Community Forums

TMan59 · 08-22-2014, 05:40 PM

We all want nice roads to drive on and someone else to pay for them.

DMTTRANSPORT · 08-22-2014, 05:48 PM

Quote:

Originally Posted by Musikboy

I am trying to research the possibility of forming an LLC in Montana and purchasing and insuring my new motorhome through a Montana LLC. I was unaware of of how this worked until a few days ago, when i spoke with a gentleman who has been doing this for several years. My questions around this are:

Is it legal? (I live in MA)
What happens if I never visit Montana?
Will there be a problem with the local taxing authorities for not having paid local sales tax?
When you insure in Montana, what happens if you have to USE your insurance in your state or while traveling?

I am new to this whole topic and I would love to take advantage of how that works if I don't get in trouble or create a risk for myself and family.

Thanks for your help!

No sales tax in Montana, your good to go!

wnytaxman · 08-22-2014, 06:30 PM

Buying a piece of land in another state does not qualify as a residence and will not satisfy the requirements of the law. A residence must have bathroom and kitchen facilities and a vacant piece of land will not qualify as a residence. Even buying a house in another state does not make you a resident of that state. Where do you vote? Where is your driver's license from? What state do you register your auto? All of these are some of the questions that get asked. The most important one is where do you spend the majority of your time? If you spend 183 days or more in one state you are a resident of that state.

As a resident of a high tax and very aggressive tax enforcement state, do not for a moment assume that "you're good to go" just by forming an LLC in Montana and then registering an RV in Montana. Even your former senator, John Kerry, got caught trying to avoid taxes on his yacht and he got caught. If John Kerry couldn't get away with a tax dodge, do you really think the average citizen can?

Find out the residency laws in Massachusetts and then see if you can comply with the requirements of those laws. If you can comply and can document that compliance then go for it. If not, then pay your sales tax and enjoy your new toy and know that you can sleep at night.

Old Dude 66 · 08-22-2014, 06:47 PM

Go read this article. I say it isn't worth the risk. Besides, if I owe the money, I feel I should pay my share.

What About Using A Montana LLC To Avoid Sales Tax?

flynnwalter · 08-22-2014, 07:49 PM

Musikboy
It is a scam, period. If you can afford a motorhome, you can afford to pay your share of the taxes. I would not be able to sleep well from worrying about getting caught and having to pay back taxes and penalties. And yes, some states are going after folks utilizing LLC's to avoid taxes. Nobody likes paying taxes. Let your conscience be your guide.

DMTTRANSPORT · 08-22-2014, 09:06 PM

It's called a Residence Agent, perfectly legal in a lot of states, those of you that feel guilty of not paying your fair share, that's fine do it the right way but also remember to come to a FULL stop at a stop sign....

GoldWing2003 · 08-22-2014, 09:38 PM

I just heard about a guy that did this recently here in PA and got caught as his tow vehicle had PA plates on it but the MH had Montana plates. It ended up costing him 19K in taxes, interest & penalties. Police told him they are looking for this now. Doesn't seem worth it to me.

jimbo2013 · 08-23-2014, 06:30 AM

I think if you get past if you should or shouldn't from an ethical point of view the bigger hurdle is if you are borrowing money isn't it true most banks will not permit it.

Has anyone found banks willing to do it?

If so which ones

wnytaxman · 08-23-2014, 07:13 AM

Whenever this topic comes up it is always interesting the different takes people have on the issue. For those that think that there is a level of unethical or illegal behavior I would like to ask some simple questions. Do you not deduct the interest on your motorhome so that you can pay your "fair share"? How about your mortgage interest on your house? Church donations?

My point is that IF you can comply with the laws of your state and you an document that compliance then you are legal in what you are doing. For example, if my state says that any vehicle that is in my state 30 consecutive days or more must be licensed in my state and the taxes must be paid and I remove that vehicle once every 28 days to another state, then I am legal and have violated no laws. I must be able to PROVE that compliance.

Now the moral or ethical question comes in when someone does this type of minimal compliance, is it ethical? It is legal, but is it ethical or moral? That is a question that anyone who uses the Montana LLC has to answer for themselves.

Musikboy · 08-23-2014, 10:35 AM

I am more like wnytaxman in that I want to pay just enough to be completely legal. No ethics involved. I don't under report my income because I do t want to be hassled by authorities.

Like Apple paying 8% tax in Ireland is completely legal yet law makers are saying pretty please pay higher rates. Why should they? Apple has a fiduciary responsibility to its share holders. They should pay the least amount possible allowed by law.

We all know that eventually the law will change so apple and all off shore subs must report in U.S. jurisdiction even though they aren't.

Same with Montana plates on RVs. Before it was either legal or simply ignored. Now states are finding ways to take away as much as they can and you and I will have to pay what they say we have to pay "or else" and they have way more lawyers on their side than I do. So I pay and enjoy my life. Still better that Russia or Europe when taxes are higher and laws more restrictive.

Everyone will choose their tolerance for risk. Mine is pretty low, too busy enjoying life and anyway I ask myself "how do I want to spend my time?"

rjsupersonic · 08-23-2014, 01:05 PM

The main consideration regarding an LLC for motor home registration is to determine if your home state has an issue with it. I have had an LLC for several years with no problems. We fulltime and use South Dakota for a home address. The LLC is out of Montana. South Dakota has no issue with LLC's for this purpose. Now if you live in Washington State or many other states...don't do it. I know Washington state will pursue residents using Montana LLC's.

wa8yxm · 08-23-2014, 01:34 PM

Quote:

Originally Posted by wnytaxman

I will have to disagree that the Montana LLC is not legal. If you abide by all the laws of your state of domicile and you can document your compliance with those laws then the Montana LLC is perfectly legal.

I fully agree with you that there is nothing inhearently illegal about a Montana LLC.. HOWEVER if your state, as many (most) states do, requires that your vehicles be registered in your state of residence..... THEN you are NOT in compliance with those laws if you own a Montana LLC. And this is why they nailed your client.

He could not prove he was in compliance, because he was NOT in compliance.

Which is why I said it's not legal.

mel s · 08-23-2014, 02:21 PM

Quote:

Originally Posted by Old Dude 66

if I owe the money, I feel I should pay my share.

Old Dude 66
I share that opinion!

Far to many "flag waving", "constitution quoting", "self proclaimed patriots" drive a RV registered to a Montana LLC.
A true patriot pays his share, (which, BTW, is a little more than it would be if it weren't for tax cheats).
Mel
'96 Safari

wnytaxman · 08-23-2014, 02:41 PM

Quote:

Originally Posted by mel s

Old Dude 66
I share that opinion!

Far to many "flag waving", "constitution quoting", "self proclaimed patriots" drive a RV registered to a Montana LLC.
A true patriot pays his share, (which, BTW, is a little more than it would be if it weren't for tax cheats).
Mel
'96 Safari

I understand your logic and don't disagree with you. However, do you not deduct mortgage interest on your tax return so that you will pay your fair share? Do you pick up all of your on line purchases on your state returns so that you pay your fair share of sales tax? Do you overstate your non-cash contributions?

Fair share is determined by what the law allows. Whether or not you agree with that law is irrelevant. We deal with all types of taxes, some of which make sense and a lot of them don't. The problem with fair share is that it is someone else who determines what that fair share is. What may be my fair share may not be yours. Therefore we rely on the laws. If you comply with the law and can document that compliance then you are legal. As the full-timer from SD stated, he is in compliance with the law so there is no issue. There is nothing in any tax code that requires someone to overpay their taxes. You pay what you must and deduct what is legal.