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Old 12-25-2016, 01:53 PM   #1
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I just retired and am thinking about hanging up a shingle to do occasional contracting work. I will be setting up an LLC and when researching that process noticed lawyers in Montana advertising that I could incorporate there, and even buy an MH thru that LLC, there is no sales taxes there, and whats really amazing is you can purchase a one time license/registration for about $250, good till you sell it, no yearly renewal. Has anyone here done this? It sounds too good to be true..
Also the LLC yearly cost there is less than 10% of what it costs here in CA, so even if i don't use it to purchase a MH, I will probably do it anyway. A close friend told me the other evening that his neighbor has a MH parked on the side of his house with Wyoming plates, and they are not from there.
Most interesting is the corporation would be a legal residence similar to all the corporations that incorporate in Delaware but have no offices there, they are just for tax advantages. (Trump's campaigning comments come to mind)
I would not need to be a resident. The motorhome would actually be registered to the corp, not to me. I guess I would rent it from the corp for a small fee. What a concept.
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Old 12-25-2016, 02:14 PM   #2
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I'd love to hear the results of this. We intend to retire in 4 years. What kinda shingle you got. We constantly are looking for software developers.
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Old 12-25-2016, 02:23 PM   #3
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What's the old saying, "If it sounds too good to be true it probably is". Hope it works out well for you!

Good luck, happy trails, and God bless!



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Old 12-25-2016, 03:40 PM   #4
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Make sure you're following all the vehicle registration laws and laws pertaining to out-of-state LLCs within your state. Assuming that you are keeping a California residency, you need to be in compliance with THEIR laws.

Since you'll be running a business, it's a bit different situation than those of us who register our motorhomes (and/or other vehicles) in a Montana LLC. I'd suggest consulting a California attorney since you will using the LLC in a bit different manner than those of us who use it as a LEGAL holding company for our vehicles. Myself and others who use a Montana LLC for that purpose (non-business) should be following ALL vehicle registration laws of our state of domicile. If I, or any other person in the same situation are not following OUR OWN state's vehicle registration laws, then it is ILLEGAL to do what we are doing and we could be subject to fines, etc.

I do not file Federal income taxes for my Montana LLC since I do not conduct business. Since you will be conducting business, I assume you will have to file income taxes so be sure to have all your bases covered legally pertaining to state and federal income tax when using an out-of-state LLC.

There are many contentious threads here on the forum on Montana LLCs. Most do not truly understand what is involved and accuse those of us that do use a Montana LLC legally of breaking all kinds of laws and of being scofflaws because they contend we are "cheating." Be sure to research the subject carefully before thinking that you are taking advantage of some secret huge loophole.
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Old 12-25-2016, 04:22 PM   #5
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Just because others do it doesn't mean it's legal for them. There obviously have been other discussions on this. I believe from what I found out is the law firms that do these leave it up to you to have your states laws interpreted by your own lawyer. Read as much as you can on this and decide what you want want to do. It is extremely GRAY. I wanted to be legal and not worry about my toad having a different plate and my DL not matching the RV.


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Old 12-25-2016, 04:30 PM   #6
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BigBillSD,
There are hundreds of threads on here about LLCs and Montana. Almost every single one of them results in serious arguments about laws, morality, legality, tax evasion, Tax "EXEMPTION", "Witch hunts" for those that utilize LLCs in Montana (or other advantage states) but reside in another state. There will be lots of opinions. Since you possibly plan on starting or, utilizing a business in this endeavor, along with the potential purchase/registration/and use of an RV within this "LLC", I might suggest that the very first entity that you contact regarding all or any of this is, the Bennett Law Firm in Montana.

That company specializes in every single detail of what's needed to be known, for the formation of an LLC and, what laws and regulations apply to each and very state. You of course can contact any one or, any company or specialty lawyer that you think may assist you in this matter. But, Bennett is sort of one of the "Senior" names/companies that have specialized in this matter for years and years. They'll give you the most accurate and honest and, UP TO DATE information you'll seek. Good luck.
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Old 12-25-2016, 04:33 PM   #7
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BigBillSD,

There are hundreds of threads on here about LLCs and Montana. Almost every single one of them results in serious arguments about laws, morality, legality, tax evasion, Tax "EXEMPTION", "Witch hunts" for those that utilize LLCs in Montana (or other advantage states) but reside in another state. There will be lots of opinions. Since you possibly plan on starting or, utilizing a business in this endeavor, along with the potential purchase/registration/and use of an RV within this "LLC", I might suggest that the very first entity that you contact regarding all or any of this is, the Bennett Law Firm in Montana.



That company specializes in every single detail of what's needed to be known, for the formation of an LLC and, what laws and regulations apply to each and very state. You of course can contact any one or, any company or specialty lawyer that you think may assist you in this matter. But, Bennett is sort of one of the "Senior" names/companies that have specialized in this matter for years and years. They'll give you the most accurate and honest and, UP TO DATE information you'll seek. Good luck.

Scott

Yes they will but they will not decide for you that it is legal in your state, you have to find that out for yourself. They will help with the LLC only.


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Old 12-25-2016, 05:05 PM   #8
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My take on this LLC thing has to do with personal risk tolerance.

States are catching on and up with violators of their Tax Codes and its hard to explain ownership of a coach registered in MT while your driver's license (as well as the vehicle you pull behind the coach) are registered in your official State of domicile. As well, many State police agencies are now being linked with their State Treasury and Revenue offices wherein a heightening awareness to the practice of regs. of MHs to avoid sales tax is being addressed.

Yes, you can do it and easy enough but I want to sleep at night knowing the my state will not come back on me in the future wanting its share of the sales tax which of course at a later time would include penalties. Admitting it "hurt" to pay the 10.75% sales tax I recently had to pay on my new coach.

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Old 12-25-2016, 05:16 PM   #9
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Yes they will but they will not decide for you that it is legal in your state, you have to find that out for yourself. They will help with the LLC only.


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Exactly. Bennett will set up the LLC for you in Montana and will give you cursory information on your state's laws but it's up to you to make absolutely sure that you are abiding by the laws of California (assuming you keep a California residency). That's why I suggested that you also contact a California lawyer to make sure you have your bases covered.

As tmw188 said, not everyone who uses a Montana LLC is within the law. If you know for certain that you can use an out-of-state LLC and still stay within the laws of your home state, then it's a great way to save money.

Those who accuse me of using a Montana LLC illegally without first understanding how they can be used legally are actually are being un-Trump-like (and I'm not a Trump supporter) as I, like Trump, want to use the system to my advantage as long as I'm not breaking any laws. I'm not saying that Trump has done everything legally in his life but I know I am perfectly legal in my use of a Montana LLC and it's saved us lots of money throughout the years.

So do I feel I'm "cheating" my home state out of taxes? Not really as I'm not breaking any laws by doing what I'm doing. If you can ascertain that you will not be breaking ANY laws of California by doing what you described in your opening post, then by all means you should seriously look into it. BTW, I'm not a California resident. I know I'm operating within the laws of my state of domicile but you'll have to research all the California laws to make sure you can do what you are proposing to do.
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Old 12-26-2016, 05:51 AM   #10
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The Escapees have a fair amount of info on the Montana LLC. Quite a few of them have done it. Most though, change their residency to Montana. I would think is you want to keep CA residency this would be dicey.

The Escapees have a lawyer who specializes is this type of situation. He is an Escapee himself and on the board. Probably best to set up a phone appt. with him.
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Old 12-26-2016, 07:31 AM   #11
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I can't comment on the whole thing but I've had a service business for many years in Michigan. In Michigan you don't pay sales tax on services.

As far as buying your motorhome through the LLC be careful. Unless you're using the motorhome(and can prove it) as the store front or full time office I'm not sure how you could claim it as an expense. Using it for personal reasons as well as the business and paying for it with the business could cause you to loose your protection as an LLC should you get sued putting your motorhome at risk. Might be better to buy the motorhome and then pay yourself rent.

In Michigan I set up an S Corporation and then later another business as an LLC operating as an S corp. Both times I did it without a lawyer.

It cost 25 bucks a year for the LLC.

If this is all new to you I would consult a lawyer.

I am terrified of the IRS which keeps so above board it makes me sick but I ain't messing with them to save a couple bucks.
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Old 12-26-2016, 07:34 AM   #12
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Originally Posted by BigBillSD View Post
I just retired and am thinking about hanging up a shingle to do occasional contracting work. I will be setting up an LLC and when researching that process noticed lawyers in Montana advertising that I could incorporate there, and even buy an MH thru that LLC, there is no sales taxes there, and whats really amazing is you can purchase a one time license/registration for about $250, good till you sell it, no yearly renewal. Has anyone here done this? It sounds too good to be true..
Also the LLC yearly cost there is less than 10% of what it costs here in CA, so even if i don't use it to purchase a MH, I will probably do it anyway. A close friend told me the other evening that his neighbor has a MH parked on the side of his house with Wyoming plates, and they are not from there.
Most interesting is the corporation would be a legal residence similar to all the corporations that incorporate in Delaware but have no offices there, they are just for tax advantages. (Trump's campaigning comments come to mind)
I would not need to be a resident. The motorhome would actually be registered to the corp, not to me. I guess I would rent it from the corp for a small fee. What a concept.
Just a little info here - the LLC from Montana, will need to be separate from your contracting business unless you want to file annual returns for it. - Check it out - if you are just looking for tax advantages look into Nevada also for the business - " Some choose to keep things simple by incorporating or forming an LLC in their home state, while others opt for more "business friendly" states and incorporate in Delaware, Nevada or Wyoming. Choosing the state of incorporation can be tricky business, since each state differs in terms of fees, taxes and other details.Feb 2, 2015 "

Montana has a clear advantage for RV's but don't forget South Dakota - Florida - Texas as options.

Lots to look at here as each state has different and distinct advantages/dis- advantages, so take your time and do the proper research, a good tax lawyer is a must.

JMHO,
BOL,



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Old 12-26-2016, 10:16 AM   #13
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The Escapees have a fair amount of info on the Montana LLC. Quite a few of them have done it. Most though, change their residency to Montana. I would think is you want to keep CA residency this would be dicey.

The Escapees have a lawyer who specializes is this type of situation. He is an Escapee himself and on the board. Probably best to set up a phone appt. with him.
What is the advantage of forming an LLC to register vehicles if you become or are a resident of Montana?

As the OP has stated, having an out-of-state LLC to conduct business is perfectly legal. Yes, it may be "dicey" and you have to research carefully to make sure you are abiding by all laws.

Pertaining to using a Montana LLC exclusively as a holding company for your motorhome (vehicles, yachts, planes, etc.), it is definitely NOT for most people. Actually, very few can do it legally. Again, one has to fit a certain profile in order to be legal in your state of residency. A motorhome owner must not be using it primarily in the state they are claiming domicile nor storing it there for long periods of time.

It's not a matter of "gee, I think I'll form a Montana LLC and buy a motorhome so I can avoid paying sales taxes and high registration fees." If that was the case, lots of folks would be forming a Montana LLC to hold their vehicles. You must be able to abide by certain parameters in order to do it legally. For the majority of motorhome owners, it won't work.
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Old 12-27-2016, 08:40 AM   #14
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Quote. "It's not a matter of "gee, I think I'll form a Montana LLC and buy a motorhome so I can avoid paying sales taxes and high registration fees." If that was the case, lots of folks would be forming a Montana LLC to hold their vehicles. You must be able to abide by certain parameters in order to do it legally. For the majority of motorhome owners, it won't work."

YES.
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