OK, back in the club again .... but need help!

[flyu2there]

John, here's the current plan, let me know what you think. I was planning on finding space an an RV resort in Lake Havasu area, and visiting it regularly on weekends as possible. As such I would show usage, park fees, grocery bills etc from AZ, but not necessarily a lot of traveling.

As I understand it, the BOE will send me a notice at 6 months to try and make me justify the no-tax payment. IF the coach is still out of the area at 6 months, using it as specified, what do you think, would that work? I'd also probably have at least a trip to POG rally in Oklahoma (or whereever).

IF that's not enough, I guess I could purchase a lot out where Warren has his lot in Lake Havasu RV resort. Would that be better. I would own a lot there, and my coach would be stored there (at least for 6 or more months).

It seems strange, even on the vehicles I've paid CA sales tax, I rarely used it in CA! My major trips, with the exception of two local trips were always out of state. I certainly stored it in state, but really, my driving and use was almost always out of state.

John, you mentioned intent. I will certainly read up a bit more on this, but isn't it perfectly valid to intend to use the coach outside of CA? And IF you do indeed use it outside of CA, then why isn't that sufficient, as long as I'm not storing it, simply waiting to transfer to CA. That specifically is mentioned as non-counting toward the 91 days.

There is also a second statue of the law, which is more confusing to me. And that is IF you bring the coach into the state within the 90 period, then you must prove it is outside of the state more than 1/2 of the next 6 months after it enters the state. It indicate use AND storage as valid in that case.
Ray

Ray,

First of all, where will the coach be licensed/registered? I would presume that you will get a 30 day trip permit from Florida. That being said, California is not an alternative because they (DMV) requires an inspection either by the DMV or a California Law Enforcement Officer; it has to be in California. This refers back to your last paragraph, they WILL collect USE tax at registration then you can file, better said APPEAL to get it back....tough one!

Arizona is one of those states that require a valid Arizona drivers license to register a vehicle and a valid Arizona proof of insurance card. Arizona has it's own way of handling proof of insurance and insurance carriers that do business in the state are required to notify the MVD (Arizona Motor Vehicle Division) that the vehicle is insured; if they do not receive proof within 30 days of vehicle registration then you will receive a certified letter that cancels the registration. The driving license is easy, they simply exchange the California License for an Arizona License and they do it right in the office, no temporary, new AZ License immediately.

Arizona will also want to inspect the vehicle once again by the MVD or an Arizona Peace Officer; they have a form that must be completed. California bases license fee's on what one paid, Arizona uses another method, what the vehicle is worth. The AZ MVD has the NADA and there are no Prevost Conversions in that book; this is where your negotiating skills come into play. Arizona VLF fee's are as high, sometimes a bit higher than California.

As I mentioned, Arizona has NO SALES (USE) tax on casual sales between individuals. They do, however, tax at the prevailing rate if the purchase was made through a dealer, a dealer in any state.

Lake Havasu is an ok place, although a bit geriatric until Spring Break comes around, then all hell breaks loose. It's also kinda, sort of, out of the way, not exactly "freeway close"....there are a number of places from Bullhead in the North and Yuma in the South that you can park/rent/lease or buy. Should you really want to do this on the cheap, consider Quaetzite...right on the 10 and probably the fastest reach from SoCal save possibly Yuma.

Personally, I would keep it out of California for at least 6 months then bring it in with the AZ plates and wait for them to expire before going to the DMV. Any questions and inform them you maintain two residences....if its good enouh for George Bush, its good enough for you! Keep that AZ DL handy, especially on the 10 in the vicinity of Indio!

Hope that helped a bit!

[Ray Davis]

John,

Thanks for the comments. According to my research, and talking to the BOE yesterday, and talking with the DMV service in FL who will be handling this I learned:

* I can indeed register it in CA, and not pay sales tax up front. However, if I cannot meet the burden of proof 6 months later, then I am due not only the sales tax, but some hefty fines and penalties in addition.

* I was told that the VIN verification can be done in FL by an authorized person. I believe they indicated that this would be a FL officer. I did indeed purchase a car from FL dealer a couple of years ago, and I didn't have to do a VIN verification.


There does seem to be a bit of a disagreement between the DMV service and the BOE however. The BOE wants the CA registration before issuing the BOE-111 form (for sales tax), but the DMV wants the BOE form first.


Anyway, all this I've decided to pay the sales tax, but I plan on following the letter of the law, and requesting a refund at the 6 month point when I haven't yet brought it into CA. Actually there are two provisions, I can supposedly keep it out 91 days (probably should be much longer), or I can bring it into the state, and then keep it out of the state more than 1/2 of the following 6 months. I may opt for that. When I do request the refund, I will want to be able to say that it is out of state, HAS been out of state, and is STILL out of state (with appropriate documentation of course)

Hopefully that suffice. If it doesn't then I'm out a chunk of sales tax change (a large chunk), but at least I can't be fined. And if I decide the keeping it outside the state is too difficult, then I'll just bring it in.

I am purchasing direct from Marathon, so the AZ thing wouldn't work for me. Seems like I'd still have to pay sales tax in AZ. At least if I do purchase a lot, I can try to justify the refund that I'm purchasing my retirement spot. I'm getting close to that age!

Ray

[flyu2there]

Ray,

That's good. Probably the safest way to go however, one word of caution and that has to do with a vehicle being out of state. Az is probably the safest as there are thousands of out of state vehicles however the letter of the law reads something like 90 days before AZ registration required.

The cross talking computers have become a two way street...AZ may want their taxes too unless they have a tax treaty with California. That's one to research on the Arizona MVD site.

As mentioned, there are sooooo many out of state vehicles in AZ it is probably a non event but still merits a bit of research.

John

[Jon Wehrenberg]

A bullet proof solution to all of this is to create a Delaware Corporation to buy and own the coach. There are any number of registered agents and you never have to set foot in the state.

Then create a business purpose for the corporation. Can you be an independent contractor having something to do with computers or can you do consulting work for campgrounds, or can you do any work or business that generates revenue and requires travel?

If you can do the above then you can select a domicile that has favorable sales tax and registration fees. That minimizes your initial tax exposure, but the real advantage (and it is worth thousands annually) is all expenses associated with the purchase and operation of the coach become an expense to the Delaware corporation, which as a Chapter S corporation flows its losses through to your personal tax return.

The key is having a legitimate purpose for the bus. Even if you only use it to travel to seminars such as I used to do for several years. I had the entire seminar display in the bay along with handouts. All of that was impossible to carry on a commercial flight and the specialized nature of the displays were such that if lost in shipment I was totally screwed. I kept accurate and detailed logs. I did personal travel, but as long as the trip was for a business purpose and the bus had to go to a specific city, it did not matter to the IRS if I stayed and enjoyed the city for a few extra days as long as the meals and campground expenses beyond what was required for the business purpose were not shown as expenses.

A few ideas...contact the big rig folks and ask if you can do evaluations. Contact Woodalls, KOA or any franchise to see if you can do campground inspections. Write articles for magazines that require travel to different cities. Ask your employer for business travel assignments. Get compensated an amount equal to a plane ticket and lodging. Design software for the campground industry and make every campground stay a sales call.

Remember, doing it this way means work, but the advantage is that the tax savings pays for about half the cost of the coach over about 5 years. You may never see the money com back to you in the form of a rebate, but you check to the IRS will be a lot smaller.

[flyu2there]

Jon,

Not bullit proof, maybe a smaller target. Ray is a California resident and as such even with a Delaware corporation, even an S corporation, is subject to a minimum California Corporate Tax. The solution, with all the same bennies and far less hassle is the LLC......its just a pass through. No meetings, no minutes and far less tax exposure (corporate); we run several LLC's and disposed of the corporations.


John

[Jon Wehrenberg]

You are right. I am behind the times because we used the sub-S corps before LLCs came into vogue.

The key however is to get a legitimate business purpose. Even if it doesn't make any net income, as long as it has some earnings or can demonstrate the relationship between the business and future earnings the savings are enormous. Depreciating a coach like Rays, plus expensing all operating expenses can be a tax savings in the mid to high five figures.

Absent a business purpose any Corp or LLC, including those Montana ones is tax evasion whether it is just to avoid sales taxes or to allow capture of all bus expenses.

[Darl-Wilson]

Great looking ride! Welcome back too.

One other option no one mentioned is Nevada. Here a private party sale is not subject to any sales tax. "Sales Taxes are not collected on private party vehicle sales that occurred on or after January 1, 2006." ODR in LV would be a great place to store it and most of the same pluses made by FLYBY John about AZ also apply in NV. Just a thought

I have a close relative that uses my address for several nefarious activities. His coach is registered in a Montana LLC, he lives in WA but owns no property there, has other property in CA, OR, and God know where else. He votes in NV and has an NV license (class B) and get mail here. All I know is he tells me he avoids lots of taxes and it is all legal.

Oh, BTW, please tell Fred Green at Marathon, FL hi for me. We met some nice folks at that store. They were very good to us when we picked up our Prevo that was stored there.

[dale farley]

Beautiful bus Ray, inside and out. I know you will enjoy it.

[flyu2there]

Fred Green screws his socks on in the morning, so does his kid that works for Bleakley in Atlanta!

[Darl-Wilson]

Fred Green screws his socks on in the morning, so does his kid that works for Bleakley in Atlanta!

So John, I guess ol' Fred made a homerun on you at one time or another?

His wife, who sells coaches online, had the one we bought listed. It was stored at Marathon, FL. Even though Fred had nothing to do with the deal he, for no charge, went through coach with Martha and I for several hours. The folks at Marathon answered all of our questions and even sent a FEDEX package for us. Oh, Fred even talked the seller of our coach into installing new chassis batteries. Other than that I don't know much about Fred. I'll bet you do..Share it with me in Spearfish.