Page 1 of 3 123 LastLast
Results 1 to 10 of 30

Thread: Montana LLC's

  1. #1
    Just Plain Jeff Guest

    Default Montana LLC's

    In the last couple of months, we've helped here and there on bus deals as a POG service.

    What we are finding is there are a limited number of banks who are willing to participate in Montana LLC financing, as compared to just a year ago. There are a number of factors, it seems, behind the scenes.

    Several states, notably California, are beginning to crack down on California residents who have Montana registrations. This follows a case in Oregon where someone fraudulently registered a coach there and they got smacked down hard (I believe the fine was $100K including the tax, penalties and interest).

    Due to a number of foreclosures on coaches, lenders have been loathe to write extended paper with Montana registration as their recourse is to the LLC, not to the individual...albeit many of these deals have personal guarantees.

    Some insurors are starting to rumble about the Montana registrations as well.

    So, this is really just a report from the trenches at this point. It is too early to figure out if this is the beginning of a trend or a blip on the screen.

    It may have all started when truck4u sold his Marathon and MM and truck went plastic as well. Tough to track these things completely. Try to keep all informed as we hear stuff.

  2. #2
    Join Date
    Apr 2006
    Location
    Lake Forest
    Posts
    2,486

    Default

    Interesting info, Jeff. I purchased a 93 coach in Seattle, and it ended up costing me $15k in licensing fees in CA. At the one year point I was shocked to get another bill for over $1k for renewal (a 14 year old vehicle?). BUT, I was too concerned/scared to try to do the Montana LLC thing.

    I had been considering it for my next renewal (December), but this again gives me pause, since I live in CA.

    I am sure I'll be jumped on for this next remark, but part of me feels that if I live in CA, AND I drive the roads with a vehicle, I should pay vehicle tax in CA. Agreed, I think the cost is WAY too high, but I guess that's a different argument. Granted, I don't use the vehicle a lot, it would be easy to justify a Montana LLC. But something inside tells me that's just wrong ...

    Ray

  3. #3
    Join Date
    Nov 2006
    Location
    Concord, Ohio
    Posts
    285

    Thumbs up

    Boys,
    Please just remember this: Tax evasion is illegal and wrong. Tax avoidance is not and is your God given duty and right as a tax paying American.

  4. #4
    Join Date
    Nov 2006
    Location
    Menifee California
    Posts
    994

    Default Right on Jonnie

    Jonnie, you are right on!

    In CA, you have to keep your rig in another state more than CA., which is why I garage mine in out of state.

    Ray, the lion's share of your 15K was not licensing fees at all. It was sales tax. I think the state charging you sales tax on a used machine that you bought out of state is wrong. Just plain wrong.

    And you can for sure legally register it via MT or other tax friendly places, as long as you comply with the laws of YOUR state. As stated, you can't primarily keep it here to comply with the law.

    After 1 year, you can bring it in state and register it here, paying the way too high reg fees, but if you have owned it a year, you don't have to pay sales tax on it. I do agree that if you primarily keep it here, you should register it here, and as I researched it, it will be about 1400 (+or-) a year but thats the current cost of doing business here.

    In MT, if your coach is 10 yrs old or more, you can get lifetime tags for 360 bucks or so. So when my reg comes up next year, I will get the lifetime MT tags, and probably also register it in CA. Once I register it here, I will bring it back in state. I will keep up with the CA registration until I retire/move out, then the MT tags will be good for the rest of time !

    The problems start when you register out of state, and then park it out in front of the house for months on end, clearly in violation of the law. And if you do that, you don't have much room to bitch if you get caught and fined. Dems da rules.

    As Jonnie points out, this is tax avoidance, just like writing off your mortgage interest. You don't HAVE to write it off, but its a legal way of avoiding that portioin of your tax (a deduction). Tax avoidance is just strategic planning, looking at the tax consequences of various purchases, sales & transactions. Regardless if its registration, or estate planning, retirement planning or whatever, and in and of itself is clearly legal.

    If you violate the law, then you are EVADING the tax, and the state and or federal authorities will likely pay you a visit, and you will find sympathy hard to come by.

    Those are my .02 worth~!~

  5. #5
    Just Plain Jeff Guest

    Default

    A few more observations on what we are seeing:

    In my young and wild days, I worked for the Commissioner of Internal Revenue in Washington, DC (you'll find this out later on anyway, so I may as well say it now). I can remember Commissioner Johnnie Walters, a true Southern Gentleman, wagging his finger saying, "There is sometimes a thin line between Tax Avoidance and Tax Evasion. And that's when we call in the Criminal Division." As a former Fed, I have always paid the price of the sales tax and gone down the road without regrets.

    Many LLC owners echo the earlier comments about having the 'queasy feeling' going down the road later on about having 'saved' the money by doing the LLC.

    Now we had a guy who owned a minining company in Montana, born and lived in Montana and he had the toughest time getting approved there as well. So it seems as if times are changing. It is of course easier to buy with cash for the registration but there may come a day when the gates open.

    The motto, "If it seems too good to be true, it probably is,' may be at work here.

    The purpose of this posting is to keep POG members aware of trends and updates of information so you can make your best informed decisions and the consequences thereof. We're watching this trend and keeping it here on POG which is likely much more private than on Prevost-stuff for now.

    Another benefit of POG.

  6. #6
    Join Date
    Jan 2006
    Location
    anytown
    Posts
    8,908

    Default

    The premise of a MT LLC is excellent. You own a company that is "headquartered" in MT, that company owns a Prevost, and that company allows you to drive its bus.

    That is a very clever way to avoid the sales taxes or licensing fees your home state imposes.

    This approach to tax or fee avoidance begins to fall apart in the eyes of the tax collector when the tax collector is able to prove the LLC has no business purpose and its creation was solely to EVADE the payment of taxes or fees.

    I would bet that as the states which are losing the most revenues to this scheme start adding up the numbers they will find it cost effective to start cross checking the address of LLC owners with MT registrations, and when that occurs they will be able to do computer searches and start sending out bills for taxes, fees, and penalties. It may take some wrangling in the courts but after a while they will penetrate the wall that currently keeps them out of access to the data and then all hell will break loose.

    I'm a chicken like JPJ.

  7. #7
    Just Plain Jeff Guest

    Default

    Cluck, cluck, cluck...

    What is at issue here is the official state of residence. In legal circles, this is determined by what is called, 'the nexus of contact.' (Hey, that's worth somethin' right there, a $50 word at least!).

    The nexus of contact is not where you are, but where you consider your home to be: Voting, mailing address, the place where you nest. Different for full-timers than real property owners.

    All this was developed as the first state sales taxes were imposed. The Wrigley family of chewing gum fame was responsible for all of this. They'd had houses all over the place and used each one to avoid/evade taxes. Finally the states got together and parsed out the residences and defined them for the family. Darned nice of them to do that?

    The problem here is that 1) the path to litigation is that mutiple states make claims on the taxpayer not between each other, putting the taxpayer at odds with multiple states and 2) some states are beginning to share data via computer (oh good). This has already been done in Homestead Exemption states to insure that multiple Homestead Exemptions are not being claimed.

    It's my guess, that since this is really all about money, and governments like to have as much of that as possible, we'll see more states clamping down on the Oregon, South Dakota and Montana LLC deals as they are used more broadly. Remember that many of the litigations can go back several years, so the effect of any enforcement is cumulative.

    Have a nice day.

  8. #8
    Join Date
    Jan 2006
    Location
    Jasper
    Posts
    3,775

    Default

    Mango,

    Did you notice the former IRS Nazi/Tree Hugger called your million dollar, beautiful bus "plastic". I thought he was your buddy....

  9. #9
    Join Date
    Jan 2006
    Location
    anytown
    Posts
    8,908

    Default

    Truk......

    It IS plastic. And on top of that it is glued together. But so is my new car.
    Attached Images Attached Images

  10. #10
    Join Date
    Nov 2006
    Location
    Menifee California
    Posts
    994

    Default Llc

    Fact of the matter is, California could make the MT or SD deals illegal, (like I understand it is in Mass.) but they don't.

    Comply with the law, and you are ok. In our case don't keep it in CA 6 months or more per year, and be able to doucment it, Simple as that.

    In my case, I don't keep it in CA at all, and can clearly document it, because its true. So there ya go. I actually hope to have a place in MT soon then I can dump my upcoming CA tags.

    You guys are muddying up a very simple issue. (IMHO).

    No clucking here!

Similar Threads

  1. Montana LLC's
    By phorner in forum The 'Biz" of Prevost Ownership
    Replies: 39
    Last Post: 10-03-2021, 07:22 PM
  2. Montana LLC ?
    By ajhaig in forum The 'Biz" of Prevost Ownership
    Replies: 1
    Last Post: 12-23-2008, 11:23 AM
  3. Montana LLC - CO, IL & OH
    By truk4u in forum Law and Order
    Replies: 17
    Last Post: 12-19-2007, 06:32 PM
  4. Montana ? ? ?
    By jello_jeep in forum TIPS ON TRAVEL
    Replies: 14
    Last Post: 07-27-2007, 12:04 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •