Montana LLC's

[phorner]

Just a heads up regarding the Montana LLC registered coaches.

A friend of mine has just recently received notice from the State of Massachusetts. Apparently the state is demanding back taxes, interest, penalties, etc. not only for the current coach, but also for the one owned by them previously. Not a pretty picture as the dollars are very high.

It looks as though the state compared a list of LLC registered vehicles against a list of state residents.

No matter how this turns out, there will certainly be the cost of defending their position as well as many sleepless nights.

Nearly every state is experiencing a fiscal crisis and I'm sure that they have attorneys working overtime trying to figure out ways to add revenues to their budgets.

[Will Garner]

Paul,

Don't you mean the State of Taxachusetts! It was when we lived there in the late 1960's and I don't think it has changed for the better.

[Woody]

Our Montana attorney advised us to get out a year ago.

We are now registered in Fl having only paid sales tax- cheap compared to the penalties.

[merle&louise]

I have a buddy who lives in Colorado; he got the same deal. Boy, was he afraid! The state let him go with paying the tax and a small penalty. He was very happy with the outcome because what they originally were going to do was not good!

They were going to value his $200,000 coach at $575,000 - assess the tax on that amount - calculate the penalty and interest on that amount. When he showed some remorse they lightened the burden. He was lucky.

I formed a Montana LLC two years ago. I did so to try to save some tax money on my next coach. I spent $1100 forming the LLC. In view of these developments, I am going to dissolve the LLC and just pay the tax when I buy another coach.

[truk4u]

Good idea to bring this up again Paul. As I mentioned in the past, the States can now buy the entire list for about $3200.00 and they are doing just that!

Here's a link to Montana Corporation info:
https://app.mt.gov/cgi-bin/corprecords/corprecords.cgi

If you have your Bus in a Montana LLC, I would be concerned regardless of what the MT Attorneys tell you.

[Jon Wehrenberg]

Am I allowed to say "I told you so"?

If you do have a Montana LLC, if you can come up with a legitimate business purpose for the bus you may have a chance to beat the possible financial consequences.

We created the Jamestown Advanced campground equipment product line including fire rings, grilles, picnic tables, and electrical power outlets and the bus was used to attend as many as 30 trade shows annually, carrying the display and providing both our lodging and transportation. It was our ownership of the bus and using campgrounds around the country that inspired the creation of that portion of the business, now its primary business segment.

In later years I put on seminars for a major customer's behalf and the bus carried the seminar materials, samples, literature and AV equipment all of which could only be reliably expected to arrive at the seminar location via our bus or my plane.

As second benefit to having a legitimate business purpose is the bus can be claimed on the tax return. There is not much recapture involved if you expense a depreciating asset, although you will need some paperwork between you and the LLC for personal use.

[GDeen]

When I was at Prevost FW a month ago, I saw 2 motorhomes and 3 entertainers with Montana plates. Going to be lots of unhappy folks.

[jack14r]

If the LLC has a Montana address,wouldn't it be impossible for a state to figure out who owns the coach?Bennett Law uses their address in Montana for the LLC.

[Devin W]

Am I allowed to say "I told you so"?

If you do have a Montana LLC, if you can come up with a legitimate business purpose for the bus you may have a chance to beat the possible financial consequences.

We created the Jamestown Advanced campground equipment product line including fire rings, grilles, picnic tables, and electrical power outlets and the bus was used to attend as many as 30 trade shows annually, carrying the display and providing both our lodging and transportation. It was our ownership of the bus and using campgrounds around the country that inspired the creation of that portion of the business, now its primary business segment.

In later years I put on seminars for a major customer's behalf and the bus carried the seminar materials, samples, literature and AV equipment all of which could only be reliably expected to arrive at the seminar location via our bus or my plane.

As second benefit to having a legitimate business purpose is the bus can be claimed on the tax return. There is not much recapture involved if you expense a depreciating asset, although you will need some paperwork between you and the LLC for personal use.

John, I'm curious if this creates another dilemma in that the coach is then used for interstate commerce and technically is subject to weigh stations and commercial driver rules. In fact, at minimum, once deemed to fall into this category a vehicle must carry DOT ID numbers.

I was thinking about this because I considered associating the bus with my business, but decided I didn't want to take on the possible associated concerns.

[phorner]

Just a heads up regarding the Montana LLC registered coaches.

A friend of mine has just recently received notice from the State of Massachusetts. Apparently the state is demanding back taxes, interest, penalties, etc. not only for the current coach, but also for the one owned by them previously. Not a pretty picture as the dollars are very high.

It looks as though the state compared a list of LLC registered vehicles against a list of state residents.

No matter how this turns out, there will certainly be the cost of defending their position as well as many sleepless nights.

Nearly every state is experiencing a fiscal crisis and I'm sure that they have attorneys working overtime trying to figure out ways to add revenues to their budgets.

This situation was resolved this past summer. The owner of the bus ended up writing a check for $105,000. The "original" tax liability was about $35,000. Interest and penalties added $70,000 to the tab.

Commonly most states will negotiate the amount owed seeking primarily the original tax.

Not in this case.