Forming LLC in Montanna

[Big5er]

36 minutes ago, docj said:

Again, I repeat that if there exists a legal means to reduce one's taxes then why wouldn't one want to use it?  I sure would.   I agree that it's morally wrong to evade taxes, but taking advantage of "loopholes" isn't tax evasion, just smart management of one's money IMO.

I never said it was illegal, I said it was morally wrong. So you are saying that pedophiles should just go to Africa where, in some places,  the age of consent is 12 or 13 and sex with children is legal? That's not abuse it's just a loophole, right?

Just because something is legal doesn't make it "right". 

Consent by age[edit]

Age	Countries (links are to sections on this page)
12	Angola
13	Burkina Faso, Comoros, Niger, Sahrawi Arab Democratic Republic

[Al F]

If one is going to declare setting up an LLC in Montana to be morally wrong the I truly believe they should condemn those residents of NY and CA who's only reason for selecting TX or FL as their domicile to avoid paying the high taxes in their original states.  There is no reason I can think of, that they couldn't set up mail forwarding in NY, CA or other high tax states.  

I would also add that those living in a state with a sales tax, shopping online and buying something from a place they don't pay sales tax, then they should be morally obligated to total all the things they buy, they didn't pay sales tax on and each year send a check for the sales tax to the state.  After all you are AVOIDING  paying the tax to your state for items you bought, just like the RV and Montana. 

I could also make an argument that those who feel strongly about avoiding taxes being morally wrong could voluntarily send a check to the federal government for the standard deduction (or itemized deduction) and the personal exemption on our federal income taxes as well.  These are both legally allowed tax avoidance or tax reduction items. 

Granted the last is a stretch, but it is sill tax avoidance. 

One last addition about the Montana LLC there are some states which have take their residents to court and forced them to pay very significant fines and penalties when they set up a Montana LLC for their RV and garaged the RV in their state of domicile.   Now that I consider to be morally wrong to set up the LLC and then garage it and use it in your state of domicile.

[Twotoes]

If you form a Montana LLC then YOU are not purchasing an RV your LLC is purchasing the RV. You will still be domicled in TX. The RV will be registered to the LLC in MT a state that does not charge sales tax. You and your LLC have violated no tax laws. 

[Mark and Dale Bruss]

2 hours ago, Twotoes said:

If you form a Montana LLC then YOU are not purchasing an RV your LLC is purchasing the RV. You will still be domicled in TX. The RV will be registered to the LLC in MT a state that does not charge sales tax. You and your LLC have violated no tax laws. 

If the RV is "garaged" in another state, the state doesn't care who owns the vehicle.  The RV has to be registered in that state.  And when the registration is applied for, the state may have its say on whether an assessment is due or not.

[Kirk W]

3 hours ago, Mark and Dale Bruss said:

If the RV is "garaged" in another state, the state doesn't care who owns the vehicle.  The RV has to be registered in that state.

That pretty much sums it up but every state has their own definition of the term "garaged" and that is where you could run into problems if you keep your LLC registered RV in the wrong state for too long. I have seen repeated reports of both CA and CO pursuing legal action against residents who use a Montana LLC when the RV registered that way is kept in their states too long. I have heard that such has happened in other states as well, but only those two have I actually seen news reports of it. I was told by an attorney working in the field that TX, FL, & SD have never taken such actions unless the owners stop traveling and the RV stays parked in the state. The last that I knew, Bennett Law Office will tell you of those types of issues with whatever state you are domiciled in and advise you accordingly. There may be others who do so also, but they are the one that I have experience with and I know 2 or 3 others who have. As I said previously, Bennett advised me against forming an LLC. 

[Little]

Having vehicles registered to LLC has other benefits. It can limit your personal liability in some cases. Trucking companies will register in lower tax states, but their equipment generally rotates in/out of state regularly. We have all vehicles registered to LLC.  but that's a personal choice, for tax. liability and estate planning. Bennets should be able to advise better than a public forum. Remember that it costs $ to maintain an LLC, added to the initial setup. Interesting topic. Mark

[Big5er]

Driving a "company" (LLC) owned motor home would seem to be in violation FMCSR's meaning that you would need a USDOT number and a CDL if applicable for your size of vehicle. It is hard to deny "corporate sponsorship" when the vehicle is owned by the company for usage by it's "employees". 

Quote

Question 21:
Does the exemption in §390.3(f)(3) for the "occasional transportation of personal property by individuals not for compensation nor in the furtherance of a commercial enterprise" apply to persons who occasionally use CMVs to transport cars, boats, horses, etc., to races, tournaments, shows or similar events, even if prize money is offered at these events?

Guidance: The exemption would apply to this kind of transportation, provided: (1) The underlying activities are not undertaken for profit, i.e., (a) prize money is declared as ordinary income for tax purposes, and (b) the cost of the underlying activities is not deducted as a business expense for tax purposes; and, where relevant; (2) corporate sponsorship is not involved. Drivers must confer with their State of licensure to determine the licensing provisions to which they are subject.

[bigjim]

I find Big5er's latest point much better and more relevent than the one about pedophiles. In fact I really like it.  The big issue is assumeing he is correct how do you control it except after the fact.

[TheLongWayHome]

1 hour ago, Big5er said:

Driving a "company" (LLC) owned motor home would seem to be in violation FMCSR's meaning that you would need a USDOT number and a CDL if applicable for your size of vehicle. It is hard to deny "corporate sponsorship" when the vehicle is owned by the company for usage by it's "employees". 

Phil,

I'll hook you up with a good lawyer!

"Corporate sponsorship" in an event, the stated question (21) has absolutely no connection with LLC ownership. One is relative to the event and the participation in it and other is relative to a LLC asset. A good lawyer and a judge would throw this out in 10 seconds.

 

 

[Big5er]

33 minutes ago, TheLongWayHome said:

A good lawyer and a judge would throw this out in 10 seconds.

 

You don't wanna meet my judge then.

 And even if your "good lawyer" (no such thing, IMHO) can get it thrown out, that would be at least 30 days later at a court hearing. I hope you weren't just passing through town. And actually my court is running about 30 days behind so you are looking at at least one reset. I had one racer show up 3 times just to get reset to a 4th date. Every time he had his title in hand, screaming "It's an RV". In the end, it got him nowhere with my judge. 

Check the definition of "commercial motor vehicle": Commercial motor vehicle means any self-propelled or towed motor vehicle used on a highway in interstate commerce to transport passengers or property when the vehicle
(1) Has a gross vehicle weight rating or gross combination weight rating, or gross vehicle weight or gross combination weight, of 4,536 kg (10,001 pounds) or more, whichever is greater; or

And the definition of "commerce": Commerce means
(1) Any trade, traffic or transportation within the jurisdiction of the United States between a place in a State and a place outside of such State, including a place outside of the United States,

It's a "company" vehicle..being used in "commerce".  RV's are exempt when used for personal use. How can your LLC, a company, allow employees to use the RV without it being a job perk? It certainly isn't just because your company likes you, well actually it is, but it is still income for you, being able to use the company vehicle. I have to sign paperwork swearing that my county owned vehicle is used strictly for law enforcement use and that I am subject to emergency call or I would have to pay federal income tax for the mileage I use it driving to and from work. The federal government says usage of a company vehicle is taxable income. That sounds like a commercial enterprise to me. 

I bet I could keep your "good lawyer" employed for your whole summer. 

[Kirk W]

17 minutes ago, Big5er said:

And actually my court is running about 30 days behind so you are looking at at least one reset.

1

You are a judge now?

[Big5er]

2 minutes ago, Kirk Wood said:

You are a judge now?

I think you already know what I do for a living Kirk. We have had that conversation before. I'll stop there, lest you complain on me again. 

[Kirk W]

20 minutes ago, Big5er said:

I think you already know what I do for a living Kirk.

Just wondered if you had changed positions. Local magistrates can come from any walk of life so the court comment made me wonder. 

[docj]

12 hours ago, Big5er said:

Driving a "company" (LLC) owned motor home would seem to be in violation FMCSR's meaning that you would need a USDOT number and a CDL if applicable for your size of vehicle. It is hard to deny "corporate sponsorship" when the vehicle is owned by the company for usage by it's "employees". 

There's a big difference between a physical object being owned by a business entity and that same object being used in the furtherance of that business.  According to what I read, there are hundreds of luxury condos in NYC owned by off-shore LLC's, but unless they are rented to others their ownership doesn't make them commercial properties.

This is a reasonable question, and is almost always asked.  FWIW, the owners of an LLC aren't it's employees, they are called "Members"

[Kirk W]

46 minutes ago, docj said:

According to what I read, there are hundreds of luxury condos in NYC owned by off-shore LLC's, but unless they are rented to others their ownership doesn't make them commercial properties.

I don't know about condos, but it is true of luxury cars, according to the Bozeman Daily Chronical, Jan. 22, 2017 issue.

Out-of-state car buyers use Montana LLC’s to evade taxes

[Little]

12 hours ago, Big5er said:

You don't wanna meet my judge then.

 And even if your "good lawyer" (no such thing, IMHO) can get it thrown out, that would be at least 30 days later at a court hearing. I hope you weren't just passing through town. And actually my court is running about 30 days behind so you are looking at at least one reset. I had one racer show up 3 times just to get reset to a 4th date. Every time he had his title in hand, screaming "It's an RV". In the end, it got him nowhere with my judge. 

Check the definition of "commercial motor vehicle": Commercial motor vehicle means any self-propelled or towed motor vehicle used on a highway in interstate commerce to transport passengers or property when the vehicle
(1) Has a gross vehicle weight rating or gross combination weight rating, or gross vehicle weight or gross combination weight, of 4,536 kg (10,001 pounds) or more, whichever is greater; or

And the definition of "commerce": Commerce means
(1) Any trade, traffic or transportation within the jurisdiction of the United States between a place in a State and a place outside of such State, including a place outside of the United States,

It's a "company" vehicle..being used in "commerce".  RV's are exempt when used for personal use. How can your LLC, a company, allow employees to use the RV without it being a job perk? It certainly isn't just because your company likes you, well actually it is, but it is still income for you, being able to use the company vehicle. I have to sign paperwork swearing that my county owned vehicle is used strictly for law enforcement use and that I am subject to emergency call or I would have to pay federal income tax for the mileage I use it driving to and from work. The federal government says usage of a company vehicle is taxable income. That sounds like a commercial enterprise to me. 

I bet I could keep your "good lawyer" employed for your whole summer. 

Attitude like this is a major contributor to the poor view general public has of law enforcement. You use your interpretation of the law and the system to impose your views on others.

"keep around for 30 days" 

Whether or not the federal gov't  considers something taxable has jack to do with this.

All LLC's are not used for commerce. Some are holding company's only and do not generate revenue.

Your arrogance really comes thru in your last sentence.   WOW

[Big5er]

7 hours ago, docj said:

 According to what I read, there are hundreds of luxury condos in NYC owned by off-shore LLC's, but unless they are rented to others their ownership doesn't make them commercial properties.

We are talking commercial motor vehicles. The FMCSR's do not cover condos...only vehicles. You aren't even comparing apples to oranges, you are comparing apples to sirloin. 

6 hours ago, Kirk Wood said:

I don't know about condos, but it is true of luxury cars, according to the Bozeman Daily Chronical, Jan. 22, 2017 issue.

Out-of-state car buyers use Montana LLC’s to evade taxes

And I agree with the court 100% Kirk. The "company" owns that vehicle. At least you are comparing vehicles to vehicles, the only problem here is that your luxury car doesn't meet the definition of a "commercial" motor vehicle.....see my post above for that definition.

5 hours ago, Little said:

Attitude like this is a major contributor to the poor view general public has of law enforcement. You use your interpretation of the law and the system to impose your views on others.

Whether or not the federal gov't  considers something taxable has jack to do with this.

All LLC's are not used for commerce. Some are holding company's only and do not generate revenue.

Your arrogance really comes thru in your last sentence.   WOW

It isn't the usage of the LLC that matters here, it is the usage of the vehicle. The fact that the Federal Government says it should be taxed is simply one more block to build the case for my interpretation. No one says a commercial vehicle has to make money to be commercial. Nowhere in the definition of "commerce" is revenue ever mentioned. And in case you missed out on this, imposing my interpretation is my job. The good lawyers get to explain your interpretation and the judges gets to decide who is right. 

I would say I am sorry that you don't like my attitude, but I'm not. This topic has been hashed out here, ad nauseum, and nothing has changed. If you had been here any length of time you would already know that. It is sort of like the people that say your HDT is overkill, unnecessary, a waste of money, etc. You will never tire of talking about it to the right people but eventually you will tire of defending it to certain people. 

And I was only stating facts...even "good" lawyers have to work.  The LLC crowd wants to save money and avoid taxes (perfectly legal in some states). They think that tax avoidance is all that matters and that the issue is done (it isn't, obviously) and they want to convince themselves (and others) that they are right. Meanwhile I get paid to enforce the federal commercial vehicle regs and write the tickets, those "good" lawyers get paid to argue their side of the case, the prosecutor gets paid to argue his and my interpretation, the judge gets paid to make the decisions and the people with that LLC  "saved" some tax money.  Seems everyone should be happy, right?

And the fact that the courts are backed up is not my fault, it is just another fact of life. I get paid for 40 hours a week, no matter what I am doing. So does the prosecutor and the judge. The ones making money here are those "good" lawyers that drag the cases out time and time again, since the longer it takes, the more they make. 

[docj]

This thread is at the point where a smart moderator should close it.  The use of MT LLC's for the purchase of RV's, luxury cars, boats and even airplanes is a well-established practice.  Anyone has the right to disapprove of such tax practices and, therefore, they can decide not to employ them.  Their opinions will have little or no effect on those that choose to use this approach nor will it have any impact on the legality of such tax avoidance structures.  Continued discussion here is of no benefit IMO.