That's $36,000 that stays in your pocket. But be aware that hat local revenue officials and law enforcement are walking through car shows with cameras, looking for cars with Montana tags. That sort of exploitation only fuels the resolve of the high tax states to shut down the loophole. This prevents revenue inspectors in your state from finding your car and proving that you store the car in your home state. 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! Great article! This is exactly what Ive been wondering. Then, all your vehicles will have Texas license plates. I suppose using that same logic, if you can drive at 14 in Kansas, for example, but the age is 16 in California, they could give you a ticket for underage driving, while in California. Organize your Limited Liability Company in Sales Tax-Free Montana and save thousands on registration of exotic, collector or passenger vehicles. Join the #1 RV Forum Today - It's Totally Free! I looked into the LLC at one time and it sounded good. Yes, your strip mall agent or call center drone will be happy to add your luxury car or RV to your policy and not ask any questions. Still, I can only assume this is why a lot of U-Haul's equipment is so old. IFTA is an agreement among most U.S. states and Canadian provinces to simplify the reporting of fuel used by motor carriers operating in more than one jurisdiction. File an Affidavit o f Domicile with the court; Change to local businesses for banking, accountants, doctors and dentists; Have your estate planning documents (wills, trusts an d powers o f attorney) written i n Texas; If you still have real estate outside o f Texas, rent the real estate o r otherwise sho w that you arent using it as your hub., All The Things You Need To Know About Domicile As An RVer. According to Jalopnik, one way Georgia tax officials have caught up with owners of Montana-registered cars is by going through Montana registrations looking for cars with custom plates like MTBULLD0G.. LLC. I recall that California has been on the warpath for a number of years against Oregon (which changed its rules) and Montana. What business do you actually conduct in Montana? You can clearly see by these legal restrictions that the other states dont take kindly to Montanas proffered loophole to potential RV owners. All Rights Reserved. Or maybe you can give others some advice? But full-boat sales taxes on private party sales are ridiculous. She owns the LLC and the toad, so if shes properly insured, the only issue is her speeding. Interestingly enough boats and aircraft are not taxed. FAR too many ways to get bitten in the butt. Every dime related is written off. 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. Where you happen to own a home and have a drivers license? Case in point, it's about $600 if you own a new $40,000 vehicle. Absolutely. Because Montana has no sale tax on an RV, your only cost is the $1,000 to set up your LLC "business.". Blast WA all you want too, it looks like a paradise compared to NV. And I live in high taxing Michigan. Essentially, it works like this: You form an LLC business in Montana. Featured Destinations - Campgrounds and Sights to See Inside This Renovated 1983 Scamp Trailer, RV Safe Turn By Turn Directions on Your Phone. There is only one significant pro - the savings in sales tax dollars. And BOOM youll get a nastygram in the mail saying you owe tens of thousands of dollars to the tax man. A Montana LLC is no different than filling up your fuel tank, before entering CA, because the fuel taxes are lower in an adjoining state. Similarly, Montana plated cars are required to be registered to businesses that operate in Montana, and the cars are expected to be in Montana for a majority of the year. NOT one iota!!! (Sorry, Hawaii residents!). It's a $750 value, and you'll walk away with a custom tax reduction plan designed specifically for you. If you purchase within Texas, in order not to have to pay sales tax, you have to sign a Tax Exemption Certificate that basically says you will remove the vehicle from the state and not bring it back. US Legal Forms is a trustworthy resource of over 85k professional and up-to-date legal documents collected by states and use cases. Whatever. Most other states strongly frown on Montana LLC RV Titling. 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. Even if the law is on your side, if your state doesnt think so, you can spend way more in legal fees fighting it than you saved. (log books, annual inspections, CDL, etc). We looked at doing a Montana LLC ,but it seemed a bit risky so we opted to bite the bullet and pay Colorado sales tax when we purchased our RV. Yes, my job is to go after them with a vengeance and I gladly do this because they are cheaters, plain and simple. LLC's are shams for avoiding state sales tax. Ready for a quote? Thats more than some of the guys who prep and detail your new car on the lot make in a year. Pay sales tax when car is purchased. Its not like totaling out a seven year old Ford Focus. Thats BS. Other wise, Texas doesnt care. 3 min read 1. Then theyll look at everything. 200,000 miles a year, 75,000 of which is in Montana alone, up until last year. All rights reserved. A qualified motor vehicle is a motor vehicle used, designed or maintained for transportation of people or property and: Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,793 kilograms; or Thus, Michigan, Colorado, California and a number of other states are very aggressive in hunting down RVs with Montana license plates and suing the owners for taxes and penalties. For about 2 years we were quite legal with having MI plates on the vehicles while we were in CA. 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. Bill. But, what is the deal if you actually live in Montana, purchase an RV and then (lets say 6 months) move to another state. 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. I have a feeling u/Doug-DeMuro will be satisfied to know that he registered his Ford GT properly(Context). 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). 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! My questions around this are: Location: Off the road after 14 years full timing. Why? Is doing Montana LLC RV Titling a wise practice or will it get RVers in trouble in their home states? We are sure to be in SD at least once a yes or more often-we have family on both sides. I need to say here that a great many RVers have taken advantage of the Montana law with no issues. Still have the radios Pepper.. is your neighbor by any chance a CA resident, and how heavy was his RV? Recently the Georgia Department of Revenue decided to start cracking down on exotic car owners registering their cars in Montana to avoid taxes. buy it! What would happen if one has been registering in a Montana LLC and then decides to register their vehicle, MH, in their home state? 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. An LLC is considered a legal entity, able to buy and sell property. The hassle of always looking over my shoulder just isnt worth the tax savings. That means, in effect, I own the RV with Montana plates. For fulltimers, who are gone for very long periods from their home states, it appears to be very workable, especially if those fulltimers have established residency in a low tax state like, say, Florida. If youre buying a $400,000 Bentley, that means youre going to have to fork over the sales price of the car,plus $36,000in sales taxes. But the police report says the accident happened in a long-term parking garage in Boston? You might save a little bit of money for now. We want to be fulltime RVing. All rights reserved. But for other places, it pays to shop around. Sidestepping Sales Tax on Large Vehicles Updated November 5, 2020: We also own 2 cars still register CA and I have CA driver license. Or, so they thought! Here are the taxes alone on a new Pagani Huayra from a private seller in Arcadia, California in 2022. Even if you want to form your LLC yourself, you can still hire us to be your Montana registered agent for just $49 a year. Thank you for sharing very informative article. Thats why we have written our RV Buying Secrets Guide. 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. I found this article very close to my case but I would like to make sure if we are going to be legally with our LLC Montana RV register and still have 2 cars CA register. Sound familiar?? In my state, for example, Michigan Compiled Law sections 257.215, 257.216, and 257.217 require that a nonresident owner of a pleasure vehicle otherwise subject to registration under this act shall not operate the vehicle for a period exceeding 90 days without securing registration in this state.. Part of MOTORSPORT NETWORK. 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. I digress, pay the sales tax and then they want property tax on an already taxed item every year. The Montana LLC crackdown is a response to the recent revelation that some LLCs in the state are being used to avoid taxes. Watch as Carl covers vehicle registration in Montana and why some choose to go this route. If you need Non-Owner or owner SR 22 insurance, Florida and Virginia FR44 insurance, Georgia SR22A insurance, Indiana SR50 insurance, an Ohio SR22 Bond, or DUI insurance, Select Insurance Group is the right SELECTion for you! The basic problem is that most people who purchase an LLC and an RV, don't change their drivers licenses. Copyright 2023 RV Lifestyle. Forgetting the Montana tax avoidance scheme, buying at RV is usually the second most expensive purchase you will ever make after buying a house. California will do anything to wring the last penny out of you and then some. My neighbor was stopped at an AG station on I-15 south going into CA and fined a total of $150. Its much less likely to attract the wrong kind of attention. Kali has just figured out a way to get the use tax + penalties. ", 1001 Boardwalk Springs Place,Suite 111O'Fallon, MO 63368, About Us Many Businesses own personal cars for their owners yet they are not licensed as Commercial vehicles. Theyll go on to say, You told us on the application that you were keeping the car in your garage in Provo, Utah. Nebraska, which has a 7 percent sales tax, is the most recent, according. |Disclaimer|Privacy Policy | Terms of Service. They were being accused of a felony, potentially punishable with six months to two years in prison. People who operate qualified motor vehicles are subject to IFTA licensing. We have had so many expensive problems due to incompetent state employees for the past thirty years money to fix their errors has to come from some place - the residents. Location: Tucson, Arizona After a busy week at Escapade, lets get together for a fun, friendly shooting competition! Naturally, they caution the RV owner to keep detailed records that establish the motorhomes whereabouts. Create an account to follow your favorite communities and start taking part in conversations. Another good reason I moved from CA. However the difference in the cost of insurance made my choice for me. Just wait until they start taxing home purchases. Arizona charges a vehicle license tax (VLT), based on value, when you register, which can be pretty pricey on new vehicles. Seems like unnecessary cost at an attorney. I paid my taxes. It would only work in situations where the motorhome is owned free and clear because obtaining financing for such an arrangement would be difficult. Florida is one of the few states that does not charge property tax on cars so why would they care? The Montana LLC is the owner. California law says that you have to register the car within 20 days of entry into California. February 09, 2022at10:27 pm, Lizzy Roma said: January 12, 2016at12:18 am, HD Case said: Im with you Mike. And when they get to the office, they will call their buddies at the Montana Department of Motor Vehicles and the Department of State and have them pull your information from your Montana LLC filing. 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