Montana LLC

[Gary.Jones]

Let me give you a concrete example from Louisiana. You can google the court findings if you want. A gentlemen living in Louisiana bought a Prevost coach which he kept parked when not used, in Mississippi. He had it licensed through an LLC in Montana. At some point the State decided to come after him. He readily admitted that the coach was licensed to an LLC in Montana but that he was the primary user.

Now this is important. The State of Louisiana had no statutory law that said he must register his coach in Louisiana, but it was implicit. Apparently this owner had not only enough money to buy the new Prevost, he also had enough money to hire a lawyer and fight it all the way to the State Supreme Court. The Supreme Court found that he had done nothing illegal and stated explicitly that tax avoidance was not illegal whereas tax evasion was illegal, and if the state wanted to avoid this situation, it needed to enact laws which specifically prevented it, which they had not done

Gary

[LasVegasRon]

I've had my LLC going on 12 years. Never a problem ! I paid $320 for my 17 Cornerstone and no tax. My LLC costs $20 a year to renew as my friend is a retired attorney in Montana.
Good Sam asked where I base it and pay for insurance for that state rating, like $2300 a year.
You can always re-register your coach in you home state and still save the tax after your first year.
It's not tax evasion it's being tax smart.
Not sure if lenders are too excited about lending to an LLC, but you could always get a personal loan.
I just registered a travel trailer for $177 for lifetime plates and had a friend do his Harley for $29 for lifetime plates.
If other states came to their senses and had reasonable fees, Montana wouldn't exist.
Did not hear about the $850 a year fee, but still cheaper then $4000 tags.
Good Luck!

[Mr_D]

Originally Posted by 02trader

Since an LLC is a Limited Liability Corporation and if a MH is registered to an LLC, at what point, if ever, would the driver of this "corporate" owned vehicle be legally expected to stop at state Weight Stations and/or Ports of Entry? If a MH is owned by an LLC, would it be considered a "commercial vehicle" and thus subject to some additional rules and regs which a "personal" vehicle is not subject to?
Just a question...

IRS rules (as does WA state) define an LLC as a "Limited Liability COMPANY" even though it's incorporated.

[wnytaxman]

Originally Posted by Mr_D

IRS rules (as does WA state) define an LLC as a "Limited Liability COMPANY" even though it's incorporated.

An LLC is NOT incorporated. An LLC is a Limited Liability Company, not a corporation. The distinction may seem like one of pure semantics, but it is a very, very important distinction.

The purpose behind an LLC is asset protection. Any asset can be placed into an LLC without any tax ramifications. We have clients who have placed their personal residences into LLC's. We use LLC's all the time to limit potential liabilities from lawsuits. LLC's are not businesses by definition.

[wnytaxman]

Originally Posted by LasVegasRon

I've had my LLC going on 12 years. Never a problem ! I paid $320 for my 17 Cornerstone and no tax. My LLC costs $20 a year to renew as my friend is a retired attorney in Montana.
Good Sam asked where I base it and pay for insurance for that state rating, like $2300 a year.
You can always re-register your coach in you home state and still save the tax after your first year.
It's not tax evasion it's being tax smart.
Not sure if lenders are too excited about lending to an LLC, but you could always get a personal loan.
I just registered a travel trailer for $177 for lifetime plates and had a friend do his Harley for $29 for lifetime plates.
If other states came to their senses and had reasonable fees, Montana wouldn't exist.
Did not hear about the $850 a year fee, but still cheaper then $4000 tags.
Good Luck!

Ron, a lot depends on your home state and how vigorously they pursue their sales tax revenue. If you comply with all the requirements of your home state then you have no issue. If you do not comply with the requirements of your home state for residency and taxes then it really is tax evasion. The fact that someone has gone years without an issue is no indication that what they are doing is legal. I'll use Bernie Madoff as an example. I think you understand my point.

For years Delaware was a good venue for yacht registration. Then one bright shinning Monday, when the boats were docked, the sales tax folks went down the line and made some notes. Lots of folks got big bills from our friends at taxation and finance. Many states are being more attentive to how one may be skirting their sales and use tax laws and big ticket items like RV's are a prime target.

As to the assertion that you can buy it in the name of a Montana LLC and then a year later register it in your home state tax free.....well, that doesn't work in all states. Most states will ask you how much sales tax you paid when you purchased the rig and ask you to prove what you paid. Then it becomes gotcha time.

[2nsman]

To the legal types out there in thread-land I pose this question:

What would be if any the ramifications of using a Montana LLC for initial purchase. Then 18 - 30 months later, the LLC sells the coach either to you as an individual or a new homebased state LLC for the depreciated value of the coach.
Example: New Coach List $ 550K, purchase price by MT. LLC for $ 375K, no sales tax paid, 28 months from purchase date, coach is sold by Montana LLC to a Florida based LLC for $ 205,000. FL sales tax of 6%, or $ 12,300 is then paid. Sales tax saved is $ 10,200. Less cost of setting up LLC's. Obviously a bad deal if you are trading in a coach on original purchase, but if goal is to get the coach eventually into homestate, tax savings would increase with an extended waiting period and a declining wholesale Blue Book price. Difficult for state to challenge whatever price is paid, if it is reasonable, and probably not worth their effort to challenge.

This becomes still a significant savings, but a bite of the apple, not the whole apple.
2nsman...out

[Mr_D]

Originally Posted by wnytaxman

An LLC is NOT incorporated. An LLC is a Limited Liability Company, not a corporation. The distinction may seem like one of pure semantics, but it is a very, very important distinction.

The purpose behind an LLC is asset protection. Any asset can be placed into an LLC without any tax ramifications. We have clients who have placed their personal residences into LLC's. We use LLC's all the time to limit potential liabilities from lawsuits. LLC's are not businesses by definition.

I thought an LLC had to file Articles of Incorporation to be legal. Am I mistaken?

Just checked the RCW's for WA State, they now call them "Certificate of Formation" so I guess that aren't "incorporated" anymore.

[wnytaxman]

Originally Posted by Mr_D

I thought an LLC had to file Articles of Incorporation to be legal. Am I mistaken?

Just checked the RCW's for WA State, they now call them "Certificate of Formation" so I guess that aren't "incorporated" anymore.

LLC's are very unique entities. The first one was done in Wyoming in 1977 and was to benefit one company. Now LLC's are used all over the world and have become one of the most common form of entities. They are formed by creating Articles of Organization or something similar depending on which state is their state of origin. Their purpose was to provide a simpler form of legal liability protection than the corporate format and particularly the S corporation which has a bunch of restrictions that would limit their use.

We will look seriously at setting up a NY LLC when our Aspire arrives. It's just one more way of protecting yourself from the injury attorneys that seem to be more common than dirt. The LLC will not provide us any tax benefit but it may make us sleep a bit more soundly at night!