Montana LLCs

[Pete Masterson]

I hadn't seen any advertising except for a small classified in the FMCA magazine. If, at RV shows, etc. they're marketing is misleading, I agree with your objection. I've pointed out, if you're going to use a Montana LLC, you need to check with your local DMV to ensure that you follow all applicable rules.

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Pete Masterson, Author of

Book Design and Production: A Guide for Authors and Publishers

"Aeonix1@Mac.com"

Aeonix Publishing Group    http://www.aeonix.com

===============================================

On May 26, 2008, at 3:43 PM, Don Bradner wrote:

Not meaningful. The SP corporate business was an actual business, doing business in multiple states. The typical Montana LLC is setup simply for tax avoidance, and does no real business; some states consider that tax evasion, and your choice is to not live in one of those states, or never bring your Montana-registered vehicle in, or be aware that there is some chance, small or large, that you might eventually have to pay.

My only personal objection is to the marketing. Those selling the concept broadcast far and wide that they are legal in Montana (which they are) and that this makes them legal everywhere (which it does not). If there is a disclaimer that it might not work out, it must be buried well in the fine print.

[Don Bradner]

Most of the advertising I've seen has been on the web, although such folks are
routinely in the big tent at Quartzsite and similar. Just Google Montana LLC RV
Registration to see the folks in the business of selling this service.

As Pete pointed out obliquely, California has a method for legal sales tax
avoidance on vehicles, including RVs, Airplanes, and boats. So far as I know, it
is a method that is unique to California. You must take delivery outside of
California and keep it outside the state for 90 days, and you must be careful to
follow all the rules. California RV dealers, and those in adjoining states, are
generally very familiar with the practice and can help with such avoidance.

The rule was changed to a full 12-months, with very little room for a state
resident to use it, in 2004, but it had a 3-year sunset and was not renewed in
2007, so it automatically reverted to the old 90 days.

While aware of the rule, I've never been in the position to take advantage of
it, so I've paid CA sales or use tax on 2 SOBs and one Bird so far

Don Bradner
90 PT40 "Blue Thunder"
Posting today by satellite from Brookings/Harbor Oregon

On 5/26/2008 at 6:30 PM Pete Masterson wrote:

>I hadn't seen any advertising except for a small classified in the
>FMCA magazine. If, at RV shows, etc. they're marketing is misleading,
>I agree with your objection. I've pointed out, if you're going to use
>a Montana LLC, you need to check with your local DMV to ensure that
>you follow all applicable rules.
>
>===============================================
>Pete Masterson, Author of
>Book Design and Production: A Guide for Authors and Publishers
>Aeonix1@...
>Aeonix Publishing Group http://www.aeonix.com
>===============================================
>
>
>On May 26, 2008, at 3:43 PM, Don Bradner wrote:
>
>> Not meaningful. The SP corporate business was an actual business,
>> doing business in multiple states. The typical Montana LLC is setup
>> simply for tax avoidance, and does no real business; some states
>> consider that tax evasion, and your choice is to not live in one of
>> those states, or never bring your Montana-registered vehicle in, or
>> be aware that there is some chance, small or large, that you might
>> eventually have to pay.
>>
>> My only personal objection is to the marketing. Those selling the
>> concept broadcast far and wide that they are legal in Montana
>> (which they are) and that this makes them legal everywhere (which
>> it does not). If there is a disclaimer that it might not work out,
>> it must be buried well in the fine print.
>>

[Ryan Wright]

Pete,

On Mon, May 26, 2008 at 1:19 PM, Pete Masterson wrote:
> CO law reads that "all vehicles in possession of CO residents must be
> registered in CO within 30 days." Since CO can't reach over state lines, CO
> can't enforce it's registration requirements on vehicles or other property
> that remain outside CO.

What if I own a home in Colorado and a home in Florida, and spend
exactly half the year at each? Colorado is going to force me to
register my vehicles there because I'm a Colorado resident with
possession of a vehicle? That's hogwash.

> If the buyer is a multi-state resident (or entity) then the state where the
> product is delivered and/or placed into service will benefit from the sales
> tax payment.

That's a bit difficult on an item like an RV, which is generally
driven across state lines on a regular basis. If I legitimately live
in multiple states, and use the vehicle in all of them, seems to me I
get to pick and choose which state to register that vehicle in.
Imagine Colorado bringing me up on criminal tax evasion charges while
California does the same thing, when I've registered in Washington,
own property in all three states and spend my time in all three.

> Purchase outside the state, do
> not bring into the state for 90 days, and/or have at least 7500 miles on a
> new vehicle -- then you are exempt from paying the sales/use tax.

That's pretty reasonable, actually. If Colorado does have similar
rules then the folks who got caught were just being stupid. Register
to your Montana based company and take a 3 month vacation, then
transfer to CO as a used vehicle. If you're saving fifty grand on
taxes, seems worth it.

I'm a bit sore about vehicle taxes. Washington State has, within the
last few years, begun charging whatever they darn well feel for sales
tax on used vehicle purchases. They have their own book value system
and when you buy a used vehicle, you get to pay tax on the book value
of the car, or what you paid for, whichever is higher. This seems all
fair and well until you buy a $500 car, but the state insists it's
worth $5000 and forces you to pay 8.6% on that - effectively an 86%
tax rate. I've gone through this twice now and it ticks me off to no
end. So, it's hard for me to feel sorry for the state over folks
playing tax shelter games when the state itself is screwing it's
citizens as hard as it can.

-Ryan

[Ryan Wright]

Nope, I live in WA. My coach is registered here and I paid the sales
tax here (it was fair, for once, they actually charged me the right
amount instead of claiming the coach was worth twice what I paid).

However, I read a few comments on the original story
(http://www.denverpost.com/news/ci_9333908), and one guy had a great
one. Bought a $300k RV out of state, brought it home and paid $19.5k
in sales tax, plus a $20,000 motor vehicle use tax, plus licenses and
inspections and he wound up $48,000 out of pocket to register for year
1. As yearly registration fees are based on a depreciated MSRP value,
subsequent years would be $10,000 - $20,000, per year. Now, I don't
know if the commenter was being honest, but if he is, no wonder this
Montana LLC business is so popular.

-Ryan

On Mon, May 26, 2008 at 2:49 PM, Leroy Eckert wrote:
> Don't you live in CA? They have done this for 40 years there long before
> computers. It was called a Use Tax. Perhaps the nomenclature has been
> changed. CA also tries and will tax your retirement if you earned it in that
> state no matter where you live.
>
> Read all you want an hire a $300 per hour lawyer and where is that going.
> Just pay the tax. It is less expensive in the long run and you will sleep
> well.
>
> These days in the electronic world big brother knows what you ate for
> breakfast before it is deposited in the Microphor.
>
> Leroy Eckert
> 1990 WB-40 Smoke N Mirrors
> Dahlonega, GA
> Royale Conversion