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W4RLR · 04-28-2011, 01:53 AM

I was stationed in Germany and bought a Volvo under the military sales program. I registered the car in both Germany and The Netherlands. I shipped the car home to Florida when it was four years old. Florida assessed use tax on the full original purchase price. They WILL get their money.

wnytaxman · 04-28-2011, 07:04 AM

Quote:

Originally Posted by rray32539

I was stationed in Germany and bought a Volvo under the military sales program. I registered the car in both Germany and The Netherlands. I shipped the car home to Florida when it was four years old. Florida assessed use tax on the full original purchase price. They WILL get their money.

The same thing happened to me on a pickup truck I bought in Alaska and then ended having to pay NY sales tax on the fair market value of the truck when I moved back to NY.

The Montana LLC can provide you protection from your state's sales tax, but you have to make sure you comply with every single requirement of your state's laws and that you can prove it in a court of law, if necessary. The way the states are chasing money right now you can't be sloppy on your record keeping.

sparkydog · 04-28-2011, 08:33 AM

I'm here to tell you, as a small business owner of 25 yrs, if you purchase products that are not intended for resale from out of state vendors, you are responsible for the tax on those items. It's called a use tax in Illinois. A nice young lady spent the better part of 3 days in our office, auditing 5 yrs worth of our books. We had missed a few items, paid the penalty and the tax, and haven't made that mistake again! Now for the litigation process, Anyone can accuse anybody of anything, right or wrong you have to bear the cost of your defense, whether it be attorneys, accountants, or even your own time spent. It somehow isn't right, but these are the costs of doing business

GaryKD · 04-28-2011, 09:39 AM

Hi wnytaxman,
Thank you for posting your thoughts. I understand and agree with your main point that one must obey the tax laws of the state they are a domicile/resident in. While all states may be going after taxes, each state has its' own laws. One needs to understand these laws and act accordingly.

Based on your posts, NYS is a good state to be from.

Doug Sage · 04-28-2011, 09:44 AM

I agree with wnytaxman. The actual intent of forming a Montana LLC is to avoid paying the sales tax and possibly the high license fee. People have found what they consider a loophole in the laws that allow them to try to get away with this subterfuge. The various state tax departments on the other hand argue that the "intent" is to avoid paying the tax and is therefore against their laws. Most LLC owners do not keep their rigs out of their home state (such as NY). As several posters have commented,, it would be a non-issue if someone bought an RV, licensed it in Montana with an LLC and drove it across the US without ever lingering over 30 days in the state of their residence. The problem comes up when they take it back to the state of their residence and keep it there.

As regards the act of going back and assessing tax on items purchased earlier, I think that most states generally have a short 1 or 2 year window where they try to collect taxes. The hooker is that they will go further back if fraud is found. They will generally not bother with low ticket items such as clothes or other small items purchased in another state but the amount of tax that is charged on an RV is worth the collection effort. Take California for an example. You can buy a motorhome and license it in another state but cannot bring it into California, your state of residence, for one full year. Then you are allowed to bring it into the state but they still have limits on how long it can be in the state before it must be licensed in California. But you avoid the sales tax. I am not a California resident but I believe that is how they work.

This is a good lesson for full-timers. Some people will try to get the best "deal" in licensing, insurance, taxes by having their state of residence be in a state without income tax, their insurance being in a state with low insurance rates, their vehicle license being in a state with low registration fees, etc. You are just opening yourself for attacks by various states who will try to claim that you are a resident of their state and need to pay all your fees and taxes there. Full-timers should pick one state for mail forwarding, insurance, taxes, licensing, etc. and life will be much easier. You can enjoy full-timing and not worry about fighting the government.

RustyJC · 04-28-2011, 09:56 AM

Quote:

Originally Posted by wnytaxman

The way the states are chasing money right now you can't be sloppy on your record keeping.

Offered without comment:

Commonwealth of Massachusetts v Montana LLCs

Rusty

wnytaxman · 04-28-2011, 12:42 PM

Quote:

Originally Posted by RustyJC

Offered without comment:

Commonwealth of Massachusetts v Montana LLCs

Rusty

Thanks Rusty for posting that link. If you read through the link you will see that these units were clearly in MA for quite an extended period of time. In other words the violation was pretty blatant. My client's rig is not visible from the street and is garaged in a totally enclosed building on his property when it is here in NY. As best we can tell, his purchase was picked up solely from the reporting of his purchase by Florida taxation to NY taxation. What he should have done to prove he complied with the law is keep fuel receipts and campground receipts showing that the unit was in fact out of the state. He didn't do that, so now he will pay the price.

Automobilist · 04-28-2011, 12:53 PM

Thanks for posting this. Interesting if nothing else!

One quick question: if the client had a MT LLC buy the coach from a dealer in FL, how would NY ever know about it? Wouldn't the buyer (the LLC) have a MT address? How would the real buyer, the owner of the LLC be revealed?

RustyJC · 04-28-2011, 12:55 PM

Quote:

Originally Posted by wnytaxman

If you read through the link you will see that these units were clearly in MA for quite an extended period of time. In other words the violation was pretty blatant. My client's rig is not visible from the street and is garaged in a totally enclosed building on his property when it is here in NY.

With all respect, I guess I'm missing a point here. Does concealment make keeping the Montana LLC-owned RV in the state of one's domicile OK?

Rusty

Perry White · 04-28-2011, 01:08 PM

You think NY's bad check this AOPA Online: $26,000 tax bill: Maine's state of confusion

Route 66 · 04-28-2011, 01:08 PM

Quote:

Originally Posted by RustyJC

With all respect, I guess I'm missing a point here. Does concealment make keeping the Montana LLC-owned RV in the state of one's domicile OK?

Rusty

It doesn't make it OK or legal. It just reduces the chance of the RV being seen with Montana tags.

RustyJC · 04-28-2011, 01:11 PM

Quote:

Originally Posted by Route 66

It doesn't make it OK or legal. It just reduces the chance of the RV being seen with Montana tags.

Yeah, I got that part. I guess I'm wondering why someone would have to hide a legal activity??

Rusty

Perry White · 04-28-2011, 01:13 PM

I think this is a good way to dry up the RV Industry. Think about it. If I would have to pay $8,000/year per prop taxes on a 6 year old coach, I wouldn't of bought it. That's why I moved. Tired of being taxed to death. Any full timers registered in New York?

wnytaxman · 04-28-2011, 01:18 PM

Quote:

Originally Posted by Automobilist

Thanks for posting this. Interesting if nothing else!

One quick question: if the client had a MT LLC buy the coach from a dealer in FL, how would NY ever know about it? Wouldn't the buyer (the LLC) have a MT address? How would the real buyer, the owner of the LLC be revealed?

The RV dealer was audited by Florida taxation. When the RV was purchased the dealer required a copy of the driver's license of the person driving the RV...my client. Florida then reports to NY what it found and bingo, he gets the notice from NY Taxation and Finance.

Quote:

Originally Posted by RustyJC

Yeah, I got that part. I guess I'm wondering why someone would have to hide a legal activity??

Rusty

Let's say that the state tax folks drive by your house on Monday and see the RV with Montana plates in your yard. Tuesday you drive to the next state to comply with your state's law and then drive home early the next day. Wednesday afternoon the tax people drive by your house and there is the RV sitting in your yard. As far as they are concerned it never left the yard, let alone the state. That's when they send you the notice that says you owe them big time. You complied with the law but the appearance of not complying will get you every time.