Montana LLC

[Mark-]

Originally Posted by geordi

Then they are legally owned by a corporation, and you are not the owner. The corporation is.

LLC = Limited Liability Company

[RunningHard]

Google is your friend....🕶

[wnytaxman]

Many seem to feel that using a Montana LLC to avoid sales tax is a simple matter of paying a few dollars and voila, instant sales tax savings. It isn't nearly that simple and assuming so can be a very expensive proposition.

Whenever this topic comes up there is a ton of misinformation and very little real information. First off, be wary of the "advice" of the Montana law firms regarding the legality of using the Montana LLC. One of the more prominent firms in Montana told me there would be no issue being a NY resident and purchasing the rig in the name of the Montana LLC. That advice was flat out wrong. NY looks through the LLC to the beneficial ownership of the LLC and disregards the LLC for ownership. I own the LLC and the LLC owns the rig so therefore I own the rig. NY is not the only state who takes this tact.

Find out the laws of your state for residency, licensing, and sales tax. See if you can comply with those laws and can you document that compliance. If you can answer yes then go for it. If you can't answer yes then be aware that you may be entering a very costly transaction if you get caught.

[XBoater]

Tax avoidance is not illegal, but illegal tax avoidance is tax evasion. Unfortunately for many a Montana LLC is not a legal alternative, but this only comes to fruition if discovered. (Chances are you wont get challenged, but the risk is always present)

I do find it a bit comical to read those stating they chose to pay extra tax. No one chooses to pay more tax voluntarily. I have never met a person owed a tax refund, that sent the IRS a greeting card saying, Thanks but No Thanks, Uncle Sam you keep it.

Talked to MT attorneys, but none would provide legal advice for out of state issues. Have to talk to in-state tax attorney.

Registration is the easy part, if legally registered in Montana, generally legal to drive in all states.

For most the biggest legal issue is where the unit will be garaged. In my state, for residents if the vehicle is not in the state for the first 180 days of ownership and afterwards not is in the state for more than 30 days a year, there is no tax owed or in-state registration. Then you have to figure out where you can park it after 30 days is up and what are the tax implications of that state.

After the garaging issue, then you have the insurance problem. Registered in one state, garaged in another, will leave many saying no.

As many have stated, do your homework.

[docj]

Originally Posted by XBoater

I do find it a bit comical to read those stating they chose to pay extra tax. No one chooses to pay more tax voluntarily. I have never met a person owed a tax refund, that sent the IRS a greeting card saying, Thanks but No Thanks, Uncle Sam you keep it.

The famous jurist Learned Hand once wrote:

Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.

Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

Montana LLC's can work for some full-timers and be totally legal. If OTOH you live in a State and keep your MT-registered MH garaged near your home then an LLC may be judged to be for tax evasion rather than tax avoidance. Each person's circumstances are different and need to be carefully assessed.

However, there have been multiple misstatements in this thread as there are every time this subject arises. A MH owned by an LLC is not considered a commercial vehicle. Ownership and use are totally separate considerations. An LLC is an entity to hold property; it may or may not have any business interests. As for insurance, there are companies that are willing to insure MH's owned by LLC's at competitive rates.

Joel (AKA docj)

[XBoater]

Well stated...

[NXR]

Originally Posted by TexasPSDX

Wouldn't registering your coach as owned by LLC make the coach a commercial vehicle and subject to commercial licensing and insurance?

My insurance policy indeed does have a clause that says if the motorhome is titled to an LLC then it is considered to be for business purposes and will not be insured.

Ray

[Ivylog]

Originally Posted by wnytaxman

Many seem to feel that using a Montana LLC to avoid sales tax is a simple matter of paying a few dollars and voila, instant sales tax savings. It isn't nearly that simple and assuming so can be a very expensive proposition.

Whenever this topic comes up there is a ton of misinformation and very little real information. First off, be wary of the "advice" of the Montana law firms regarding the legality of using the Montana LLC. One of the more prominent firms in Montana told me there would be no issue being a NY resident and purchasing the rig in the name of the Montana LLC. That advice was flat out wrong. NY looks through the LLC to the beneficial ownership of the LLC and disregards the LLC for ownership. I own the LLC and the LLC owns the rig so therefore I own the rig. NY is not the only state who takes this tact.

Find out the laws of your state for residency, licensing, and sales tax. See if you can comply with those laws and can you document that compliance. If you can answer yes then go for it. If you can't answer yes then be aware that you may be entering a very costly transaction if you get caught.

Very good free advice ^^^^. Yes, if you live in your MH most of the year or are FT, a MT LLC is a good option. Even as half timers and with the MH store inside at home where the tag cannot be seen, there was NO WAY to get around the GA residency rules. Fortunately GA no longer charges an annual ad valorem tax but the one time 6.7% tax ($11,000) was what a MT LLC would cost over the 10+ years I hope to use this MH...no long term savings. Writing that $11K check still hurt but for many years I’d worked the system saving that much on owning our Dynasty.

I believe in legally paying as little tax as possible. When GA didn’t charge sales tax on used vehicles between individuals (Not that I would buy new) but did charge ad valorem tax on the 2nd tag registration AND our birthdays were close together...for the $26 title change fee, the DW would own the MH one year and I would own the next instead of the $1200+/year if owned in the same name each year... legally paying $260 instead of $12,000 over 10 years.

[docj]

Originally Posted by Ivylog

Fortunately GA no longer charges an annual ad valorem tax but the one time 6.7% tax ($11,000) was what a MT LLC would cost over the 10+ years I hope to use this MH...no long term savings. .

I have no idea where you got your numbers from with respect to the estimated cost of a MT LLC but they're much, much larger than our actual costs over the past 10 years.

[Crasher]

My son looked into a MT LLC when he purchased his Newell. The tax savings would have been over $80,000. However, after checking WI state law and consulting his attorney, he paid the tax. He was advised that if he was questioned about it, his WI drivers license would determine his legal residency. Unpaid sales tax, penalties and fines would then be due.

[Ivylog]

Originally Posted by docj

I have no idea where you got your numbers from with respect to the estimated cost of a MT LLC but they're much, much larger than our actual costs over the past 10 years.

There is a new annual $825 MT LUXURY tax in addition what you pay for the LLC.
Even GA is cracking down on MT LLCs: https://www.ajc.com/news/luxury-car-...DX8EuvYzgNo6J/

[XBoater]

Actually its $800 on RV's that had an MSRP over $300,000

[docj]

Originally Posted by Ivylog

There is a new annual $825 MT LUXURY tax in addition what you pay for the LLC.
Even GA is cracking down on MT LLCs: https://www.ajc.com/news/luxury-car-...DX8EuvYzgNo6J/

We don't qualify for the luxury tax, nor do we pay an annual registration fee because of the age of the MH.

As for the article you linked to, it details owners of expensive vehicles who keep those vehicles at their residences in GA. Nowhere did I ever claim that wasn't tax evasion plain and simple. MT LLCs are easiest to defend when the vehicle in question doesn't spend much, if any, time in the state where the owner is resident.

[theroc]

Originally Posted by Trapperbob11

When we retired we bought an rv and put it into a LLC from day one. No longer owed a home or property in any state. In the first year on the road full timing we established residency in TX. Drove for years with Texas plates on car and a Montana on the RV with no problems. I do not spend any time in CA. Have not been there in 30 plus years and have no plans to ever spend a dime going there so had no concerns about how they felt. Costs for LLC has changed and may not work for you as you plan. Do a lot of research to see what the true annual costs are. Take care.

Enjoy the journey

The only LEOs that would care or be suspicious if one had a license plate from a different state on the toad than that on the motorhome would be the driver's state of domicile. An LEO would not care how the vehicles are legally licensed unless it is their own state. So a California LEO would only be concerned about a California resident and how they have their vehicles registered --they would not be concerned about a Montana LLC being "the owner" of one or both the vehicles (motorhome and/or the toad) of a resident of another state.

We used a Montana LLC for over a decade. The first few years, we also had the toad registered in our state of domicile (Nevada) because we still owned property there but were on the road full-time nonetheless. We eventually put both vehicles under the LLC.

We had concerns when first considering using a Montana LLC but after consulting with both our own attorney and attorneys in Montana that specialize in this, we were comfortable using a Montana LLC.

The attorneys we consulted with all gave the same advice if being confronted by a NV LEO asking why the mothorhome was not registered in NV and that was: "I don't own the vehicle, officer. The company listed on the registration owns the motorhome and has given us permission to use it." On the side of the road, that usually will satisfy an LEO unless they want to pursue it further and the attorneys' advice is that as long as you can show that the motorhome was not inside the state of Nevada for the legally specified number of days required to trigger vehicle registration, there shouldn't be any laws being broken. We were rarely back in Nevada after the first couple of years after going full-time so it was not ever an issue. Again, LEOs in other states "probably" would not care one way or the other as in all likelihood they are not going to report such a suspicion to your "home" state and even if they did, you should have documentation to prove you are not breaking any vehicle registration laws of the state of your domicile.




But to answer the OP's question, although we never used "All Day $49 Montana Registered Agent," we would have no hesitation using them as they are reputable. I usually don't advise those who are just starting out with a Montana LLC using them as they don't offer a lot of "hand holding" and you generally have to know what you're doing and the ins-and-outs of the procedure. They will help a bit but will not offer any legal advice.

For those unsure and need the advice and help with the procedure when initially setting up a Montana LLC, I usually will urge them to talk to one of the commercial "registered agents" (you are required to use a Montana registered agent ...you can act as your own registered agent but you have to have a street address in the state and be available during business hours) that are associated with a law firm. Bennett Law in Missoula, as has already been mentioned, is good as they are the most prominent and have been assisting RVers for a vast number of years.

However, if you've done your research and feel comfortable not needing that "hand-holding," a commercial registered agent such as "All Day $49 Montana Registered Agent" is an excellent alternative.

However, I know many who have started with Bennett and then later, after becoming comfortable in the process (forms need to be filed each year, etc.), have moved to All Day $49 Montana Registered Agent or other less expensive registered agents.

But as others have already said, be very careful and research and get legal advice if you intend to keep your California residency. Montana LLCs work well for some full-timers but are definitely not for the part-time RVer who stays in California (or their state of residency) the majority of the time.

And yes, with Montana recently enacting that luxury tax, it may not be as worthwhile to consider as it once was. Again, as others have said, do your homework.