Pay sales tax when car is purchased. These people are absolutely violating state law. I sleep really well with that plate on my car. IMHO California must recognize the laws of Montana. Your own neighbor whose kids come over to play in your pool, may be an informant. I was unaware of of how this worked until a few days ago, when i spoke with a gentleman who has been doing this for several years. The state is calling these LLC's exactly what they are, a sham to avoid taxes. ">, Rallies Attended: 8;Gatherings Attended: 3, B.A.R.T. Discussion in 'Ferrari Discussion (not model specific)' started by Terence Courtnage, Oct 25, 2018. Naturally, they caution the RV owner to keep detailed records that establish the motorhomes whereabouts. See the Louisiana Supreme Court case about this very issue. Ed Bolian's Response Video:https://www.youtube.com/watch?v=Lw2B9spZjrIThe Jalopnik Article:https://jalopnik.com/georgia-is-cracking-down-on-instagram-bros-re. To avoid that one guy I know never brings his Montana LLC licensed MH into Cal, -ever-. Montana Limited Liability Companies. Its tough being a minority here. The IRS treats one-member LLCs as sole proprietorships for tax purposes. This Montana scheme is very appealing to many. And they will be happy to collect a nice commission on the premium. Still, I can only assume this is why a lot of U-Haul's equipment is so old. if that was a used car the sales tax in theory was paid on it when titled for the first time. Bank and insurance company need to know that the LLC owns the coach. They dont pull out the green eyeshades until they receive a claim. Forgetting the Montana tax avoidance scheme, buying at RV is usually the second most expensive purchase you will ever make after buying a house. Thank you for reading the article and taking time to reply. Plus it was is tax evation and you may o r may not get caught. When youre buying a high-dollar luxury car, sports car, truck, or RV, those taxes can really put a hurting on you. November 27, 2021at8:33 pm, Smarter Thanyou said: I would recommend that you refrain from giving legal advice. Hi Steve. I recall that California has been on the warpath for a number of years against Oregon (which changed its rules) and Montana. Wonder why? She also taught legal writing at the University of Houston Law School. A California resident is required to register with the Secretary of State and pay tax to California. I just dont register them in California. We have probably about 5,000 folks who live in North Idaho and commute twenty-five miles to jobs in Spokane, WA and a similar number from WA who commute to N. Idaho jobs each day. 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. And theyll be sitting across the street from your house photographing you pulling in and out of your own driveway. And to the one comment about taking advantage of perks but not wanting to pay. Or over time. e.g. Other wise, Texas doesnt care. Recently the Georgia Department of Revenue decided to start cracking down on exotic car owners registering their cars in Montana to avoid taxes. Sure, that 200-acre ranch property costs a cool $2 million. Yes, I get irritated when I see this. Invest in a Grizzlies or Bobcats-themed license plate frame. Oregon) and the owners of the vehicles are California residents. Will there be a problem with the local taxing authorities for not having paid local sales tax? How is this different from what fleets do? 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. I don't blame either for trying to keep/collect their money. And as far as property taxes are concerned, the owner of the RV park pays them, and passes the cost on to the RVers who stay there. December 07, 2021at8:10 pm, B Moore said: Note the last sentence Please support our sponsors and let them know you heard about their products on iRV2. Not knowing where to park the RV, our daughter is now parked in a friends driveway, just waiting for the lifting of the law saying she must stay there Until she leaves the state where she is parked. So business buys it (its registered and delivered to Hillsboro Oregon) and then leases it back to themselves or a management/charter company. My questions around this are: Location: Off the road after 14 years full timing. Have registered to vote etc. LLC. It pays to research VERY CAREFULLY before going for any out of state registration plan. , a 2005 Volvo tractor converted to carry the smart and tow the 5'er. If you live in Texas and setup a Montana LLC for the express purpose of not paying sales tax, you will be fine as long as you stay out of Texas with the LLC titled vehicle. They may look at it as 'evasion' and not be friendly when they give you the 'past due notice' for taxes they (key word, "they") feel you owe. I purchased a new coach two weeks ago and looked at doing the same. If you form a Montana LLC and have . Thats why we have written our RV Buying Secrets Guide. Like references on using this opportunity (it isnt a loophole, its simply how the law was written to benefit wealthy people). Then you have to comply with commercial trucking regulations. Nobody else needs to hear it. But in California, the state revenue agents demand an additional $101,500 in sales tax on that car. Two years later, when the Louisiana Department of Revenue caught up with Thomas, officials said he owed $49,509 in Louisiana sales tax and penalties, but Thomas appealed and won. Featured Destinations - Campgrounds and Sights to See Inside This Renovated 1983 Scamp Trailer, RV Safe Turn By Turn Directions on Your Phone. It has cost a ton of tax revenue. Adhering to the advice of legal counsel will provide you with peace of mind and worry-free RV travels. I am trying to research the possibility of forming an LLC in Montana and purchasing and insuring my new motorhome through a Montana LLC. Still have the radios Officer Josh Waites explains what prompted their. The state is now cracking down on these . The LLC registers and plates the vehicle in Montana. CA has a hotline to report this. The announcement is part of a continuing crackdown against student loan debt relief companies . Ridiculous. 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. We establish Montana LLCs for you to own your vehicles for only $300, and we do it in a couple days. But full-boat sales taxes on private party sales are ridiculous. Put yourself in the Trooper/Officer's shoes for a moment: You are assigned to a CA checkpoint, you see a high-dollar RV roll up, you see the Montana plates, the driver hands you a CA license and a registration for a Montana business entity. K. Susie Adams has been a lawyer for over 30 years, spending 15 of those years working as a trial lawyer. California is on a rampage on everything at all times and that is no exaggeration, the state is deep, deep in the hole ya know. what is the reasonable assumption here? We were within our rights to keep MI and not change everything to CA. I pay the sales tax in California on my cars I register in Montana. As a matter of fact, the California IFTA guide book states that RV's are not considered under that reg.Thats a 2003 edition that was sent to my next door neighbor and when he called, they reportedly told him that had been changed.!!! Qualified motor vehicle does not include recreational vehicles. Home was where I park it. P.S Thank you for interesting article, Excellent article, Mike. You can clearly see by these legal restrictions that the other states dont take kindly to Montanas proffered loophole to potential RV owners. It isn't, and there has already been a legal challenge state's effort to force taxation on cars that are owned and registered out of state in which the state lost in a federal court (in LA). So technically fines and penalties can still come your way. California is aggressively going after both kinds of people now. As the sole owner of your LLC, you must report all profits (or losses) of the LLC on Schedule C and submit it with your 1040 tax return. Bill. But to stay in line with the rules to keep from having to pay the tax can be challenging, depending on how you use your RV (boat, airplane, etc), and depending on your state can be so restrictive as to make it not worth it. Or maybe you can give others some advice? So if youre driving your car on any toll roads, youre probably going to get caught. That avoids sales tax fraud but it doesn't avoid the California failure to register laws, annual registration fees and the compliance with smog laws, assuming you don't also leave the car in Montana. If you live conveniently near a state border, this could be a reasonable option. When you return, you can stay another 89 days before you have to take an out-of-state trip. So, if you truly want to leave your cares behind when you choose the full-time RV lifestyle, I recommend staying informed and remain certain that you are following the proper procedures to avoid future legal problems. Just wait until they start taxing home purchases. Sign up for US Legal Forms to save, print, and fill out legal templates without bounds. Since you have a rental agreement with the MT LLC, do you need to file a tax return for the LLC. There is no free lunch. And theyrepissed. It costs you about $1,000 to have a Montana law firm set up your LLC and do the registration and titling paperwork and send you back the Montana license plates. Steve Mr. I paid my taxes. Why in the world would I fabricate something like this, I still have a job to occupy my time. Thus, the process for obtaining Texas vehicle registration and driver license is efficient and speedy. After arriving in Livingston, they visited Escapees RV Club national headquarters where they obtained their new Texas address. Instead, it was bought by a Montana company, one formed for the sole purpose of buying the RV. Llcs are entirely a separate tax entity of that state. Springtime in the desert southwest promises sunny days and balmy nights as the 62nd Escapade returns to Tucson, AZ.+ Read More. But be aware that hat local revenue officials and law enforcement are walking through car shows with cameras, looking for cars with Montana tags. To add to your article and I feel correct decision1) when any of the LLC creating law firms are asked for an opinion of its legality they make none and send you a copy of your present state law re who is required to have plates in that state 2) as an insurance agent for many years I also have serious issues of using a personal Auto Policy to cover a vehicle that is a commercial enterprise. Is there a time factor involved? The basis of the method is also the basis of how wealthy people write off their luxury cars. California law says that you have to register the car within 20 days of entry into California. You wont be bothered in California. . Unsubscribe me. Do you need advice on what products to buy? In their defense, the couple had to swear that they had not been in Texas for more than 30 days during the past year. Why? No problem getting insurance in LLC name and if I had wanted to finance that would not have been a problem either. Call your local taxing authority and ask. If you get thumped by Fairfax County for running out-of-state tags, they levy a fine and penalty and go back to the date of purchase. In some tax-aggressive states, like California, Colorado, and Georgia, revenue officials are even sending scouts into storage facility lots and RV parks to track down and identify any RVs or other high-dollar vehicles with Montana plates. Regardless of where you live. Susie and her husband, James Frost, reside in Livingston, Texas. August 05, 2016at10:48 am, No Nonsense Landlord said: So you moved to a conservative state, because you like the environment better than where you were. One is a result of the way the business works, the other is tax evasion. Thats more than some of the guys who prep and detail your new car on the lot make in a year. You might want to search for that thread and read up on it. Currently Active Users Viewing This Thread: 1. For about 2 years we were quite legal with having MI plates on the vehicles while we were in CA. If you purchase outside of Texas, of course you wont have to sign a Texas form, but some states share this information back to Texas, or any other state for that matter. Go ask my friend who thought he was ok. Not so much. This prevents revenue inspectors in your state from finding your car and proving that you store the car in your home state. Thats painting at target on your back. I dont criticize them for their decision. Because Montana has no sale tax on an RV, your only cost is the $1,000 to set up your LLC "business.". October 18, 2021at10:32 pm, Dr. Mike said: I understand this article focuses on out-of-state folks forming an LLC and then purchasing an RV to avoid the sales tax. The hassle of always looking over my shoulder just isnt worth the tax savings. Then theyll look at everything. This bi-weekly newsletter is full of everything you want to know. 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. And that arguments probably a loser in court. A newly retired couple, lets call them David and Dianne, did their homework before becoming full-time RVers. Should You Leave On Your RV Exterior Lights At Nig 7 Romantic Ideas For Valentine's Day In An RV, Don't Miss Paradise Oaks RV Resort In Florida, Currently Active Users Viewing This Thread: 1. February 20, 2016at7:54 pm, Keith Lowery said: I just wanted Montana license plates so no one would know Im from Texas. Because Montana has no sale tax on an RV, your only cost is the $1,000 to set up your LLC business. That busness technically owns your RV. significant infos. It's not a front business that does zero deals with anyone a year set up solely for the purpose of the owner to evade paying taxes on a car. The State Trooper can call Elvis if hell answer the phone, but it wont matter. Then you can be in trouble. Absolutely. Loring & Associates (who Mrs. Adams works with) typically offer a free consultation, which sounds like it would be helpful in your case. Call us today! That way I'll have a chance that it'll get lost. And what additional fees and taxes are in Delaware? That way, your state Revenue Man cant argue that your LLC is a shell corporation used solely as a tax dodge. However, here is how I would approach it from a logical (but not necessarily relevant) standpoint. 2022 Genesis GV-80. I would suspect most people who do this fudge here and there when it comes to their home state. Your email address will not be published. Great article! Taxing a car multiple times is the same as stealing. Heres a link to said video: https://www.youtube.com/watch?v=ebDF-C7GJec. How didthathappen?. Whatever. Case in point, it's about $600 if you own a new $40,000 vehicle. You need an attorney in California, not Montana, it is in California you (or he) have/has to appear in court. brandon fugal wife; lucky 13 magazine 450 bushmaster. Thousands of RV owners around the country do this and dozens of Montana legal firms specialize in making it happen. US Legal Forms is a trustworthy resource of over 85k professional and up-to-date legal documents collected by states and use cases. Part of MOTORSPORT NETWORK. Forming an LLC does not create a business nor does it create a corporation. And now you are trying to change it to be more like the state you moved away from? Theyll go on to say, You told us on the application that you were keeping the car in your garage in Provo, Utah. Consistency between these items, license plates and driver license, is the best way to proceed. MS resident here. 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. And BOOM youll get a nastygram in the mail saying you owe tens of thousands of dollars to the tax man. Id have to agree that in California I have seen cops pull you over for those plates and with the emission and loud exhaust being a big deal. 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. 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! Your email address will not be published. Check it out by clicking here. A Montana LLC is considered a Montana resident and, like any other resident of Montana, won't pay a sales tax on any purchase. I do not remember the thread that well since it does not apply to me but I believe that was the topic of it. All vehicles inside the LLC are rated commercial - because it's a business. So be discreet, and be judicious. Discussion in 'California (Southern)' started by Texas Forever, Feb 13, 2011. He asked to see Diannes driver license and noted it was also Texas. January 06, 2016at3:16 pm, inthecloset said: Adding to the complication is if you do this you can be forced to have a CDL depending on the size of the motorhome and the state you operate the motorhome in. Have you considered that the money grab by the states isnt exactly moral? ", 1001 Boardwalk Springs Place,Suite 111O'Fallon, MO 63368, About Us If your eager-beaver neighborhood agent wasnt thinking, and just added your Lambo to your personal policy, alongside your sensible minivan (hey, we dont judge! Resources mentioned in this video: Catch more great investing & business tips on our YouTube channel There are a lot of others doing it too. Is this just a big hoax? RVers Ask: What's The Best Way To Sell An RV? Saved about $400 on the 5er licence and that was after they figured the sales tax difference. If I own a business that does business in Arizona, and I live in Utah, where do the taxes get paid? Joel is correct, but I find it funny on doing a google search for information that many of the websites refer to LLC's as corporations and/or companies in the descriptions, but when you dig into the legaleze and instructions it only refers to company not corporation. Its clear the benefits of saving thousands of dollars in sales and use taxes are very tempting. Or, so they thought! So its obvious the vehicle hasnt just driven in from Montana for the holidays. Required fields are marked *. I think that the MT LCC is a bad idea for most. You can also make things a little more difficult for your state Revenue Man by purchasing the vehicle from a dealer outside of your state of residence, You could also try storing or garaging the car out of state. David and Dianne had completed the process in less than one day. But we rent both of our houses. No it isn't. Georgia state law requires vehicles domiciled in Georgia to be registered and plated in Georgia within 30 days. But, The law can be tricky about Montana LLC RV Titling. Which gives them the right to deny your claim, flat-out. Most state laws are reciprocating. February 27, 2021at5:23 am, John Koenig said: MI Attourney Steve Lehto covers this topic in detail on his YouTube channel. Once law enforcement suspects youre keeping your Montana-tagged high-value vehicle in your home state, theyll be checking your Facebook and Instagram. Visited a lot of states, haven't camped in manyyet. I see this house photographing you pulling in and out of state and pay tax to California one. 300, and fill out legal templates without bounds registration plan, print, fill! Peace of mind and worry-free RV travels in sales tax the smart tow. Are, a sham to avoid taxes car on the warpath for a number of years against Oregon ( changed. Sole proprietorships for tax purposes to carry the smart and tow the 5'er up on it it not! Since you have to register the car in your home state, theyll checking. 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Forming an LLC in Montana, Feb 13, 2011 Inside this Renovated 1983 Trailer... Entry into California and insuring my new motorhome through a Montana LLC Excellent article, article... Fines and penalties can still come your way kindly to Montanas proffered loophole to potential owners! Was paid on it LLC in Montana in making it happen records that establish the motorhomes whereabouts Escapees RV national. Promises sunny days and balmy nights as the 62nd Escapade returns to Tucson, AZ.+ Read.... To be more like the state Revenue agents demand an additional $ 101,500 sales. Between these items, license plates so no one would know Im from.... Might want to know RV, your only cost is the $ 1,000 set! Know never brings his Montana LLC licensed MH into Cal, -ever- but in California, law... It was also Texas RV Buying Secrets Guide owns the coach to an!