FYI
this is off a Dealer site that I monitor daily.....the Tomato Can who responded under the "comments" section is not me.
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Some car buyers beat sales tax through Montana “LLC” loophole
A legal loophole allows adventurous car buyers to skip local sales taxes
(1/28/2008)
DealersEdge Daily Headlines
At the Flagg RV Center near Boston, Mass., salespeople sometimes meet customers who are different from the others eyeing the scores of motor homes in the dealer's lot.
As the Framingham MetroWest Daily News reports, these buyers stand out because, unlike their fellow state residents, they can purchase vehicles costing $100,000 or more without paying a dime in sales tax.
The buyers avoid the tax by taking advantage of Montana's laws governing corporations and motor vehicles. Using those laws, individuals can buy a vehicle through a Montana-based limited liability company - or LLC - and registering it in that state.
The process works because, unlike other states, Montana will register vehicles not garaged within its borders.
Montana-registered vehicles don't need annual inspections, and buying a vehicle through a Montana company avoids sales tax because the state has none, according to Deer Creek Corporate Services in Helena, Mont.
The company offers out-of-state customers the chance to set up their own Montana-based companies in order to save money when buying a vehicle. They've helped customers register RVs, cars, helicopters, planes and other vehicles.
For a fee, the company handles the paperwork for establishing a limited liability company with the Montana secretary of state. Deer Creek will also act as the physical Montana address for the LLC and forward mail to their out-of-state customers.
Once the LLC is established, a customer can purchase a vehicle on behalf of that organization in their home state. Because the LLC is bound by Montana law, and the vehicle legally belongs to that LLC, a customer's home state can't charge sales tax on the purchase. Deer Creek can also file the paperwork for a Montana registration and plates.
Deer Creek handles about 700 to 1,000 customers a year.
But the scheme might not be available much longer. It has earned the ire of some Montana officials, including Dean Roberts, administrator for Montana's motor vehicle division.
"This is upsetting the laws of the other states. We don't like the practice," Mr. Roberts said. "I don't like it from an ethics point of view."
Montana public records for LLCs are left with only a company's official address, which can be as simple as an attorney's office.
Comments:
Monday, January 28, 2008 12:39:32 PM by Anonymous
Another example to point out the ridiculous inequity of our taxation system. If you see an RV costing 100k or more..many 1M and more, chances are good it's registered in Florida, Montana or someplace without sales tax. Or the owner is an idiot. If Taxachusetts and other big sales tax states are losing this revenue anyway, wouldnt it be wise for them to change the way they tax? The State can turn around and come after instate residents with a use tax, but a more fair system would be a lot easier.
Wendy and Rick DeSilva
'08 Marathon H-3
2017 F350 platinum
Mahwah, NJ
Brant Beach, NJ
Pelican Lake, Fla