Unlike the mass market insurance companies, our carriers know the deal, and our agents know the right questions to ask to make sure youre getting the insurance protection you need. This prevents revenue inspectors in your state from finding your car and proving that you store the car in your home state. 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. 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. I pay the taxes because if my son thinks the situation is dodgy, I will go with his judgement. Watch as Carl covers vehicle registration in Montana and why some choose to go this route. Your email address will not be published. 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. CHP clamping down on drivers who avoid California fees. I did have to pay 6% sales tax when I bought it, but nothing since. Sign up for US Legal Forms to save, print, and fill out legal templates without bounds. We are sure to be in SD at least once a yes or more often-we have family on both sides. Do you need advice on what products to buy? It depends on the state lease regulations if this can work. For example the LLC would purchase a $250,000 motorhome and then turn around and lease it for $200 per month to a Michigan resident. Whatever. The LLC in Montana is owned by a Michigan resident. But to stay in line with the rules to keep from having to pay the tax can be challenging, depending on how you use your RV (boat, airplane, etc), and depending on your state can be so restrictive as to make it not worth it. 1 permit for all of the states & provinces you operate in, not 50+ permits. Regardless, the law is the same, if you bring it back to Texas, you will need to pay use/sales tax. So, what has been happening is that the high tax states that do impose use and sales taxes and high registration fees on RVs have been taking aggresive steps to counter the scheme by writing laws and regulations that make it very difficult to take advantage of the plan. 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. And then you have the gas expenses to get it home from Montana. Some states have passed laws specifically targeting people who use out-of-state car registrations as a tax avoidance technique. Youre very mistaken and your conscience is misguided. With specific questions like yours, we recommend you reach out to legal counsel directly so all factors can be considered in the discussion. (log books, annual inspections, CDL, etc). Ed Bolian's Response Video:https://www.youtube.com/watch?v=Lw2B9spZjrIThe Jalopnik Article:https://jalopnik.com/georgia-is-cracking-down-on-instagram-bros-re. Yes, I get irritated when I see this. Since I am not trying to create MORE conflict in my life, I think I will let this idea of a Montana LLC be nothing more than an interesting thought and an interesting thread. Setting Up Your Domicile In Texas She also taught legal writing at the University of Houston Law School. Blog I pay income tax to the state and federal government. Indeed, forming LLCs and registering RVs like this is a big business out there. When youre buying a high-dollar luxury car, sports car, truck, or RV, those taxes can really put a hurting on you. Unsubscribe me. Does Car Insurance Cover Catalytic Converter Theft. Thank you for our RVing community and this forum. For about 2 years we were quite legal with having MI plates on the vehicles while we were in CA. I am not a lawyer so take what a I say carefully. Or maybe you can give others some advice? buy it! Testimonials. 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. ), 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. It has cost a ton of tax revenue. 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. but alas the. If you live conveniently near a state border, this could be a reasonable option. Says so in the advertisements in Trailer Life magazine, "Montana has no sales tax." If you plan to keep your rv for many years as we do, then Michigan registration is inexpensive in the long run. 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! I have a feeling u/Doug-DeMuro will be satisfied to know that he registered his Ford GT properly(Context). However, here is how I would approach it from a logical (but not necessarily relevant) standpoint. Naturally, they caution the RV owner to keep detailed records that establish the motorhomes whereabouts. Worthless whiners like this blogger are just that. Drivers who want to use the Montana LLC technique should be very careful when insuring these cars. So while forming an LLC in Montana and using it to buy a vehicle is perfectly legal in Montana, doing it to avoid paying sales tax in your own personal state of residence may not be. 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. 3 min read 1. Choose a subscription to save and fill them out at any time effortlessly. I may not like those laws, but my conscience just wont let me do something that to me seems questionable. Qualified motor vehicle does not include recreational vehicles. For example, Louisiana slaps a 9% tax on vehicle sales. 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. No matter where you fit in you'll find that iRV2 is a great community to join. There is absolutely nothing wrong with a MT LLC if you abide by the rules of the state you are a resident of. . Some of you are going to try anyway. article is amazing, great written and include almost all Invest in a Grizzlies or Bobcats-themed license plate frame. If I own a business that does business in Arizona, and I live in Utah, where do the taxes get paid? Also, be careful driving your RV with Montana tags while towing your car with California tags in California with a California drivers license. But it wasnt technically Thomas who made the purchase. And then title their newly-purchased vehicle in the Montana LLC's name. We cant say the same for all the name-brand mass market carriers do. Michigan has a one time, lifetime registration fee for towable rvs. I purchased a new coach two weeks ago and looked at doing the same. 2023 MOTORSPORT NETWORK. Unless your agent specializes in the luxury/non-standard car market, they may not even know how to properly fill out the application to ensure your vehicle is covered when it counts. Join Date: Apr 2012. An LLC, or limited liability company, is a business structure that can combine the best features of a corporation and a partnership. And think of the money he can save on his tags! (Truly, I forget).. After Hurricane Harvey, theres even a greater need for assistance in this regard. The state is getting theirs. !The state of CA considers this RV a commercial vehicle and must have a IFTA sticker,thats a fuel tax stamp, thats is obtained in the state you are registered in. Thank you for reading the article and taking time to reply. It would only work in situations where the motorhome is owned free and clear because obtaining financing for such an arrangement would be difficult. And as another point I would like to thank those that do this illegally, so I can pay more tax for THEIR gain. Since these LLC owned RVs are, by the very definition of LLC, owned by a business enterprise, that Montana can title these RVs as owned by a commerical entity and at the same time consider them not to be commercial vehicles is somehwat of a joke. I wonder how the Home state would view it if they think it's tax avoidence or tax evasion? Many times I stop people for speeding and see the California driver's license and the vehicle is registered in Arizona. Phil & Evy Somsen I loved the specifics Does someone know where I could possibly grab a template FL HSMV 85008 form to use ? All rights reserved. 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. Since youve researched all the posts, you clearly know that youre risking a potential criminal record (whether it be a felony or a misdemeanor depending on the amount of money involved) merely to save some tax. I get the appeal if youre buying a $350K RV. Receive Escapees RV Club News straight to your inbox! We were within our rights to keep MI and not change everything to CA. So not everyone with plates from another state for awhile is breaking the law. Once law enforcement suspects youre keeping your Montana-tagged high-value vehicle in your home state, theyll be checking your Facebook and Instagram. 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. 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. 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. Sure you can form an LLC in Montana and register a vehicle there. https://jalopnik.com/the-pitfalls-of-the-montana-license-plate-scam-1711216059, (You must log in or sign up to post here. And they will be happy to collect a nice commission on the premium. Montana Llc For Cars. They brought along their Texas vehicle registration, proof of insurance, their unexpired California driver licenses and other proof of required identification. 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. So its obvious the vehicle hasnt just driven in from Montana for the holidays. 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. Others say inspectors cruise RV storage facilities facilities and actively look for vehicles with Montana plates. If so it would be boilerplate with no changes. Kali also has the worst maintained roads in the west. Officer Josh Waites explains what prompted their. I don't cheat on these things but will be d@@med if I report someone. The issue here, though, is what would a court decide? Do you even have a legitimate insurable interest in the vehicle at all? 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! Shes not doing anything wrong. At least they used to be. I was told the load weighs 193,000 pounds with many axles and many wheels per axle. He was very dubious of the practice, so I registered the vehicle in Virgina (my home state). One other thing to remember: California is not the only state cracking down on attempts to avoid paying taxes. Just wait til it's FREE!!! And to the one comment about taking advantage of perks but not wanting to pay. I ran the idea past my son who is both a lawyer and someone who can always find the cheapest way to do things. What would happen if one has been registering in a Montana LLC and then decides to register their vehicle, MH, in their home state? We know dozens of people whove purchased RVS in Montana and Wyoming, though none are from Michigan and all RV full-time. Domiciled in South Dakota. That way I'll have a chance that it'll get lost. We sold everything in Iowa where we had lived for almost 20 years. You don't buy the motor home, your LLC does. Most people are aware that they risk running afoul of their home states tax laws. I just eliminated their main focus which was tax evasion. but not tax evasion illegal since FL does not charge a property tax. In fact, about one out of every 16 of all McLaren P1s ever made on the planet just happen to be registered in Montana. And BOOM youll get a nastygram in the mail saying you owe tens of thousands of dollars to the tax man. I recently bought used RV from Texas on November 6th. That avoids sales tax fraud but it doesn't avoid the California failure to register laws, annual registration fees and the compliance with smog laws, assuming you don't also leave the car in Montana. Sure, that 200-acre ranch property costs a cool $2 million. Avoiding sales tax by using a Montana LLC is not illegal nor a scam. Nobody else needs to hear it. 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. Then you can be in trouble. These people are absolutely violating state law. The more you give the government the more they want and take. I would definitely consider registering an LLC in MT considering my home state VLT is outrageous when youre considering buying an expensive RV and your 1st year VLT can be thousands of dollars. We want to be fulltime RVing. 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). California Highway Patrol is actively looking for and flagging drivers pulled over with California drivers licenses driving cars with Montana plates. There are a lot of others doing it too. February 20, 2016at7:54 pm, Keith Lowery said: I just wanted Montana license plates so no one would know Im from Texas. If you live in a state and register your vehicles there, good for you. And what additional fees and taxes are in Delaware? Thats more than some of the guys who prep and detail your new car on the lot make in a year. if that was a used car the sales tax in theory was paid on it when titled for the first time. But this article has made sure I will not be relocating to Michigan and purchasing my RV there! 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. Thank you for sharing very informative article. This covid 19 situation has really put folks around here in a situation. Then you have to comply with commercial trucking regulations. Whether you want your LLC expedited and filed in 1 hour or if you are ok with our normal process and turnaround of 24 hours we will make sure to get them filed based on your individual need. 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