Since you have a rental agreement with the MT LLC, do you need to file a tax return for the LLC. Lots of carriers will take your premium, sure. After arriving in Livingston, they visited Escapees RV Club national headquarters where they obtained their new Texas address. Our Goal is to find affordable insurance solutions for every driver, regardless of your previous insurance or accident history. Save thousands registering vehicles in Montana using a Montana Limited Liability Company. 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 don't blame either for trying to keep/collect their money. I even got my old DL# back. In their defense, the couple had to swear that they had not been in Texas for more than 30 days during the past year. But if you purchase your vehicle through an LLC in Montana, you wouldnt have to pay sales tax on the vehicle at all. Is this just a big hoax? Why in the world would I fabricate something like this, I still have a job to occupy my time. Heggen Law Office is located in a commercial building. The only. Full time means the end could come for either/both of us anywhere other than SD. Heres a link to said video: https://www.youtube.com/watch?v=ebDF-C7GJec. Another good reason I moved from CA. Any comments ? 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. Just wait until they start taxing home purchases. Out-of-State Car Registration Crackdown 18,626 views Feb 7, 2020 86 Dislike Share Save NBC Connecticut 5.04K subscribers Drive the streets of Connecticut, and you might have seen a lot of people. The state is getting theirs. I pay the sales tax in California on my cars I register in Montana. 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. This is because the BUSINESS own the vehicle, and the residence of the BUSINESS is Montana. Sure, Americans should pay their fair share in taxes. I did have to pay 6% sales tax when I bought it, but nothing since. Just wait til it's FREE!!! Essentially, it works like this: You form an LLC business in Montana. if that was a used car the sales tax in theory was paid on it when titled for the first time. and do not travel there anymore. Maybe your life partner will frown on you for not licking the boot, But I like the idea of buying it in a Montana LLC, leasing it back to myself, writing off all maintenance, expenses, upgrades, doing a 5 year depreciation schedule on it, and the final result is no sales tax, saving annually on income tax, and enjoying an RV with about 30 percent less investment than the midwit that wrote this article. From 20112016, she was executive director of Childrenz Haven, the Child Advocacy Center of Polk County, Texas. Is doing Montana LLC RV Titling a wise practice or will it get RVers in trouble in their home states? Location: Tucson, Arizona After a busy week at Escapade, lets get together for a fun, friendly shooting competition! 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. Its not an illegal act or a scam. All rights reserved. Giving more money to already inefficient people doesnt make them (government) suddenly more efficient. Press J to jump to the feed. Yes, I get irritated when I see this. Even if you win, you lose. And they will be happy to collect a nice commission on the premium. Copyright 2022 Select Insurance Group. But as states scramble to shore up sinking deficits, I think we can be sure that pursuing RV owners with Montana plates is going to increase, not decrease. Discussion in 'California (Southern)' started by Texas Forever, Feb 13, 2011. Is used in combination when the weight of such combination exceeds 26,000 pounds or 11,793 kilograms gross vehicle or registered gross vehicle weight. So, in the story above where Dianne is traveling in Washingtonthats exactly what shes supposed to dostay out of Texas. These people are absolutely violating state law. Your email address will not be published. That way taxes would be paid in the high tax state but at greatly reduced rates. No problem getting insurance in LLC name and if I had wanted to finance that would not have been a problem either. 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. The car insurance company will look for any thread they can pull on to unravel your claim. All rights reserved. If the RV is licensed in Montana or anywhere else, that state is the determining factor whether is considered a commercial vehicle. They dont pull out the green eyeshades until they receive a claim. "But I own a home in Parker or Havasu. How is this different from what fleets do? Actually, they have Apportioned plates from Arizona. CA has a hotline to report this. This is exactly what Ive been wondering. Just do a Google search on Montana LLCs and youll see how they are trying to drum up business by touting LLCs that allow you to buy no sales tax motorhomes or tax free.. So, they headed for Texas, driving the RV and towing their Jeep. 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. Montana vehicle registrations are yearly. It's a $750 value, and you'll walk away with a custom tax reduction plan designed specifically for you. Thank you for sharing very informative article. Have registered to vote etc. Thats how the Montana law firms insist you can avoid high registration fees. I do not remember the thread but you should be able to find it. Did you know you can write off the entirety of a private jet purchase still? Blast WA all you want too, it looks like a paradise compared to NV. Also, have you heard any war stories about California cracking down on Montana plates? California will do anything to wring the last penny out of you and then some. As far as sales and use taxes on an RV, many states have two provisions one for non-residents, one for residents. Given the creation of this MT strategy it looks like the middle class is now copying the rich in tax avoidance and flushing our country down the drain. If the LLC is in Montana but the owner of that LLC is in Michigan. Forming an LLC does not create a business nor does it create a corporation. Since we have no real property anywhere I am not convinced it needs to be done. Boot Camp will be conducted on Thursday+ Read More, Escapade is the largest, most extensive yearly gathering of all Escapees. 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. 2023 MOTORSPORT NETWORK. 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. 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). I would suspect most people who do this fudge here and there when it comes to their home state. I found this line of thoughts, decided that our daughter should read it and save it. Seems like unnecessary cost at an attorney. Does Car Insurance Cover Catalytic Converter Theft. It is chock full of practical things you can do to save thousands on the purchase of an RV, all legal. Nothing has changed but reading your blog makes me wonder if it would be best to redo our wills in SD. And some states are already cracking down on people caught parking cars in their state that have Montana tags. California Highway Patrol is actively looking for and flagging drivers pulled over with California drivers licenses driving cars with Montana plates. She owns the LLC and the toad, so if shes properly insured, the only issue is her speeding. 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. And if you do bring it back, you understand that you will be liable for the tax (at this point labeled as use tax but is the same amount). 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. I live in California and pay my high registration fees just like I am supposed too. Can your domicile be in Delaware: drivers license, voting, mail forwarding address, but register your RV in Montana to safe on the registration fees? 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. All rights reserved. I loved the specifics Does someone know where I could possibly grab a template FL HSMV 85008 form to use ? Phil & Evy Somsen Instead, it was bought by a Montana company, one formed for the sole purpose of buying the RV. If youre buying a sub $40K travel trailer and live closer to Indiana than Montana, Id think the extra delivery costs to Montana would negate a lot of the advantage. A lot of this article is from the twilight zone. How To Insure a Car with a Rebuilt or Salvage Title, South Dakota Residency for Full-Time RVers. the wealthiest among us, are those who benefit the most from living in the US. I need to say here that a great many RVers have taken advantage of the Montana law with no issues. I dont criticize them for their decision. Since the LLC never paid the sales or use tax but it still could be registered locally. , a 2005 Volvo tractor converted to carry the smart and tow the 5'er. The carriers we work with at Select Insurance Group understand this segment of the market. It's not just Montana LLCs. So they can make a bunch of noise about it, but in the end they will not be able to stop it. Worthless. document.getElementById( "ak_js_2" ).setAttribute( "value", ( new Date() ).getTime() ); Location: 62nd Escapade - Tucson , AZ Information This special pre-Escapade program offers all the acclaimed Boot Camp training seminars, plus some extras! 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. It WILL save you money! Kali has just figured out a way to get the use tax + penalties. Covers fuel permits for US & Canada. Some of you are going to try anyway. I pay income tax to the state and federal government. Since when is wifi in Cities suppose to be a God given Right??? Many times I stop people for speeding and see the California driver's license and the vehicle is registered in Arizona. U-Haul and other legitimate rental businesses pay all applicable state/local sales and corporate income taxes on their rentals. Sidestepping Sales Tax on Large Vehicles Updated November 5, 2020: They brought along their Texas vehicle registration, proof of insurance, their unexpired California driver licenses and other proof of required identification. But for other places, it pays to shop around. 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). The largest collection of professionally-drafted, state-specific official paperwork is at your fingertips. However the difference in the cost of insurance made my choice for me. Even if you should be sued and won, the legal costs of defending yourself could far exceed what you saved on the taxes you avoided. I paid my taxes. the whole thing, for reference. They think these taxpayers are getting over. But this article has made sure I will not be relocating to Michigan and purchasing my RV there! Resources mentioned in this video: Catch more great investing & business tips on our YouTube channel . Check it out by clicking here. 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. Forgetting the Montana tax avoidance scheme, buying at RV is usually the second most expensive purchase you will ever make after buying a house. LLC's are shams for avoiding state sales tax. And what additional fees and taxes are in Delaware? Theyre expensive. 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. US Legal Forms is a trustworthy resource of over 85k professional and up-to-date legal documents collected by states and use cases. Last year I recovered $232,000 in fees that were owed to California by RV and large equipment owners who are California residents and thought they could cheat the system. This works great in places like Kansas City. Please support our sponsors and let them know you heard about their products on iRV2. Or the solution might possibly be to move to a state where there is no sales tax like NH, but the "registration" fees there are very high. Next, theyll notice that the vehicle is registered to an LLC, not to an individual. IFTA is International Fuel Tax Agreement, No matter what a vehicle or RV is titled or registered as, if it is being used as a "commercial vehicle" defined in Code of Federal Regulations 390.5.. Any state can put you in the federal regulations if you fall into that definition. Officer Josh Waites explains what prompted their. 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. So if youre going to do this, dont make it obvious. Blog Locations Wow, way out of our league, but worth the time. Sign up and get a free Packing List for your next trip and free perks, discounts and RV travel tips! 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. Then they send people out to find the cars. They were free to travel whenever they wanted and wherever they wanted, without worry. The Cons may be minor or not and the size of them depends to some extent on the state you reside in. /r/Cars is the largest automotive enthusiast community on the Internet. The state is calling these LLC's exactly what they are, a sham to avoid taxes. 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! Qualified motor vehicle does not include recreational vehicles. Do you need advice on what products to buy? 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. 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. I don't cheat on these things but will be d@@med if I report someone. It would only work in situations where the motorhome is owned free and clear because obtaining financing for such an arrangement would be difficult. So be discreet, and be judicious. Your email address will not be published. The Texas comptrollers office then opened their investigation of the couple. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Make Sure You're Prepared for Your Texas Driver's License! Or over time. The big reason I am not going to go the Montana route should I buy a new RV is because, I think, it borders on the unethical. 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. They may see no ethical dilemma. That's $36,000 that stays in your pocket. 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.. That sort of exploitation only fuels the resolve of the high tax states to shut down the loophole. Or maybe you can give others some advice? I pay the taxes because if my son thinks the situation is dodgy, I will go with his judgement. Creating an LLC for the purposes of avoiding your home state tax may be considered to be fraud rather than a legal loop hole. As our Victoria Guida writes, this represents "the broadest and most concrete effort to date by the U.S. government to consider whether the Fed should issue a digital dollar.". iRV2.com RV Community - Are you about to start a new improvement on your RV or need some help with some maintenance? And theyrepissed. Most people are aware that they risk running afoul of their home states tax laws. 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. Thank you for reading the article and taking time to reply. Youre very mistaken and your conscience is misguided. And your LLC is a Montana corporation. You wont be bothered in California. Have you considered that the money grab by the states isnt exactly moral? Its tough being a minority here. California is trying to crack down on the LLC crowd, that is the problem. 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. An LLC, or limited liability company, is a business structure that can combine the best features of a corporation and a partnership. Uhaul is a legitimate business. LLC. FerrariChat.com has no association with Ferrari S.p.A. 2023 FerrariChat. Florida is one of the few states that does not charge property tax on cars so why would they care? (Truly, I forget).. Just to clarify some of the initial posts. This bi-weekly newsletter is full of everything you want to know. In that sentence is why you should NOT do it. Whats more, you dont even have to be a Montana resident to do it! But now that the job is considered permanent we have moved things over to CA. Part of MOTORSPORT NETWORK. They very well may never be sued or have an issue. 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. You have to supply them with copies of your insurance policy if you claim the vehicle has been garaged out-of-state and that policy has to show the out-of-state address. International Accounting Standards Board : Well, to me this is all a most creative shell game between the individual taxpayer vs. individual regional entities (states) each are running their own affairs and trying to keep their coffers full enough to support their overhead (programs, roads, wages for their institutions and beurocracies, etc etc). 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. RVers Ask: What's The Best Way To Sell An RV? http://www.the-signal.com/archives/14087/, (You must log in or sign up to post here. Is there a loophole for those who do Montana LLC RV Titling? Stick to things useful, helpful, and informative. Loring & Associates (who Mrs. Adams works with) typically offer a free consultation, which sounds like it would be helpful in your case. Llcs are entirely a separate tax entity of that state. Planning to use Montana state to register our RV We are sure to be in SD at least once a yes or more often-we have family on both sides. Jalpa44 Rookie Mar 10, 2015 1 #4 Nov 14, 2016 Hello, They didnt think they were writing a commercial policy when you bought it. Thats more than some of the guys who prep and detail your new car on the lot make in a year. I was told the load weighs 193,000 pounds with many axles and many wheels per axle. The value up to 100 percent can be written off immediately. But full-boat sales taxes on private party sales are ridiculous. Otherwise they must get Michigan tags, registering the car in Michigan. In fact, since you plan to travel extensively throughout the country, to firmly establish Texas as your home, you need to follow what I call the Ten Commandments of Domicile (in this order): The reason the Washington DPS officer suspected a problem was because of the discrepancy between Texas plates, Texas driver licenses and that Montana plate on the RV. I sleep really well with that plate on my car. I travel with a motor coach and jeep both owned and registered by the same Montana LLC, my drivers license is from a state other than Montana, I have a rental agreement from the Montana LLC for the motor home and the jeep. But registering your rig to an LLC in one state while you are licensed in another is no different than driving a U-Haul. Thats why we have written our RV Buying Secrets Guide. What is the requirement and legal. IFTA = International Fuel Tax Agreement. Here's the other article I remembered reading: An LLC is not a corporation nor is it a business. The LLC registers and plates the vehicle in Montana. He noticed the Montana license plate on the RV and the Texas plate on the Jeep. http://www.foretraveloftexas.com/list-inventory.php?category=New, FREE RV Packing List (PLUS 3 Best RV Checklist Apps), Roadschool Classroom Supplies & Organizers for Your RV. California has a big problem with California residents registering as Nevada Corporations. As Dianne drove through Washington State, she didnt realize she was in a speed zone. But we rent both of our houses. Choose a subscription to save and fill them out at any time effortlessly. Hours of Operation. And in some cases, theyll haul you to court, and charge you with criminal conspiracy to defraud the state. For about 2 years we were quite legal with having MI plates on the vehicles while we were in CA. I just eliminated their main focus which was tax evasion. Bought a new truck in Yakima last summer and it cost me about $120 to licence it, NV wanted $793, and sales taxes were comparable, (7.5% vs 7%). : https: //www.youtube.com/watch? v=ebDF-C7GJec not create a corporation nor is it a.... In CA properly insured, the Child Advocacy Center of Polk County,.... Must get Michigan tags, registering the car in Michigan on what products to buy insurance! 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This bi-weekly newsletter is full of everything you want to know who benefit the most from in... About California cracking down on Montana plates Southern ) ' started by Forever... Risk running afoul of their home states a rental agreement with the MT LLC, you! Wealthiest among us, are those who benefit the most from living in the world would I fabricate like. Investigation of the few states that does not create a corporation nor is it a business nor it! ' started by Texas Forever, Feb 13, 2011 article I remembered reading: LLC! Where I could possibly grab a template FL HSMV 85008 form to use Montana! Improvement on your RV or need some help with some maintenance extensive yearly montana llc crackdown california. Big problem with California drivers licenses driving cars with Montana plates Office then opened investigation... Does someone know where I could possibly grab a template FL HSMV 85008 form to use and a.. A free Packing List for your next trip and free perks, discounts RV! Is to find montana llc crackdown california cars this: you form an LLC in one state while are!