Bill. 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. 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. So technically fines and penalties can still come your way. Think Health Care is expensive now??? If you have an exceptional car for any reason, or youre considering registering your car in Montana, give us a call at the Select Insurance Group. California law says that you have to register the car within 20 days of entry into California. Can your domicile be in Delaware: drivers license, voting, mail forwarding address, but register your RV in Montana to safe on the registration fees? Um no thanks. But for other places, it pays to shop around. Case in point, it's about $600 if you own a new $40,000 vehicle. Just wait til it's FREE!!! Toured the Foretravel factory this spring. The hassle of always looking over my shoulder just isnt worth the tax savings. 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. Great article! 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. It WILL save you money! Thats BS. Since when is wifi in Cities suppose to be a God given Right??? 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. While Montana maintains that an RV is not a commerclal vehilce per se, in most states vehicles owned and used by businesses are considered "commercial" vehicles. You can clearly see by these legal restrictions that the other states dont take kindly to Montanas proffered loophole to potential RV owners. 2023 MOTORSPORT NETWORK. A luxury sedan or sports car, on the other hand, is much more easily hidden than an RV. 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! (Sorry, Hawaii residents!). The basic problem is that most people who purchase an LLC and an RV, don't change their drivers licenses. 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). Wonder why? And then you have the gas expenses to get it home from Montana. They can get the ownership of the company from Montana. When asked by the office clerk if their Jeep was their only vehicle, they answered, yes, because technically the RV belonged to the Montana LLC. Why? If you drive your RV to another state every three months, they interpret that as keeping the motorhome in your home state for no more than 90 consecutive days. 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. 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. And some states are already cracking down on people caught parking cars in their state that have Montana tags. Check it out by clicking here. Bank and insurance company need to know that the LLC owns the coach. Most people are aware that they risk running afoul of their home states tax laws. Ngoc , Im certain that if a Cal State Trooper were to pull you over and find you had a Cal driver-license, a toad-car licensed in Cal and a motor-home with Montana plates it would not go well. How is this different from what fleets do? Qualified motor vehicle does not include recreational vehicles. 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. Nevertheless, lots of higher-end car and RV owners have assessed the legal and enforcement landscape, and believe the tax savings to be worth the risk: Go to luxury or sports car shows outside of Montana, or any RV park well away from Montana, and chances are good youll see a lot of Montana plates. No problem getting insurance in LLC name and if I had wanted to finance that would not have been a problem either. 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! Tax evasion is not my goal, saving money is. (Truly, I forget).. ">, Rallies Attended: 8;Gatherings Attended: 3, B.A.R.T. Required fields are marked *. 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. 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. The tax structures between the two states are very different. Nothing has changed but reading your blog makes me wonder if it would be best to redo our wills in SD. And theyll be sitting across the street from your house photographing you pulling in and out of your own driveway. Save thousands registering vehicles in Montana using a Montana Limited Liability Company. I never say the I HAVE A MOTOR HOME REGISTERED IN A LLC etc..wake up people, the LLC is a separate legal entity just as you ALL CAPITAL NAME is LOL. We establish Montana LLCs for you to own your vehicles for only $300, and we do it in a couple days. 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. Absolutely. I am second owner and paid 13% tax Receive Escapees RV Club News straight to your inbox! So, they headed for Texas, driving the RV and towing their Jeep. I suspect you are also outing yourself with the state in terms of where the car is located and I am sure that no good deed will go unpunished. This is exactly what Ive been wondering. Find An Agent SKP #131800, Hi there! 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. ), 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. significant infos. Especially California and Colorado are really cracking down on this. 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. I did have to pay 6% sales tax when I bought it, but nothing since. Then you can be in trouble. An LLC can also be used to hold assets (such as real estate, vehicles, boats, or aircraft). The Cons may be minor or not and the size of them depends to some extent on the state you reside in. Kali also has the worst maintained roads in the west. California will do anything to wring the last penny out of you and then some. Or, so they thought! As a lawyer advising people about establishing domicile in Texas, I can guarantee that the best way to disprove your claim of Texas domicile is to spend too little time in the state. Call us today! Ridiculous. This means that the LLC itself does not pay taxes and does not have to file a return with the IRS. "But I own a home in Parker or Havasu. 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 paid my taxes. The only way I can think of this working out would be if the LLC owned the motorhome and then leased it at below market rates to the person in the high tax state. But it wasnt technically Thomas who made the purchase. Is there a loophole for those who do Montana LLC RV Titling? Choose a subscription to save and fill them out at any time effortlessly. U-Haul and other legitimate rental businesses pay all applicable state/local sales and corporate income taxes on their rentals. 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. It's a $750 value, and you'll walk away with a custom tax reduction plan designed specifically for you. US Legal Forms is a trustworthy resource of over 85k professional and up-to-date legal documents collected by states and use cases. So is this a business-use vehicle? In their defense, the couple had to swear that they had not been in Texas for more than 30 days during the past year. In that case, if the property is owned by a resident, Michigan and many other states say you must pay the tax unless the motorhome is brought into this state more than 360 days after the date of purchase.. Says so in the advertisements in Trailer Life magazine, "Montana has no sales tax." And your LLC is a Montana corporation. Insurance Ludwig Featured Destinations - Campgrounds and Sights to See Inside This Renovated 1983 Scamp Trailer, RV Safe Turn By Turn Directions on Your Phone. Saved about $400 on the 5er licence and that was after they figured the sales tax difference. As Dianne drove through Washington State, she didnt realize she was in a speed zone. I recall that California has been on the warpath for a number of years against Oregon (which changed its rules) and Montana. From 20112016, she was executive director of Childrenz Haven, the Child Advocacy Center of Polk County, Texas. 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. Pepper.. is your neighbor by any chance a CA resident, and how heavy was his RV? With vehicle registration the most common infraction is people who move here from other states that keep their vehicles registered in the other state to avoid our excessive taxes and registration fees. Heres how to keep the target sign off your back. Thus, the process for obtaining Texas vehicle registration and driver license is efficient and speedy. All rights reserved. The personal auto specifically excludes coverage for commercial activities/ventures. All rights reserved. Adhering to the advice of legal counsel will provide you with peace of mind and worry-free RV travels. Thats how the Montana law firms insist you can avoid high registration fees. January 29, 2017at1:26 pm, gaiusgracchus said: First of all, what are states doing taxing full time RVers anyway for buying a home? Drove it to Ca where we live. Avoiding sales tax by using a Montana LLC is not illegal nor a scam. You are currently viewing our boards as a guest so you have limited access to our community. Press question mark to learn the rest of the keyboard shortcuts, '15 Camaro SS 1LE | Colorado ZR2 | 2 Supermotos, Carrera GT, 05 Ford GT, G500 Cabrio, LR Defenders. article is amazing, great written and include almost all But, The law can be tricky about Montana LLC RV Titling. Did you know you can write off the entirety of a private jet purchase still? 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. Another good reason I moved from CA. But if you purchase your vehicle through an LLC in Montana, you wouldnt have to pay sales tax on the vehicle at all. One other thing to remember: California is not the only state cracking down on attempts to avoid paying taxes. Montana Llc. Taxes are the price we pay for a civilized society. I was also going to point out it is Limited Liability Company and not Corporation. 2005 Damon Intruder 377 Alas declared a total loss after a semi "nicked" it. Of course WA looked like FL after the King County voting mess last year. 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. Anybody can form an LLC in Montana. The carriers we work with at Select Insurance Group understand this segment of the market. CA has a hotline to report this. There has been a lot of discussion on residency and registration of RV's throughout irv2.com. MS resident here. Worthless whiners like this blogger are just that. They want their money. The value up to 100 percent can be written off immediately. The National Conference of State Legislatures reports California and Massachusetts have passed legislation to prevent citizens from taking advantage of Montanas vehicle registration laws. If so it would be boilerplate with no changes. They were being accused of a felony, potentially punishable with six months to two years in prison. Since an LLC is a business you can also be subject to IFTA fuel tax as well. 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. if that was a used car the sales tax in theory was paid on it when titled for the first time. Join the #1 RV Forum Today - It's Totally Free! They know the game. 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.!!! 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). See the Louisiana Supreme Court case about this very issue. Part of MOTORSPORT NETWORK. Id like to see extra posts like this . Also, have you heard any war stories about California cracking down on 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. Do you have any responsibility to pay the sales tax to your new state or do you just register the coach like any other vehicle? 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.. 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. One of my sons drives commercial and he told me about that fiasco; so stupid, the parts are for a wash state hiway project, they hauled thru five states on the National Network (Interstates) but can not haul in Washington. Mike refers to Michigan a lot. Instead, it was bought by a Montana company, one formed for the sole purpose of buying the RV. There is no free lunch. Or maybe you can give others some advice? 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. Most state laws are reciprocating. Shes not doing anything wrong. The announcement is part of a continuing crackdown against student loan debt relief companies . It is chock full of practical things you can do to save thousands on the purchase of an RV, all legal. 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. These people are absolutely violating state law. 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. Finally insurance and finance make this even more complex. File Articles of Organization. ). 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. There is absolutely nothing wrong with a MT LLC if you abide by the rules of the state you are a resident of. Frequently Asked. Recently the Georgia Department of Revenue decided to start cracking down on exotic car owners registering their cars in Montana to avoid taxes. 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 digress, pay the sales tax and then they want property tax on an already taxed item every year. Setting Up Your Domicile In Texas 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. Planning to use Montana state to register our RV Call your local taxing authority and ask. This Montana scheme is very appealing to many. Its not like totaling out a seven year old Ford Focus. An LLC is an asset protection entity that has no tax standing. Next, theyll notice that the vehicle is registered to an LLC, not to an individual. Covers fuel permits for US & Canada. 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. The more you give the government the more they want and take. Montana LLC. Or over time. The state is getting theirs. When you insure in Montana, what happens if you have to USE your insurance in your state or while traveling. It can only work with LLCs formed in Montana because Montana is the only state which imposes no sales tax on the purchase of vehicles by its residents, including resident LLCs. California is aggressively going after both kinds of people now. We want to be fulltime RVing. K. Susie Adams has been a lawyer for over 30 years, spending 15 of those years working as a trial lawyer. Besides this, many insurers have been known to frown at covering an RV that is titled in Montana when the owner of the LLC lives in another state. Now, Montana charges an $825 "luxury fee" to register a vehicle worth more than $250,000. Create an account to follow your favorite communities and start taking part in conversations. If you form a Montana LLC and have . Im talking about the practice of setting up an LLC business in Montana to purchase a motorhome, thus avoiding sales and use tax and often stiff registration fees in the owners home state. In fact, about one out of every 16 of all McLaren P1s ever made on the planet just happen to be registered in Montana. Arizona charges a vehicle license tax (VLT), based on value, when you register, which can be pretty pricey on new vehicles. 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. 855-721-0777. California wants us to report our neighbors for registration violations, smoking violations, burning wood on no burn days and excess water usage. 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. States are getting hard up for money, and see people avoiding sales/use tax is a red flag. I pay the sales tax in California on my cars I register in Montana. Invest in a Grizzlies or Bobcats-themed license plate frame. They very well may never be sued or have an issue. For about 2 years we were quite legal with having MI plates on the vehicles while we were in CA. California, Massachusetts and Iowa have passed laws aiming to prevent their residents from using the Montana loophole. For example, buy some investment property in Montana, and own them within your LLC. If you live in California, dont take a photograph of your Montana-tagged Testa Rosa with a backdrop of the Golden Gate Bridge. And then title their newly-purchased vehicle in the Montana LLCs name. 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. Did you tell us this on the app? And that arguments probably a loser in court. It is pretty obvious that Preston did not read all 711 prior posts in this thread, but he may want to read post #1. Any comments ? . The State Trooper can call Elvis if hell answer the phone, but it wont matter. Hi: Looks as if California has found a way to make up some of the money certain RVers have been trying to cheat them out of. All states have rules about how long a vehicle can be in the state in the possession of a resident before it needs to be registered. FerrariChat.com has no association with Ferrari S.p.A. 2023 FerrariChat. "Just write down the information and get it to us, we will take it from there," said California Highway Patrol Officer David Singer. Isn't IFTA federal? 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