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Another Domicile Question


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Your decision on if the LLC is worth the ongoing paperwork, with costs for tax filing for the savings on sales tax.

 

As mentioned, you might find that Texas, or Florida would work fine for you as a Domicile state. Research the sales taxes associated with those states, down to the county of potential Domicile location, and see which is the less. Also, SD health insurance companies could surprise us, and change their current policies. Another factor is what may happen to ACA with the Supreme Court. As sales tax is only one angle, also get quotes for vehicle insurance, registration costs too, and crank them into your spread sheet.

 

You have a year or so to go, so make your best decision now, then monitor the ACA and SD to see if things could change before you need to make your final decision.

 

On CA, as mentioned the 540NR will be your friend. We retained rental property, and also our Sticks & Bricks home is now our Vacation home. My wife's mother moved into be in the old primary home that is now our Vacation home. (Rent free for her helps on the budget, and we have someone we trust living in the house, and we visit to check on her several times a year.) California is one of the states that have been known to attempt and claim you a resident long after you have departed. Keep good receipts, keep a good log of your travels, stay legal on being out of state for the required periods of time to remain a Non Resident. Then, only the fickle fates of a computer, or CA Employee, will determine if they want to talk with you more about your leaving the state?

 

One other area to research, as you plan to remain working from the road, is how State Income taxes work in regards to where you were located in regards to when you made your income. Say you are in the Grand Tetons for two months, and made $5K while visiting that state. Does WY feel you owe them income tax on that money made? Or, are you going to pay State Income based upon the taxes involved.

 

One other angle that I've had private PM's on, is if SD looks like the best State for you, minus the health care angle, look at investing in a piece property to run your business out of. Having bills with the State of SD listed on a fixed piece of property, could help you in obtaining health insurance PPO's within SD. And, unless you are receiving subsidize health care, it does not need to be thru the exchange.

 

Best of luck to you, check all of the ongoing costs angles, and then do what seems best to you,

Smitty

Be safe, have fun,

Smitty

04 CC Allure "RooII" - Our "E" ride for life!

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I stand by my statement, my integrity wouldn't allow me to set up a LLC to not pay sales tax. There is nothing ignorant with my position.

I have done the research and I wouldn't do it. You are allowed to do it in MT. It is not against any laws that I know of. We all have our own

standards. Just because you are allowed to do it doesn't make it right. As stated by the first poster, he wants to set up a LLC to not pay sales tax.

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I stand by my statement, my integrity wouldn't allow me to set up a LLC to not pay sales tax. There is nothing ignorant with my position.

I have done the research and I wouldn't do it. You are allowed to do it in MT. It is not against any laws that I know of. We all have our own

standards. Just because you are allowed to do it doesn't make it right. As stated by the first poster, he wants to set up a LLC to not pay sales tax.

I believe you quoted the Gypsy Journal in a post awhile back. Here's what the article said:

 

"One topic I get asked about a lot are Montana LLCs. For years I have been preaching against setting up a Montana LLC to avoid paying sales taxes on an RV. It’s popular with people who live in a state with high registration costs and sales tax, who want to save money. However, it can really bite you in the butt if your home state catches you. Fines can be well over $10,000 and several states are actively looking for residents who do this, including Colorado, Arizona and California."

I'm uncertain how integrity would be an issue if an indiviudal does not LIVE/RESIDE in any state? whj - I think we're in agreement and just not communicating correctly. I would have integrity issues too if I LIVED in a State that charged sales tax and set up a LLC to avoid paying it. If I moved out of that State and travelled the USA and Canada for 5 years, I personally would not have an integrity issue.

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No matter where you feel you "live", "don't live" or if you travel fulltime you are still domiciled in a specific state. And that state will EXPECT that you obey their laws and collect taxes from you if they are a state that taxes certain income. You might choose a state that has no sales tax or vehicle taxes. Let me know when you find that state.

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Living on the road since 2000

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No matter where you feel you "live", "don't live" or if you travel fulltime you are still domiciled in a specific state. And that state will EXPECT that you obey their laws and collect taxes from you if they are a state that taxes certain income. You might choose a state that has no sales tax or vehicle taxes. Let me know when you find that state.

I respectfully disagree. Below an exerpt from the California State Board of Equalization:

 

"Sales and use tax is generally imposed on the purchaser of tangible personal property that is used, consumed, or stored in this state. Sales of vehicles, vessels, and aircraft by licensed dealers are usually subject to sales tax, for which sales tax reimbursement is collected at the time of purchase. Use tax applies to the cost of vehicles, vessels, and aircraft purchased from non-dealers (for example, private parties) or from outside California for use in this state."

I don't know the laws about other states but I have to imagine they can't be any more stringent than CA. So long as the property, vehicle, etc is not used, consumed, or stored in the state no tax is due.

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..I don't know the laws about other states but I have to imagine they can't be any more stringent than CA. So long as the property, vehicle, etc is not used, consumed, or stored in the state no tax is due.

True enough. But that is not the typical usage scenario. And many states do not have exemptions like that.

 

There are special circumstances for many combinations of events. But the bottom line is that an individual is domiciled SOME PLACE. And that place is going to want it's share of your income, registration and titling fees, and perhaps your purchases. To some degree or another. There is no free ride just because you fulltime and are "never in one place for long".

Jack & Danielle Mayer #60376 Lifetime Member
Living on the road since 2000

PLEASE no PM's. Email me. jackdanmayer AT gmail
2016 DRV Houston 44' 5er (we still have it)
2022 New Horizons 43' 5er
2016 Itasca 27N 28' motorhome 
2019 Volvo 860, D13 455/1850, 236" wb, I-Shift, battery-based APU
No truck at the moment - we use one of our demo units
2016 smart Passion, piggyback on the truck
-------------------------------------------------------------------------
See our website for info on New Horizons 5th wheels, HDTs as tow vehicles, communications on the road, and use of solar power
www.jackdanmayer.com
Principal in RVH Lifestyles. RVH-Lifestyles.com

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True enough. But that is not the typical usage scenario. And many states do not have exemptions like that.

 

There are special circumstances for many combinations of events. But the bottom line is that an individual is domiciled SOME PLACE. And that place is going to want it's share of your income, registration and titling fees, and perhaps your purchases. To some degree or another. There is no free ride just because you fulltime and are "never in one place for long".

  • I agree with you - that is not the typical usage scenario, but it could be for a full-time RVer who will be newly retired like myself. Iit's the perfect scenario that a Montana LLC works best for.

 

  • I agree - wherever you are domiciled will want its chunk of income tax should you domcile in a state with income taxes. And very possibly a state like California will also want income tax for rents received from rental properties whether or not you are CA or not. I own rental property in CA. I won't be able to avoid those taxes.

 

  • I do not agree, however, that a state you are domiciled will expect registration and titiling fees if the vehicle does not enter that state. For my personal scenario, my motorhome will be registered in MT as I travel from state-to-state (staying out of where I'm domiciled) and California where I own properties. When we do eventually "settle down" at our domicle or CA and bring the motorhome, then yes, registration/license wil need to be paid. Sales/use tax will not because we will have been out of the state for over 12 months. The sales/use tax waiting period for Florida is 6 months.
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Home sold... buying MH in next month or less and going full time. I have chosen MT as my domicile due to proximity of family in WA and other personal reasons. I have read a lot of discussions on the pros & cons of a MT-LLC. I was told by the WA DMV folks that if I have a valid out of state drivers license, I can buy MH in WA and get a trip permit to leave the state without paying their Sales Tax.

 

My current thinking is to drive to Missoula and get a DL there next week. Of course they will require proof of a MT address which I plan to do by setting up a private box tomorrow online. They can email me the forms and I complete them AND get them notarized before I send them back... and give them my visa # by phone. So when I arrive in Missoula I have proof of a local address, my passport and then take their written DL test and get a temp MT license in exchange for my old WA license. This sets me up to buy a MH anywhere and register the vehicle in MT and pay the MT registration fee and associated costs.

 

I will also register to vote in MT when I go for the DL in Missoula. What if anything am I missing here?

 

Under this scenario, I see no reason to pay the $1000 set up costs for an LLC and the yearly maintenance fees.

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I will also register to vote in MT when I go for the DL in Missoula. What if anything am I missing here?

 

Under this scenario, I see no reason to pay the $1000 set up costs for an LLC and the yearly maintenance fees.

If you domicile in MT, I don't see why you would want an LLC there but the question is, what will you be using for an address to register your RV and on your driving license? As far as I know, MT does not accept a mail service address.

Good travelin !...............Kirk

Full-time 11+ years...... Now seasonal travelers.
Kirk & Pam's Great RV Adventure

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Just for the record, LLC = Legal Liability Company not Corporation.

 

See HERE

Clay(WA5NMR), Lee(Wife), Katie & Kelli (cats)
Full timed for eleven years in our 2004 Winnebago Sightseer 35N Workhorse chassis. Snowbirds for 1 year. Now settled down in western CO.
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A LLC is a seperate legal entity that can have its own domicile different from its shareholder. If you form a MT LLC it's domicile is in MT. Your individual domicile can be MT or any other state. The motor home would be registered and owned by the LLC in MT and not be subject to sales tax. You are not evading taxes since you don't own the motor home. The courts have ruled that although it is illegal to evade taxes it is perfectly fine to avoid taxes.

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thanks for all the input... Kirk's point about the MT-DMV accepting a mail service company's address does give me pause. I have a relative in MT that "might" allow me to use their address just for the purpose of getting the license. I'm waiting for their response now.

 

But practically speaking how would the DMV keep track of all the mail forwarding companies in the state? They come and go pretty regularly. Would they keep a big database to be checked whenever a new license is issued? I doubt this would be something they could deal with an an effective way for every new application for a DL.

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But practically speaking how would the DMV keep track of all the mail forwarding companies in the state? They come and go pretty regularly. Would they keep a big database to be checked whenever a new license is issued? I doubt this would be something they could deal with an an effective way for every new application for a DL.

Actually it is very easy and is done by financial companies, insurance companies, and many others as a part of everyday business. With the ready access to computers that can do an address search, in only a few seconds they can verify if an address is for a private home of a business and they will do so. I'd be very surprised if there is a DMV anywhere which does not verify addresses. Yes, they will know.

Good travelin !...............Kirk

Full-time 11+ years...... Now seasonal travelers.
Kirk & Pam's Great RV Adventure

            images?q=tbn:ANd9GcQqFswi_bvvojaMvanTWAI

 

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you got me there Kirk. I think I just solved my problem by talking with my cousin who lives near Missoula. She is letting me use her physical address for getting my DL and correspondence from the DMV. I hope that is sufficient for the DMV. Oregon requires some corporate or governmental document be received at your in-state address and presented to them as proof of residence.

 

I will call the MT-DMV tomorrow to see what proof of residence they require. I hope all they have to do is check that I have a valid address as you said.

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No reason why that should not work, unless they ask for something like a utility bill in your name, as some states do. I don't recall ever hearing much about that issue so let us know here what you find out.

Good travelin !...............Kirk

Full-time 11+ years...... Now seasonal travelers.
Kirk & Pam's Great RV Adventure

            images?q=tbn:ANd9GcQqFswi_bvvojaMvanTWAI

 

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