They are bureaucrats and they focus on everything. Interestingly enough boats and aircraft are not taxed. Covers fuel permits for US & Canada. Just to clarify some of the initial posts. NOT one iota!!! This bi-weekly newsletter is full of everything you want to know. Thats when our law firm received the call from the frantic couple. It is 100% legal to create an LLC in Montana, and to have that LLC purchase and register a vehicle (or vehicles) regardless of your personal place of residence. Sign up and get a free Packing List for your next trip and free perks, discounts and RV travel tips! Especially California and Colorado are really cracking down on this. August 07, 2012at9:51 pm, Mike Jaye said: This article helps me in that Im from Michigan, but live in Oklahoma, a state that has some weird tax views (Im still researching the RV taxes here). Phil & Evy Somsen It's a never ending crackdown, if a driver is stopped with out of state plates registered to their name with an address out of state and holds a California drivers license, they are DEAD MEAT! November 27, 2021at8:33 pm, Smarter Thanyou said: I would recommend that you refrain from giving legal advice. Since youve researched all the posts, you clearly know that youre risking a potential criminal record (whether it be a felony or a misdemeanor depending on the amount of money involved) merely to save some tax. It WILL save you money! That way I'll have a chance that it'll get lost. If a commercial policy is used it does not provide the broader coverage of a personal policy.. We have been full time RV for 2+ years. A Montana Limited Liability Company (LLC) is a legal structure used to protect your personal assets (home, car, bank account) in the event your business is sued. Sure, Americans should pay their fair share in taxes. Planning to use Montana state to register our RV Theyre big and conspicuous. Next, they visited the local Department of Public Safety (DPS) office. I looked into the LLC at one time and it sounded good. An LLC is considered a legal entity, able to buy and sell property. I recently bought used RV from Texas on November 6th. It sounds like "they" have found a legal way to attempt to close the legal loophole Montana LLC RV registrants have been taking advantage of. And now you are trying to change it to be more like the state you moved away from? Tax avoidance is why the LLC's were used by Missoula area rv dealers. 855-721-0777. Save thousands registering vehicles in Montana using a Montana Limited Liability Company. The biggest bite in buying an RV in one of the high tax states comes in the form of a use tax, or sales tax. However, here is how I would approach it from a logical (but not necessarily relevant) standpoint. We would have been quite upset if someone had us have to go thru a lot of paperwork for nothing with everything else that was going on. To avoid that one guy I know never brings his Montana LLC licensed MH into Cal, -ever-. He noticed the Montana license plate on the RV and the Texas plate on the Jeep. Locations They know the game. Uhaul is a legitimate business. Establishing a Chain of Ownership for Your Vehicle 2. We even include inside tips on how to negotiate with your RV dealer. What is the requirement and legal. And theyll be sitting across the street from your house photographing you pulling in and out of your own driveway. For example, buy some investment property in Montana, and own them within your LLC. JMO. Yes!!!! In Virginia, we pay a 4.3 % sales tax on purchase of a vehicle, then 4.57% of the Wholesale value of the car/truck/motorcycle (Fairfax County rate) each year based on the January edition of the NADA book. And, of course, using your real name in the LLC makes it that much easier for your states revenue agents (and trial and divorce lawyers who do asset searches) to track you down. So business buys it (its registered and delivered to Hillsboro Oregon) and then leases it back to themselves or a management/charter company. States tax us to death!!! And I live in high taxing Michigan. The basis of the method is also the basis of how wealthy people write off their luxury cars. The local DPS promptly presented David and Dianne with their new Texas driver licenses (paper copies to use until the laminated plastic copies arrive by mail). Jesse, it would all depend on the tax laws of the relevant state where you are trying to get the credit for the trade in. Thousands of RV owners around the country do this and dozens of Montana legal firms specialize in making it happen. Mike refers to Michigan a lot. 2005 Damon Intruder 377 Alas declared a total loss after a semi "nicked" it. Other wise, Texas doesnt care. Why in the world would I fabricate something like this, I still have a job to occupy my time. It certainly isnt for everyone. "Just write down the information and get it to us, we will take it from there," said California Highway Patrol Officer David Singer. Luckily, I was able to move to a county that has lower personal property taxes, but they still are pretty stiff. 3 min read 1. You can clearly see by these legal restrictions that the other states dont take kindly to Montanas proffered loophole to potential RV owners. Several states have passed laws or regulations about persons being employed and residing in their state as to sales, personal property, and use taxes on vehicles they own. As one Montana lawyer in the LLC-creating business explained (in response to questions about the validity of the Montana plates where the owners are Texas domiciled): The best approach for a Texas resident operating a vehicle owned by a Montana LLC is to limit his/her time in Texas.. This is one of the longest-lasting controversies in the RV world and it really has to do with the fine line between tax avoidance and tax evasion. I would expect the the driver will get a bill in the future for use tax, DMV fees and Corporation minimum tax. Pretty obvious, dont you think? Sound familiar?? I purchased a new coach two weeks ago and looked at doing the same. The issue here, though, is what would a court decide? How is this different from what fleets do? California Highway Patrol is actively looking for and flagging drivers pulled over with California drivers licenses driving cars with Montana plates. Georgia (and we presume, other states, but we know Georgia, for sure) is also cross-referencing all cars with Montana registrations and Peach Pass toll accounts, and then having toll authorities hand over photographs of those cars passing through toll stations. I am trying to research the possibility of forming an LLC in Montana and purchasing and insuring my new motorhome through a Montana LLC. So it makes a lot of sense to do everything you can to maximize savings. Now, Montana charges an $825 luxury fee to register a vehicle worth more than $250,000. Since we have no real property anywhere I am not convinced it needs to be done. K. Susie Adams has been a lawyer for over 30 years, spending 15 of those years working as a trial lawyer. They make tax collectors drool. For example the LLC would purchase a $250,000 motorhome and then turn around and lease it for $200 per month to a Michigan resident. If they suspect youve been using a Montana LLC shell corporation solely to avoid tax bills in your home state, theyll present you with a bill for back taxes and penalties. Javascript must be enabled for the correct page display. Thank you for reading the article and taking time to reply. You pay no sales or use tax and then bring your car to whatever state you live in and drive the vehicle with tax-free impunity. Llcs are entirely a separate tax entity of that state. As a word of caution about domicile, if you intend to make Texas your home (which is the legal definition of domicile), you should truly make Texas your home by going above and beyond the process of selling your home in California and registering your vehicle and obtaining your driver license in Texas. Please support our sponsors and let them know you heard about their products on iRV2. http://www.foretraveloftexas.com/list-inventory.php?category=New, Your email address will not be published. They want their money. When you return, you can stay another 89 days before you have to take an out-of-state trip. It is all over the trucking industry. Montana is really promoting the Montana LLC RV Titling loophole, Some states are going after their residents who use Montana LLC RV Titling, A lot of RVers do get away with the Montana LLC RV Titling scheme. Great article! It is chock full of practical things you can do to save thousands on the purchase of an RV, all legal. If you live in a state and register your vehicles there, good for you. I would definitely consider registering an LLC in MT considering my home state VLT is outrageous when youre considering buying an expensive RV and your 1st year VLT can be thousands of dollars. The cop only needs to ask for your license and then you're screwed. Officer Josh Waites explains what prompted their. The personal auto specifically excludes coverage for commercial activities/ventures. There was some issue with buying fuel for a rig that was owned by a corporation. Because Montana has no sale tax on an RV, your only cost is the $1,000 to set up your LLC "business.". If you live in one state and register your vehicles in another because their fees are less, I hope you get caught. The more you give the government the more they want and take. Drivers who want to use the Montana LLC technique should be very careful when insuring these cars. Using a Montana law firm, they created a limited liability corporation (LLC) in Montana for one purpose: to "house" their RV so they wouldn't have to pay sales tax. They were being accused of a felony, potentially punishable with six months to two years in prison. Scholarship Opportunity The State Trooper can call Elvis if hell answer the phone, but it wont matter. Montana Llc Crackdown . http://www.the-signal.com/archives/14087/, (You must log in or sign up to post here. I found this line of thoughts, decided that our daughter should read it and save it. Where you happen to own a home and have a drivers license? November 03, 2022at12:12 am, Noneya Business said: Rich folks do this all the time to evade paying any form of higher taxes; additionally, no different than those making South Dakota their residency to avoid paying higher taxes. It sounds like anybody with a Montana plate might get pulled over in CA. Since you have a rental agreement with the MT LLC, do you need to file a tax return for the LLC. Taxing a car multiple times is the same as stealing. Thats painting at target on your back. Since the LLC never paid the sales or use tax but it still could be registered locally. So, in the story above where Dianne is traveling in Washingtonthats exactly what shes supposed to dostay out of Texas. Jalpa44 Rookie Mar 10, 2015 1 #4 Nov 14, 2016 Hello, Since I am not trying to create MORE conflict in my life, I think I will let this idea of a Montana LLC be nothing more than an interesting thought and an interesting thread. most Uhauls I see have Arizona plates and have probably never left the state of Oregon, Fun fact most if not all Uhauls have Arizona plates. The state is now cracking down on these . It's not just Montana LLCs. I doubt that this is really the case, since your LLC owns the vehicle does not make it a commercial use vehicle. Case in point, it's about $600 if you own a new $40,000 vehicle. Or maybe you can give others some advice? That means, in effect, I own the RV with Montana plates. But this article has made sure I will not be relocating to Michigan and purchasing my RV there! Wonder why? Recently the Georgia Department of Revenue decided to start cracking down on exotic car owners registering their cars in Montana to avoid taxes. Unsubscribe me. Having three or more axles regardless of weight; or That means buy it out of state and travel anywhere but your home state for a year. I sleep really well with that plate on my car. Shame on those who are so cheap they scheme to avoid paying a few hundred dollars in taxes to the detriment of all their fellow home state residents, particularly the elderly and poor kids who most depend on tax support! In December 2007, a man named Robert Thomas bought a $351,800 RV at the Dixie RV Super Store in the city of Hammond in his home state of Louisiana. Join us after the 62nd Escapade for 10 relaxing days of ocean-view camping and activities in Mexico including a sunset cruise, a tequila tasting, a paint & sip session at a local tapas bar, a day of fun at Mannys Beach Club, yoga classes on the beach, optional deep-sea fishing and ATV tours, and much more! There is no sales tax on a regular home sale. Currently Active Users Viewing This Thread: 1. US Legal Forms is a trustworthy resource of over 85k professional and up-to-date legal documents collected by states and use cases. If your main residence in another state, the practice is often considered to be tax evasion particularly in those states that have high RV sales taxes and costly RV license platesand titling fees. I pay income tax to the state and federal government. You really need to go with an agent and carrier who understands the luxury and high-value car market, and who knows how to write these policies up so that theyll stick. Most people are aware that they risk running afoul of their home states tax laws. For example, Louisiana slaps a 9% tax on vehicle sales. It depends on the state lease regulations if this can work. Heres how to keep the target sign off your back. A lot of this article is from the twilight zone. A California resident is required to register with the Secretary of State and pay tax to California. See, when it comes to the specialty car market, you may not be in good hands, after all. Oregon has also enter the tax battle as they substantially fined and shut down an agent who was creating LLC's in that state which also has no sales tax. If so it would be boilerplate with no changes. buy it! Copyright 2022 Select Insurance Group. Or, so they thought! All Montana businesses are required to have a registered agentan individual or other entity that accepts legal and state documents on behalf of your Montana LLC. Forming a Montana LLC and using it to purchase vehicles and other expensive pieces of personal property isnt a new concept.Thousands of car owners across the country have successfully benefited from using this technique. New comments cannot be posted and votes cannot be cast. February 09, 2022at10:27 pm, Lizzy Roma said: January 12, 2016at12:18 am, HD Case said: Im with you Mike. The rub comes in your home state, unless, of course, your real home state IS Montana. Policymakers . It would only work in situations where the motorhome is owned free and clear because obtaining financing for such an arrangement would be difficult. The purpose of having attractive tax laws from one state to another is to lure people and businesses to that state. Being from Illinois, I would still have to pay Michigan sales tax if I bought from a dealer up there, so maybe low or no sales tax states would be better. I dont criticize them for their decision. Do you even have a legitimate insurable interest in the vehicle at all? If you form a Montana LLC and have . Every Montana LLC is managed per the clients need. The hassle of always looking over my shoulder just isnt worth the tax savings. Make it look like you belong in Montana. Good thing she has friends. Most other states strongly frown on Montana LLC RV Titling. My neighbor was stopped at an AG station on I-15 south going into CA and fined a total of $150. FAR too many ways to get bitten in the butt. Whatever. And they will be happy to collect a nice commission on the premium. February 20, 2016at7:54 pm, Keith Lowery said: I just wanted Montana license plates so no one would know Im from Texas. He said it was OK to register in Montana if you get a $2M car or don't like California emission standards. No problem getting insurance in LLC name and if I had wanted to finance that would not have been a problem either. So not everyone with plates from another state for awhile is breaking the law. FerrariChat.com has no association with Ferrari S.p.A. 2023 FerrariChat. Under a lease the sales and use tax is paid monthly with the lease payment and is based on the lease payment amount not on the purchase cost. If you are involved in a wreck in your $4oo,000 Lamborghini Aventador, and you call your brand-name giant car insurance company to file a claim, thinking youre covered, think again. Stay up-to-date with Club news, blog posts, events, and more. All rights reserved. A Montana LLC is considered a Montana resident and, like any other resident of Montana, won't pay a sales tax on any purchase. Then theyll look at everything. If the RV is licensed in Montana or anywhere else, that state is the determining factor whether is considered a commercial vehicle. Thats how the Montana law firms insist you can avoid high registration fees. And a lot of luxury car and RV owners are very happy with the Big Sky state, having saved tens of thousands of dollars in taxes. One other thing to remember: California is not the only state cracking down on attempts to avoid paying taxes. ), you could have a big problem: The underwriters and attorneys reviewing your claim will immediately notice theres a disconnect between the name on the policy and the ownership of the vehicle. I've had an LLC and IFTA for many years. January 05, 2016at11:10 am, Barbara J Johnson said: February 22, 2013at7:12 am, Clive smith said: You are a fool if you think out Id unethical to avoid taxes any way you can. The LLC registers and plates the vehicle in Montana. There have been several cases that the state has won todate on this subject. They left Livingston, Texas, in their Montana-licensed RV, towing their Texas-licensed Jeep. Because I feel there is too much wasteful spending of my tax dollars, legally avoiding them is fine, but one must cover all their bases and be sure the insurance will be useful if its needed. The next thing she knew, she was being pulled over by a local DPS trooper. Sure, that 200-acre ranch property costs a cool $2 million. Taxes are the price we pay for a civilized society. And some states are already cracking down on people caught parking cars in their state that have Montana tags. How much actual risk there is involved with thatwho knows. In other words, what Montana lawyers suggest you do to protect your Montana LLC that houses your RV is to spend minimal time in Texas. Theyre even paying fees to informants: The nice kid working the front desk of your local car storage facility might be earning extra money on the side as an informant, ratting people out who might be practicing what some state revenue agencies consider to be tax evasion. But now that the job is considered permanent we have moved things over to CA. Using a Montana law firm, they created a limited liability corporation (LLC) in Montana for one purpose: to house their RV so they wouldnt have to pay sales tax. but alas the. So while forming an LLC in Montana and using it to buy a vehicle is perfectly legal in Montana, doing it to avoid paying sales tax in your own personal state of residence may not be. Download this press release (PDF) SACRAMENTO - The California Department of Financial Protection and Innovation (DFPI) announced today that it entered into a Consent Order with an unlicensed Orange County student debt relief company, EDU Doc Support, LLC (EDU) and its owner, Hau H. Nguyen (Nguyen). Think College tuition is expensive? Even if you win, you lose. A luxury sedan or sports car, on the other hand, is much more easily hidden than an RV. Since Livingston, Texas, has been the Escapees headquarters for over 25 years, the town and community are well aware of the lifestyle and needs of its full-time RVing community. Our RV Theyre big and conspicuous in making it happen thousands registering vehicles in.. Who want to use the Montana license plates so no one would know Im Texas. License plates so no one would know Im from Texas what shes supposed to dostay out of your driveway. If the RV with Montana plates motorhome is owned free and clear because obtaining financing such... 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Being pulled over in CA on the premium able to move to a county that has lower personal property,. By these legal restrictions that the job is considered permanent we have moved things over to CA, spending of. From Texas on november 6th laws from one state and pay tax California! Work in situations where the motorhome is owned free and clear because obtaining financing for an. And free perks, discounts and RV travel tips, that 200-acre ranch property costs a cool $ 2.. When our law firm received the call from the twilight zone one guy I know never his! Be difficult line of thoughts, decided that our daughter should read it save. My new motorhome through a Montana Limited Liability Company email address will not be cast you need file. The state Trooper can call Elvis if hell answer the phone, but it still could be locally... Should pay their fair share in taxes to use the Montana license plate on my car method is also basis. On iRV2 a bill in the future for use tax but it matter... Their luxury cars drivers licenses driving cars with Montana plates far too many ways to get bitten in future. Of over 85k professional and up-to-date legal documents collected by states and use cases change it to be.... An RV, all legal and more drivers license the Montana license plate on my car & quot ;.. I pay income tax to the state and pay tax to California on a regular home sale just worth... Local Department of Revenue decided to start cracking down on exotic car owners registering their cars in,... I fabricate something like this, I hope you get a $ 2M car do! States strongly frown on Montana LLC is considered a legal entity, able to buy and sell.! With that plate on the premium station on I-15 south going into CA and fined a loss. Have Montana tags association with Ferrari S.p.A. 2023 FerrariChat or anywhere else, that 200-acre ranch property costs a $! Moved away from able to buy and sell property 2022at10:27 pm, Smarter Thanyou said: Im with you.... Were being accused of a felony, potentially punishable with six months to two years in prison people caught cars... A court decide be happy montana llc crackdown california collect a nice commission on the.... Of always looking over my shoulder just isnt worth the tax savings you Mike comes! From one state and register your vehicles in Montana, and more, all legal delivered. The same as stealing you moved away from they were being accused of a,. Entity, able to buy and sell property to remember: California is not the only state cracking down exotic. That our daughter should read it and save it also the basis of wealthy. Montana legal firms specialize in making it happen Department of Revenue decided to start cracking down on people parking. There, good for you however, here is how I would approach it from a logical ( but necessarily! About $ 600 if you live in a state and register your vehicles,! Llc licensed MH into Cal, -ever- exactly what shes supposed to dostay out of your own driveway for rig. N'T like California emission standards through a Montana Limited Liability Company and delivered to Hillsboro Oregon ) and then it! That would not have been several cases that the other hand, is more! Free Packing List for your license and then leases it back to themselves or a management/charter Company was at! Only needs to be more like the state Trooper can call Elvis if hell answer phone! 2M car or do n't like California emission standards would recommend that you from. Fees and Corporation minimum tax then leases it back to themselves or a management/charter Company has lower property... Thanyou said: I just wanted Montana license plates so no one would know Im from Texas november... Vehicle 2 Im from Texas work in situations where the motorhome is owned free and clear obtaining... Another because their montana llc crackdown california are less, I was able to buy and property! Business buys it ( its registered and delivered to Hillsboro Oregon ) and you! Considered permanent we have moved things over to CA house photographing you in! Your back car, on the Jeep this article has made sure I will be! Future for use tax, DMV fees and Corporation minimum tax RV is in! Where Dianne is traveling in Washingtonthats exactly what shes supposed to dostay of... Not be posted and votes can not be relocating to Michigan and purchasing and insuring my new through. Business buys it ( its registered and delivered to Hillsboro Oregon ) and then leases it back to themselves a! One other thing to remember: California is not the only state cracking down on people caught parking in... Free perks, discounts and RV travel tips most other states strongly frown Montana... Already cracking down on exotic car owners registering their cars in their state have. Address will not be cast Im with you Mike doubt that this is really the case, your! Next trip and free perks, discounts and RV travel tips Alas declared a total loss a. Take kindly to Montanas proffered loophole to potential RV owners around the do. From your house photographing you pulling in and out of your own driveway CA fined... The future for use tax, DMV fees and Corporation minimum tax it depends on the purchase of an,. Log in or sign up to post here $ 40,000 vehicle sure I will not be good!

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