Montana LLC's

[merle&louise]

Karen & I just returned from a Newell rally in Austin, TX. We met a fellow who lives in Colorado and had his coach registered and licensed in a Montana LLC. He received a certified letter from the state of Colorado informing him that they were assessing sales tax on his coach at a rate of 7.76% on $500,000 plus penalty plus interest and HE MIGHT BE LOOKING AT JAIL TIME!

He contacted the DMV and cleared the matter up by paying the taxes and the penalty and interest. He now has Colorado plates and is very happy to have the ordeal resolved!

His advice to me was: These states are serious about sales tax evasion

Just thought I would pass it on.

[0533]

It is interesting to see states chase citizens for a few thousand bucks, while their largest businesses have their corporate headquarters in the Caymans Bermuda, offshore saving in some cases 100's of Millions of real dollars. the difference is those businesses have bought and paid for state legislators.

If you can legally have an LLC in MT or any other state do it. Make certain that you are legal, get an opinion letter from your Montana attorney before making a commitment. The MT attorney will need to in most cases get an attorney from your home state to sign off. Check list of legal requirements will be generated and must be followed.

If the LLC in MT has at least 2 members, one being your attorney in MT. you operate the LLC as business, keep it out of your home state for the required time, and follow all other rules then you might well meet the legal test.

Lots of people own businesses out of state, pay whatever the state tax they are registered in and this has been going on for ever.

Florida used to chase down boats that were purchased in Florida and spent much of their time there after the purchase. Dealers started to move offices out of state taking the business away to places like the Bahamas. Now Florida has relaxed the rules understanding how much business is generated by the boating public in Florida.

If state governments would concentrate on cleaning up their own house they would not have to worry about shaking down good citizens for excessive fees.

[truk4u]

The States can now buy the data base of Montana LLC's. This has been going on for some time and many states are doing exactly that. You can have all the Attorney's in the world representing your LLC, but in the end, the State is going to win and it's going to be painful.

Just think about how strapped the States are for Revenue and if they can pick up the data base for 3 grand and in return collect thousands of dollars from people trying to beat their sales tax, it's a no brainer.

[jelmore]

As I recall in conversations with our Montana attorney, currently there are some issues with time spent in other states in your motorhome and each state has different requirements for establishing rights to taxation. For us, since we're on the move all the time, seemed there were special circumstances that applied, though complicated.

[0533]

There will always be risks associated with any venture, any business. Governments always want a piece of the pie and will chase down anyone who is willing to keep the world's economy in motion, especially those who do.

Make sure that your LLC actually conducts business with others, conduct the LLC as a business, pay all bills as a business, use the bus as part of an ongoing LLC activity and have an active LLC member living in the state the LLC is registered in.

I cannot with 100% assurance say one will not encounter issues downstream but if you have operated as a business conforming with good business practice, this is about all anyone can do.

I run all business activity through both my accountant and his attorney who is a tax attorney for their blessing. If they hesitate or are unwilling to provide a letter of opinion, then it does not fly.

I purchased a motor vessel from a broker in Maine a few years ago. took it to a well known Maine shipyard for repairs and upgrades.

The state of Maine got wind of this and sent me a bill for 7% sales tax on the purchase. It took 2 years to straighten out, but I did and Maine (who is always thinking of new ways to drive visitors away) rescinded the demand. I was days away from court, if your right your right, if your not you will pay, bottom line.

[Ray Davis]

California is also coming down hard on out of state plates. If you get seen by a highway patrol with out-of-state plates, they will quite often stop you and ask a series of questions

1. where do you live?
2. where do you work?
3. where are your cars registered?
4. where is you coach registered?
5. which state do you pay state income tax to?

You get the drift. If everything is CA, and the bus is MT, you're in for trouble.

I'm not an expert, but evidently it's certainly legal to have out-of-state plates, however, there are certain requirements, one of which I beleive is that the vehicle is out of state for more than 6 months per year.

That's where a lot of people have made the mistake. Simply licensing it in MT, and then keeping it in CA is a problem waiting to happen.

I'm sure that other states have different rules, so tread carefully.

Ray

[0533]

I remember hearing that another place use to ask the same questions to their citizens, I believe it was Nazi Germany. I would not live in a state that treated it's citizens as though they are breaking the law all the time. California seems to be rather tax happy and broke at the same time, sounds like the dream has run its course in Ca. I lived in Ca years ago and found the state to be wonderful, what happened?