Montana LLC's revisited

[edsaylor]

Recently I have heard of many bad things being done to people with Montana tags. In TN recently, the State troopers targeted people leaving a rally giving tickets for no CDL, saying that it was a commercial vehicle since it was owned by an LLC. They also added a ticket for no log book, which commercial drivers are required to keep. Then many got tickets for being overlength.. The long and short is I became concerned about having Montana tags, so I terminated the LLC and took the notice of termination from the Sec of State of Montana, along with the minutes of the meeting of the LLC terminating the LLC and transferring the coach to me as member of the LLC, the Montana title, and a copy of new insurance in my name to the tag office in Port St.Lucie, where I have owned an RV lot for many years, and in a matter of minutes had a new Florida tag--NO TAX due. Only an impact fee (since I did not have anything licenced in FL), and the cost of the tag until July of 2012. I sure feel more comfortable now and it was a very smooth transaction. I recommend it if you own property in FL.:)

[phorner]

Ed,

Personally, I think you made a wise decision. Every state is looking for every dollar they can get, and many in law enforcement may feel that their job may be at risk if their department budget isn't supported by enough revenue.

From building and zoning violations to speeding tickets there are fewer and fewer "warnings" being given and more fines collected in
an attempt to balance budgets without further tax increases.

[AmeriStar]

I believe that you should title and license your vehicles in the state of your primary residence. In Nebraska, where I live, it has become a huge issue for law enforcement to ticket owners of vehicles that are licenced in South Dakota, Oregon, Montana and other similar states that have no sales tax for rv's.
In a recient news story, in 2010 an additional 17 million in fines and sales tax has been collected by the state of Nebraska from tax dodgers.
Many folks will disagree with my view, saying that they don't house their rv in their home state so they shouldn't have to licence and pay taxes to their home state.
If you want to play, you need to pay.

[Jon Wehrenberg]

Every one who has tried to beat the system by forming a Montana LLC should consider CDL and log book citations as good luck. The real issue is tax evasion and the fines and penalties are a whole lot more severe.

I have been preaching this message for a long time because I was party to a conversation from a guy that had just been put through the wringer by the state of California in 1990 or 1991 because he registered his Prevost in NV to avoid the CA sales taxes. He got caught and he had to pay the taxes, plus interest, plus a $75,000 fine.

What did him in was his toad and driver license were both CA.

[johnklopp]

I have registered vehicles in several states. My home is in the republic of California; I have two vehicles registered there and carry a California driver’s license. My corporations address is in Texas and the bus is registered there. I have an apartment in Nashville and a vehicle registered there.

I was recently stopped by the Brentwood TN police department for speeding and questioned at some length why I did not have a Tennessee driver’s license.
The office concluded that my approach was acceptable since it would be very difficult to prove that I spend the majority of my time in any one state.

I believe that my approach granted each state some income from the vehicles registered in each state.

Not sure yet how California will react to the loss of my state income tax since I will file in Tennessee this year.

[merle&louise]

Ed,

I had a Montana LLC. I found out about them about 2 years AFTER I purchased my current coach. I had the paperwork done and I bought Louise a new Cadillac and we titled it in the Montana LLC. Each year I had to pay the state of Montana $400 in license fees. After the 3rd year (and after reading extensively on POG) I decided to dissolve the LLC and have the Cadillac titled in Louisiana. I had to pay the tax, but I did not incur any penalty or interest.

I sleep much better at night knowing that I don't have to worry about being hassled by law enforcement.

P.S. Sure enjoyed visiting with you in PSL this past February - hope to see you at the Oysterfest mini rally.

[gmcbuffalo]

Driving around the Motorcoach Country Club during the mini rally last month I was surprised at how many folks in the resort have Montana Plates.

[BoaterAl]

ED... with all due respect that everyone doesn't panic having a Montana LLC.
FWIW the deal in Tenn was directed to a Prevost HS-45 that was pulling a tri axle trailer. As some of the TN troopers explained when one of them addressed the group, attention attracted to because "Combination is over length". There was conversation with the driver as to the status as the tri -axle trailer tags and the bus tags .Trailer was logoed for a commercial company on both sides. That's how I believe the next step took the trooper to ask for CDL and log book. There of course is probably more to this. Having attended the meeting when the invited TN trooper addressed the rally members... IMO this was a single incident. TN troopers are aware of the Montana LLC's but there is usually something that attracts attention to the motorhome. For example , speed, follow to close, aggressive driving.
Tenn as I understand is somewhat less forgiving on CDL's, log books, and trailers because of the entertainer bus traffic in TN. When I see all the Montana plates in the RV parks reminds me ....there sure are a lot of people on vacation from Montana here.

[Jon Wehrenberg]

Al is correct regarding the trailer. There is a quirk in the TN laws that FORBIDS a commercial bus from towing. If a bus is corporate owned or has commercial plates it cannot tow a car, a trailer or anything. A motor home is the exception to the law. It can tow anything. I am not clear however if one is towing a trailer that weighs more than 10,000 because the law requires a class A CDL if the towed trailer exceeds that weight and I do not see any exceptions to that.

If Rob or Wendy Russell are reading this maybe they can chime in because Rob had to help an owner of an entertainer bus because the driver was towing a trailer and the bus was a commercial vehicle. Rob had to hitch up to the trailer with a pickup and tow it to the state line. The driver was ticketed for no Class A CDL, and for towing a trailer with a commercial bus. The second coach (also towing) was given a pass because the bus was a private coach, not registered as a commercial vehicle or corporate owned. This happened in Cookeville and there is apparently a TN trooper there that has been focusing on Prevost coaches.

However, do not confuse this with the issue of MT LLCs. As states get more desperate for revenue they will definitely be looking for tax evaders. Unless there is a business justification for a MT registration, and unless a driver possesses a MT license and the toad is licensed in MT you are setting yourself up for potential fines and taxes. If the coach, toad and driver license are all from MT it is virtually impossible for a cop during a traffic stop to figure out you were trying to avoid sales taxes or high registration fees. That is unless the neighbors in your home state are jealous and turn you in.

[Sawbonz]

Listen, I pay my share of taxes and then some. But, if there is a legal way around it, I intend to take it.

For the savings on a newer rig, you could buy a small property in Montana to make yourself feel all warm and fuzzy, and justify getting a license from there. If you have the rig titled there, it isn't such a big deal to add your toad, and you still have money to fly there and have them take your picture!

[stj]

All of this reminds me of my first day in a Tax Accounting class in college. The professor walks in and opens with, "What's the difference between Tax Evasion and Tax Avoidance.....Getting Caught. Now, open your text to page..."

[Jon Wehrenberg]

Karl, That's what is great about America. We are free to do as we please most of the time. The issue that should concern people who use a Montana LLC to avoid their state's sales tax is not if you own property or if you have your toad licensed, but the question of if your coach and you are truly from Montana.

A long time back the brother of the mayor of Buffalo NY claimed FL residency to avoid the NY state income tax. Apparently jealous neighbors reported him. Different states have different definitions as to what constitutes residency and what tax avoidance is legal. NY determined based on their legal definition he was in fact a NY resident and he paid dearly for tax evasion. Owning a piece of Montana may be all that is required to avoid any problems, but only in the context of your state's laws and definitions. From what has been posted here and from what I learned over the years, states in financial trouble get very creative at seeking out tax EVADERS and extracting the tax, interest and penalties.

We can debate this until the bovines arrive back home, but the bottom line is what may work for you and your tolerance of risk is not likely to match my take on the same thing. Both of us will be right.

[travelite]

Karl,

I agree. It's our responsiblity to keep as much as we can, and given what it takes to purchase, run, and maintain one of these buses, it's probably safe to assume that we've all paid our fair share of taxes. :)

If you're interested in a Montana LLC, here's the best thing I've run across yet on LLC's created for the sole purpose of registering vehicles:

http://www.myrv.us/Pgs/RV/montana.htm

[merle&louise]

Since there are 5 or 6 other states that do not charge sales tax on motorhomes, wouldn't it make sense to use one of those states? The Montana license plate is a red flag! Maybe the others would be a better choice!

[gmcbuffalo]

Many years ago there was a RV converter here in Lake Grove Oregon that was registering RV for out of state people that bought their RV's. The State came after him and closed in down and fined him. There was some repercussion on the RV owners but don't remember what. Maybe a letter to their State DMV????. I think if you don't like it you VOTE with your feet and money. Move and take your money with you.

Someone said a Socialist government is great until you run out of Other peoples money. And that is what is driving the increase in ticketing and ridiculous fines.