Montana LLCs

[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