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Lakeman1 · 12-21-2010, 05:04 PM

Downsizer, I don't see what getting stopped or having an accident has to do with it.

wa8yxm · 12-22-2010, 02:04 AM

At least 2 states (CA and CO) and possibly others have gone after the folks who register in Montana using LLC's to avoid taxes... Often the tax penalty is more than the the sticker price of the motor home new.

Several other states, Michigan included, have considered it.

You may wish to re-think this plan.

Lakeman1 · 12-22-2010, 04:42 PM

This is tax avoidance not tax evasion.

wnytaxman · 12-23-2010, 06:33 AM

Quote:

Originally Posted by Pete & Linda

This is tax avoidance not tax evasion.

Sorry, but I have to disagree with you on this one. It is tax evasion. If you remember Tyco and their chairman of the board who bought about $14 million of art work in NY City and had the empty boxes shipped to his office in NH where there is no sales tax and he took the paintings with him. He was convicted of tax evasion. Avoidance is when you legally do not pay taxes by utilizing the law as it is written. Evasion is when you do not utilize the law. If you live in Virginia and have a coach that is registered to a Montana LLC and the coach is housed in Virginia you may very well be guilty of tax evasion. Most states would not go after someone criminally for doing this, but states are very agressive right now on enforcement and they would love to make an example out of an average citizen to let all of us know that big brother is watching us.

Lakeman1 · 12-23-2010, 06:58 AM

wnytaxman, I have said you have to abide by the laws in YOUR state. If I live in XX and register my MH in Montana and do not keep the MH in XX I am able to avoid the taxes in XX. This is tax avoidance not tax evasion. This is what all full timers should look into when they pick there home state. I don't know of any of the firms in Montana that don't tell you to abide by the laws in your home state.

wnytaxman · 12-23-2010, 07:57 AM

Quote:

Originally Posted by Pete & Linda

wnytaxman, I have said you have to abide by the laws in YOUR state. If I live in XX and register my MH in Montana and do not keep the MH in XX I am able to avoid the taxes in XX. This is tax avoidance not tax evasion. This is what all full timers should look into when they pick there home state. I don't know of any of the firms in Montana that don't tell you to abide by the laws in your home state.

I would agree with you on full-timers. The problem comes about with those that use the Montana LLC strictly as a gimmic to avoid the sales tax. This is what John Kerry did to avoid the tax in his home state of Massachusetts on his new yacht by registering it in Rhode Island. He got caught and had his hands slapped. Pete, right now I have a major concern with anyone trying to go too far with things like a MT LLC. If you don't comply with the letter of the law in your state then you are open for a problem. I've been a CPA for over 30 years and I have never seen it this bad for states being over agressive in tax enforcement. If you or I did what I'm seeing many state taxation people do, we would be locked up in jail. It's scary right now on the state tax scene and I would hate to see someone get their butt in a jam over something like sales tax. I know it's a lot of money, but unless someone meets the strict requirements of their particular state then they shouldn't do it.

Max Hubrich · 12-23-2010, 08:24 AM

I've worked too hard all my life to be looking over my shoulder, with one eye open at night, wondering when my state is going to come after me.

When, and if, I sell the stick home, I will establish residency in Montana- IE, drivers license, voting, property ownership, time in state, etc. Then I'll register my new, or present rig, in an LLC in Montana and rest at nights in peace.

When I asked my accountant about this Montana LLC, years ago, he said stay away from it.

I also remember a guy that was named Al Capone

.

dons2346 · 12-23-2010, 10:05 AM

Quote:

Originally Posted by Max Hubrich

When, and if, I sell the stick home, I will establish residency in Montana- IE, drivers license, voting, property ownership, time in state, etc. Then I'll register my new, or present rig, in an LLC in Montana and rest at nights in peace.

And pay MT income tax to boot!

wnytaxman · 12-23-2010, 01:51 PM

Quote:

Originally Posted by dons2346

And pay MT income tax to boot!

A lot of folks will opt for a residency like Florida that apparently has an exemption from the sales tax if the rig is outside the state the first months of ownership. I don't have the details on that, but I do remember that there was some special rules regarding Florida ownership. We also see a number of coaches with Oregon plates, again for sales tax puposes. I'm not sure what the requirements are from Oregon. The Montana LLC is a lot like the Nevada corporations that get advertised on the radio. Unless you plan on moving there or not being in the state you are currently located in, then there isn't a lot of benefit to using the LLC or corporation of the other state.

GaryKD · 12-23-2010, 02:00 PM

For the purpose of the topic of this thread (Montana LLC), at a macro level, the Florida law is:
1. From date of purchase one has 30 days to remove the vehicle from the state.
2. The vehicle must remain out of the state 6 months and 1 day from the date of purchase.
3. The vehicle can return to the state for no more than 6 months per year and retain its' out of state registration/tag.

The above is what governs a Florida resident. Additional details can be found at the Florida DMV web site.

Lakeman1 · 12-23-2010, 03:54 PM

wnytaxman, I am in agreement with you, do NOT break the law. My sales tax here in SC is caped at $300 so I did not have a problem paying that.
Max Hubrich if you establish a residency you won't need the LLC thing.

HandyBob · 01-01-2011, 10:04 AM

I am now a legal resident of Montana and that is where we lived before we sold everything and became full timers. My wife was a legal secretary/paralegal for many years before retiring and we know many Montana lawyers. I will offer no opinions about the laws in other states, but there are two things that need to be said here regarding Montana law.

First, if you have an LLC in Montana, do you file a tax return there? An LLC is a business and not filing a return, no matter what your level of income or it's source, is a red flag and is inviting trouble from the state of Montana.

Second, when I asked one of our better lawyer friends several years ago in Missoula, MT (where most of those LLC's are registered) about the legality of these LLC's his response was "We don't know.... It has never been tested in court."

The firms doing the LLC's are making money doing so. You need to consider just how factual they are being when they offer their opinion. Do you want to be involved in the first test case?

dons2346 · 01-01-2011, 01:35 PM

"Second, when I asked one of our better lawyer friends several years ago in Missoula, MT (where most of those LLC's are registered) about the legality of these LLC's his response was "We don't know.... It has never been tested in court."

There has been a court case that involved a resident of CO. Seems he LLC'ed in MT and then kept the coach at his house in CO. He was paid a visit by the locals who wanted tax money and registration fees. Went to court and he lost, cost him $25,000 plus tax plus registration fees.

He then got on another BB whining about the 25K and how could he get out of paying.

HandyBob · 01-02-2011, 09:03 AM

I have heard of several problems people have had with their actual states if residency due to avoiding taxes. Montana is happy to take your registration fees for the motor home. The same thing is being done in the boating world. My point was that by having a business in Montana you are risking having Montana coming after you for income taxes. This is what has not been tested in court as far as I know. I am sure that firm in Missoula who writes those LLC's will be happy to represent anyone in court if this does happen. Of course, I am also sure that they will do it for free.