulltimer who can legally change your personal residency to another state The borrowing of an address to pretend you are a resident of another state is often highly illegal. The LLC is a separate legal entity which owns the Motorhome. So if the LLC is setup in Montana with a Montana registered agent, the LLC is a resident of Montana and Montana laws control. As with any alternative legal entity like a Corporation an LLC can have its corporate veil pierced (although it does not happen that often) (i.e., legal liability extended to the owners) if corporate formalities in running the entity are not followed (i.e., hold the annual meeting (takes 2 minutes), keep the minutes of the meeting, sign all docs with the name of the LLC not your name (only sign your name on behalf of the LLC noting your offical title with the LLC), insurance for motorhome in the name of the LLC, etc.). The issue is not whether the LLC is an operating company. In any event it is operating by owning a motorhome. I used the Bennett law because they are attorneys very experienced with this matter and they also give you guidence on how the LLC will work in terms of the application if any of the law of the state in which list as your residence. For example in Va we have 3% state sales tax on vehicle purchase which does not apply and yearly personal property tax based on the county in which the motorhome is garaged (my county charges 6% on half of market value) on vehicles, motorhomes, boats etc. which also does not apply because the motorhome is registered in MT and owned by a MT legal entity. The Bennet firm pointed out that under Va law the MT LLC would have to register the MH in Va (and thus presumably pay personal property taxes) if it is located in Va "for a period of 6 months". The law does not define whether the period of 6 months is conscequtive or cummulative. My intent is to be out of state with my motorhome over 6 months out of any 12 month period. Greg (retired attorney)

Vegasdan · 11-23-2009, 03:10 PM

SD works because it is simple. 3% fee on the purchase of the MH, no personal property taxes, no state income taxes. You do have to set up your domicile in SD and you should not do it if you are a resident of another state. We will be fulltimers without a sticks and bricks. We have SD driver's licenses. SD welcomes fulltimers.

traveler of california · 11-24-2009, 09:24 PM

I don't think that CA can tax you once you leave the state and establish another residence. Supreme court ruling if I recall.

Nick

Hidesert · 11-25-2009, 11:06 AM

Nick you are correct, Calif can not tax me once we have left this state. That was changed several years ago. I talked to Barbara from Americas Mailbox in SD yesterday, it's still pretty simple to do once we get out of Calif. South Dakota here we come and I will be more than happy to write SD a check for the taxs on the new MH.

Jim Stewart · 11-25-2009, 12:51 PM

I apologize for the incorrect information. When the DW and I started fulltiming in 98, California did tax retirement income earned in California even if you did not live there. The Federal Government since passed a law that said that States could not collect that tax if you were not a Resident.

At the time, Florida also had an asset tax on investments which has subsequently been repealed. I found out the hard way and had to ask for amnesty and pay back taxes less penalties for the prior three years. The next year, they repealed the tax, had I waited, I would not have had to pay.

traveler of california · 11-26-2009, 04:51 PM

Glad to hear that I was right about that.

I'm still working on the wife to get her to change residence but she is very resistant to "leaving" dear ol' CA. We still own a home, not a good sales market, but I still want to make the move to TX and part company with the never quite satiated CA govt. It will only get worse and I'd rather spend my own $.

As Dennis Miller the comedian said, I don't mind helping the needy but I'm tired of helping the clueless and CA is always helping more of them.

Appreciate the info and wish you the best as new citizens of South Dakota.

Nick

heyduke · 12-20-2009, 09:21 AM

Just an FYI from the state of Texas...

http://www.trva.org/legupdates/montanallc.pdf

DonnaB · 12-21-2009, 05:49 AM

I would like to say once again for those of you thinking about an LLC, that this is a good plan for FULLTIMERS, but not a good one for part timers. Once you have divested yourselves of your house and property in the state it can work well for you. However if you still own house and or property in the state and spend much time there, the state will want and could demand you tag there. Texas says no more than 30 days at a time. The LLC works well for those that are truly on the road fulltime.