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10-02-2023, 12:09 AM
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#1
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Junior Member
Join Date: Sep 2023
Posts: 3
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Has anyone ever explained a Montana LLC to a police officer?
I’m guessing a few here have employed the Montana LLC registration tactic. Has anyone ever explained this to a police officer before? I imagine they would question why the insurance is local, but your plates are out of state? Can anyone provide information on how to properly explain this?
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10-02-2023, 04:01 AM
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#2
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Senior Member
Join Date: Jul 2003
Posts: 4,457
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We've never had the situation in the 12+ years we used a Montana LLC to have any reason to have to show our registration to a LEO.
However, as the Montana lawyers always explain, no police officer has any reason to even care UNLESS it's inside the state of your domicile. No other state LEO really should care about the registration issue as it's legally registered and no laws are being broken in that particular state as it pertains to vehicle registration.
If any law pertaining to using a Montana LLC is being violated, it is in the state of your residency only. Remember, that is the only reason some will say that using a Montana LLC is "illegal" as it has to do with not abiding by the registration LAWS of YOUR state or the state in which you consider your domicile, i.e. the state that your driver's license reflects. That is really the only state that should care if the vehicle is registered correctly or not. And then, even the LEOs of your state may not even care or be asked to monitor registration oddities. If you are following and obeying the registration laws of YOUR state, then you are obviously not breaking any laws. We made sure we were not breaking the registration laws of our state of domicile.
So it's obvious that you should not be in your home state for any extended period of time or you will most likely be violating your state's registration laws. That's why using a Montana LLC is only completely legal for those who are retired and/or traveling the vast majority of the time and/or full-timers as you should not be in your state of residency very long or you most likely will be breaking the law, so to speak.
But in any other state, it should not be an issue at all. You are essentially driving a company vehicle and an LEO of a state that is not your home state shouldn't care about the situation as long as the registration is valid and especially if your driver's license is valid. They shouldn't care who or where the insurance is originating as long as you show proof of insurance.
I would, however, encourage you to either use a Montana insurance agent or an agent that is familiar with insuring a Montana registered vehicle so it is correctly insured as it pertains to Montana's regulations as the vehicle is licensed in that state.
We used Garden City Insurance agency in Missoula initially but they are no longer in business. They were recommended to us by Bennett Law in Missoula when we first established the LLC originally many years ago. We then used Miller in Lake Oswego Oregon as at that time, they were familiar with how to properly insure a vehicle held in a Montana LLC. We later switched to Destination Services in Missoula for the rest of the way for our insurance agent as they handle a lot of motorhomes held in a Montana LLC. They were also able to insure other things for us in other states too such as our properties and our umbrella liability coverage.
Destination Services
disclaimer: we have had many heated and contentious discussions on Montana LLCs during the 20 years I've been participating on this forum. I have been called names, been called a criminal, received hateful emails and PMs because many here on the forum do not completely understand using a Montana LLC. You will get all kinds of conflicting information on this forum.
I'm just giving my own experience and how I understand the law. When going full-time, we consulted both Montana lawyers and lawyers in our state of domicile to make sure we were completely legal in how we wanted to use a Montana LLC.
Many on the forum who will post after this will say much different things than what I just posted. In the end, you'll have to decide how you want to interpret the law. I'm not saying that I'm completely correct or not but just explaining how I interpreted the law and what we did when we used a Montana LLC.
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10-02-2023, 02:16 PM
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#3
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Moderator Emeritus
Join Date: Jan 2000
Location: West Palm Beach, FL. USA
Posts: 28,366
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I can't imagine why the need for that explanation to an officer would ever arise. Or that it would be helpful if it did. As theroc explains, it's only a potential tax issue in your home state, and if you get a citation of some sort, it's a tax avoidance vs tax fraud issue. Not a traffic or vehicle offense. No LEO is going to be involved unless sent to physically deliver a summons.
__________________
Gary Brinck
Former owner of 2004 American Tradition and several other RVs
Home is now West Palm Beach, FL
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10-02-2023, 02:21 PM
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#4
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Senior Member
Join Date: Sep 2020
Posts: 1,732
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Is this not an issue with your insurance? You sure this wont cause issues if there is a claim?
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10-02-2023, 02:56 PM
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#5
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Senior Member
Join Date: Oct 2019
Posts: 576
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Quote:
Originally Posted by Gary RVRoamer
I can't imagine why the need for that explanation to an officer would ever arise. Or that it would be helpful if it did. As theroc explains, it's only a potential tax issue in your home state, and if you get a citation of some sort, it's a tax avoidance vs tax fraud issue. Not a traffic or vehicle offense. No LEO is going to be involved unless sent to physically deliver a summons.
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That's not totally true, at least in CA... surprise, surprise..
Once you establish residency in CA, as defined by the CA vehicle code, it could be an issue with an informed LEO.
If you are a resident of CA, (resident described in California Vehicle Code section 516) you have 20 days to register your vehicle(s) in CA.
If you hand a CA LEO a CA license, and a registration for a car in your name that is registered outside CA, if he is knowledgeable and/or cares, will he will ask questions.
Again, if he cares, the driver/owner could get a ticket for 4000(a) Unregistered Vehicle for failing to register the vehicle in CA within 20 days.
CA even requires non residents to register a vehicle in CA if the vehicle is based in CA or used in CA, per 4000.4 CVC "A vehicle must be registered in California if it is based in California or is primarily used on California highways (located or operated in this state for a greater amount of time than any other individual state during the registration period, even if registered to a nonresident owner."
So even a vehicle registered out of state to an out of state owner, being driven in CA by a person with a CA license, could raise questions in the mind of an informed LEO.
There are exemptions for active duty military people.
The violation if written is an equipment violation, but a ticket requiring correction and/or an appearance in court...
__________________
2014 Newmar Canyon Star 3920
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10-02-2023, 03:22 PM
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#6
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Senior Member
Winnebago Owners Club Workhorse Chassis Owner
Join Date: Nov 2018
Posts: 2,880
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My insurance policy only lists the make, model and VIN of my RV. If a LEO were to run the plate and it came back to this VIN, and to me as registered owner, I'm not sure there's much there to have to explain.
Mark B.
Albuquerque, NM
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10-02-2023, 04:08 PM
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#7
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Senior Member
Join Date: Jul 2003
Posts: 4,457
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hattitude: but that's my point. One is responsible for following the vehicle registration laws in the state in which they call their domicile. The state in which you call your domicile wants their money (sales taxes if applicable and vehicle registration fees). So yes, all that you've said is most likely correct and on point. Yes, a California LEO will be concerned and give you a citation, etc. if you vehicle isn't registered properly.
However, if you are traveling through another state, will the LEO issue you citation as a California resident, for a vehicle that's not registered properly? Most likely not and that LEO probably wouldn't care. If you're pulled over in, say, Missouri, will that officer issue you a citation or ticket for not having your vehicle registered properly in California? I'm thinking not but I may be wrong but logically they probably wouldn't care.
So that's my point with using a Montana LLC. No LEO will really care unless you are a resident of THEIR state.
If i was pulled over in my Montana registered motorhome by a California LEO and I am a resident of Nevada (that was our situation), I think that California officer could care less if I have a Montana plates and a Nevada driver's license. I'm showing him/her my valid Nevada drivers license, my Montana registration document, and proof of insurance. That's all that California LEO would care about. They are not going to be suspicious --or shouldn't be suspicious-- of that situation at all as no laws are being broken in California pertaining to the registrations and insurance issues.
However, if I was pulled over in Nevada, a Nevada LEO may be suspicious of why my motorhome is registered in Montana and I'm a Nevada resident. The reason is that if I'm a Nevada resident, I should be paying sales or use taxes when purchasing the motorhome and also should be paying the very high registration fees in Nevada each year when I renew my registration.
My point is, is that we were never INSIDE Nevada long enough with the motorhome to trigger our having to legally register the motorhome in Nevada. Therefore, we were NOT breaking any laws.
When we had a stick house in Nevada and were living in it the majority of the time and only took our motorhome out every other weekend for a trip, then yes, we'd feel obligated to register the motorhome in Nevada and pay the sales taxes and pay the high registration fees each year. We just wouldn't "feel obligated" but would be breaking the law by not doing so.
We did know some people who did that and actually got caught as their neighbors turned them in to the state. The neighbors saw a motorhome parked on the side of their house regularly and it had Montana plates. One of the neighbors had a NHP officer friend check into it and an investigation was done and they ended up having to pay fines, back taxes and fees, and were required to register the motorhome in Nevada.
The Montana lawyers told us that they advise people to be careful when having Montana plates on their motorhome but have the toad with the home state plates as they tell people that it might call attention to the LEOs in THAT state but JUST that state as an LEO of another state probably wouldn't care at all if the motorhome has Montana plates and the toad has another state's plates.
So again, what we've been told by the Montana lawyers is that the only LEO who will really care how or if your motorhome is registered correctly is an LEO that is in your HOME state (or the state in which you hold your driver's license).
If you do use a Montana LLC and you want to do things completely legal is to make sure you're following the registration laws of your home state. Logically, that would only work if you do not have the vehicle inside your home state for any extended period of time that would trigger registering the vehicle there. Consequently, it only works for those who are retired or are traveling very frequently.
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10-02-2023, 04:14 PM
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#8
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Senior Member
Join Date: Jul 2003
Posts: 4,457
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Insurance is no issue at all.
If you show proof of insurance on a Montana registered vehicle and it's insured correctly for a Montana registered vehicle and you have proper liability coverage, an LEO of any state should accept it as that.
Let's say you were working for a company and were using one of their vehicles when your boss asks you to take a trip and pick up some supplies in another state. You get pulled over and the LEO asks for your drivers license, registration, and proof of insurance. You should be able to provide those documents whether you're driving a company vehicle or a vehicle that's registered in your name.
If a LEO wants to run the Montana plates on my motorhome, they will see it's registered to a company that I own. I'm showing proof of insurance for that vehicle. Why should that be a problem?
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10-02-2023, 04:30 PM
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#9
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Senior Member
Join Date: Sep 2021
Posts: 1,963
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Why is that a problem?
Because it's a common tax evasion scheme. Maybe you get away with it, maybe you don't. States have caught on to many of these, boats for example another big ticket item. Us crafty captains used to use USCG registered vessel status to avoid paying the man. Then Washington, Oregon and other states passed laws saying if your boat is moored in our waters you are paying state sales tax, period. People turn each other in all the time. The marine cops are empowered to write you a summons to appear if you can't produce proof you paid. If you say "my RV lives in Montana" but I do not...well good luck. Might work until it does not.
__________________
2004 Safari Cheetah PDQ 330 Cat
USAF SERE
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10-02-2023, 04:38 PM
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#10
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Senior Member
Join Date: Jul 2003
Posts: 4,457
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Quote:
Originally Posted by Iceclimber
Why is that a problem?
Because it's a common tax evasion scheme. Maybe you get away with it, maybe you don't. States have caught on to many of these, boats for example another big ticket item. Us crafty captains used to use USCG registered vessel status to avoid paying the man. Then Washington, Oregon and other states passed laws saying if your boat is moored in our waters you are paying state sales tax, period. People turn each other in all the time. The marine cops are empowered to write you a summons to appear if you can't produce proof you paid. If you say "my RV lives in Montana" but I do not...well good luck. Might work until it does not.
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^ this is the kind of comment I referred to in my first post in this thread.
And remember as has been discussed in many threads here on this forum pertaining to this topic through the years, legally defined, tax evasion is a crime, correct. Tax avoidance IS not a crime.
Tax Evasion Vs. Tax Avoidance: What’s The Difference?
eta: again, Iceclimber, read what I've written in this thread. I'm not a criminal
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10-02-2023, 04:49 PM
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#11
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Senior Member
Join Date: Jul 2003
Posts: 4,457
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And as I did say in my "disclaimer" in the first post in this thread, this topic becomes very contentious in just about every thread on the subject in the past 20+ years that I've posted on this forum pertaining to this.
Using a Montana LLC is NOT for everybody. It works LEGALLY for very few.
Some use it illegally and never get caught. Some, as in my example, do get caught and have to pay the price.
And for the very few who use it LEGALLY, it is a good way to "avoid" high sales taxes and high registration fees if you are a full-timer.
OP, if you want to discuss it further, PM me. As I mentioned, I get called too many names here publicly on the forum so I'm going to attempt to end my comments here.
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10-02-2023, 05:17 PM
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#12
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Senior Member
Join Date: Sep 2021
Posts: 1,963
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Quote:
Originally Posted by theroc
And as I did say in my "disclaimer" in the first post in this thread, this topic becomes very contentious in just about every thread on the subject in the past 20+ years that I've posted on this forum pertaining to this.
Using a Montana LLC is NOT for everybody. It works LEGALLY for very few.
Some use it illegally and never get caught. Some, as in my example, do get caught and have to pay the price.
And for the very few who use it LEGALLY, it is a good way to "avoid" high sales taxes and high registration fees if you are a full-timer.
OP, if you want to discuss it further, PM me. As I mentioned, I get called too many names here publicly on the forum so I'm going to attempt to end my comments here.
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Well, you just sent me a PM and called me a name. That is not exactly an adult thing to do.
[Moderator Edit]
I am not calling anyone a criminal or any other name for that matter. I am simply stating the "montana llc" is a common tax evasion scheme, because why else would anyone do it? Have a nice day, I'll block you since you can't be polite.
__________________
2004 Safari Cheetah PDQ 330 Cat
USAF SERE
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10-02-2023, 05:44 PM
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#13
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Senior Member
Join Date: Jul 2003
Posts: 4,457
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Well, folks, he's blocking me ...that's not logical as he's not reading what I've written to begin with, LOL.
Yes, if he's implying I'm a criminal, it's difficult for me to be polite. I first asked him to read what I wrote and he continued to imply I'm a criminal.
As I've said, this topic gets contentious. I've been called much worse in PMs and emails after explaining how we used our Montana LLC when posting here on the forum.
He's right, it may be a "common tax evasion scheme" but for a very few, it also can be an effective and legal tax "avoidance" method where no laws are being broken.
It's not for everybody. Obviously. But for certain full-timers, it can fit wonderfully.
The primary reason for using one is for the sales tax "avoidance" and if you buy several motorhomes and toads as we did during our full-time years, we did save some money. Secondarily, if registration fees are high for motorhomes in your state of domicile as it was for us in Nevada, you save even more.
Registration fees in Montana are not he lowest but were far lower than Nevada.
So again, please do your homework and even get legal advice in your home state if you wish before deciding to use one. If you live in a stick house and are there most of the time, do NOT use a Montana LLC to register your motorhome. If you're away from your home state the majority of the time or are there for very short periods of time, you might look into using one to see if it would work.
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10-02-2023, 06:25 PM
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#14
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Senior Member
Join Date: Jul 2018
Posts: 5,195
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I mention this every time the "Montana LLC" comes up:
If you live in a state (domiciled) other than Montana, chances are good that state will have a very jaundiced view of this scheme.
Look at the California vehicle code, cited above: if you have the vehicle in California for more than 20 days, regardless of domicile, you have to register it in CA. Most other states give you 30-60 days, but have their limits. Exceptions for full time students and military members, usually.
There is a 2 day old thread about a South Carolina resident wanting to use an out of state registration to mitigate sales/use/property tax obligations (pick any two) while maintaining an SC domicile. If that RV comes into SC the local taxing authority (usually the county treasurer) may well bring civil or criminal charges to get the owner to pay up after the grace period.
If you are a full time RVer without a sticks and bricks domicile, you're likely in the clear and can use the Montana LLC to full effect. If anything else, I STRONGLY SUGGEST YOU PAY A FEW $HUNDO AND CONSULT WITH AN ATTORNEY AND ACCOUNTANT IN YOUR STATE OF DOMICILE. Once informed of your local laws and regulations you might decide to go all in, or forget about it entirely.
__________________
2005 Four Winds Majestic 23A
“To the world you may be one person; but to one person you may be the world.” - Dr Suess
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