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Tax Evasion


freestoneangler

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I know, it sounds bad, but how would you play this hand? We currently live in WA and are in the market for a Class A. We'll likely end up paying $50K (before tax) on a coach having the features we want. We will be moving to MT in 2016 (currently own property there and will be building this year). I'm going to go on the record and say I'm not a fan of taxes... particularly what I feel are excessive ones like vehicles being taxed over and over until they get scrapped.

 

For that reason, we're hesitant to buy a coach in WA and give them another $5K of our money. We may just wait until we're in MT to buy one (they have no sales tax), but I'm wondering what other options we might have. Has anyone on the forum been in a similar situation and found a legal option to avoid paying sales tax on an RV to the state their about to leave?

 

Also, any MT residents who have purchased a rig in another state and brought back to register in MT? My understanding is that you only pay to the state the rig will be registered in... is that true?

 

Thanks

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About the only way around paying WA taxes that is legal would be to buy it outside of WA and title it to your MT address (assuming that you have one) and then register it there and store it there when not in use as well. If you buy it in WA and have an address in WA, I doubt that you will get away without paying their taxes. If you don't have an address in MT then you could go the LLC route but it will cost you a few bucks and you will still need to keep it out of WA as long as you are a resident there.

 

Of course you could also wait to buy it until you have left the state and so would not be subject to WA taxes. Even then, you will probably need to buy in another state.

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About the only way around paying WA taxes that is legal would be to buy it outside of WA and title it to your MT address (assuming that you have one) and then register it there and store it there when not in use as well. If you buy it in WA and have an address in WA, I doubt that you will get away without paying their taxes. If you don't have an address in MT then you could go the LLC route but it will cost you a few bucks and you will still need to keep it out of WA as long as you are a resident there.

 

Of course you could also wait to buy it until you have left the state and so would not be subject to WA taxes. Even then, you will probably need to buy in another state.

Hi Kirk,

We do have an address for the property in MT... I should hope the one listed on the property tax form will suffice :D. My concern was that we are not yet MT state residents and wasn't sure if I could register the coach there until that time? Are you saying that WA would collect the taxes simply because we are residents here? How would that be different if I purchased a coach from CA, who also has a sales tax, and told them I was going to register in MT?

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You can register and store a vehicle in another state - it is garaged there. WA will not collect sales tax UNLESS you are bringing it into the state. As long as you keep it in MT (or wherever) not a problem. Lots of people who spend winters in Florida, Texas, or Arizona purchase, title/register there and leave the car at their park model during the summer. It is always where it is garaged.

 

What you are asking about is tax avoidance, not tax evasion.

 

Barb

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Another consideration is Insurance on the vehicle ? If you have a large claim, Insurance company would love to have an " out " ie. Vehicle not properly registered / licenced. Why don't you check with WA DMV to see if there is someway to get your tax refunded when you move.

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You can register and store a vehicle in another state - it is garaged there.

 

I suggest you check with the Montana DMV before assuming that you can register your rig in MT if you are still an out of state resident. I ran into problems trying to do that in Ohio. It seems to be something that varies state to state.

 

We went the MT LLC route, using the highly reccomended Bennett Law firm. I forget the actual cost, but I think it was close to a grand plus registration fees and then there is an annual fee. There are cheaper more do it yourself options that I was not willing to risk though. For a $50K purchase, I would not go that route, particularly when you are going to be legitimate MT residents anyhow. I would try to postpone the purchase until you are MT residents if you can't register it there as non-resident landowners.

 

Jim

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If you actually have a residence (a house, a trailer, etc) in MT then you ought to be able to register the vehicle at that address IF you don't keep it in WA any more days than the State permits. Rich folks, with homes in different states, don't have any problems owning vehicles in multiple locations, Just remember Mitt Romney and the "several" Cadillacs his wife drove.

 

The problem is that WA and MT are essentially next door to one another and the WA police have been sensitized to the issue of MT LLCs. They are going to be on the lookout for MT motorhomes spending a lot of time in WA. If you were to do this you would have to keep impeccable, contemporaneous records that could document where MH was every day of the year. When we were leaving MD and were buying a MH into our MT LLC I was careful to maintain documentation of every tank of fuel and every campground receipt for that first year so I could prove to MD, if necessary, that the vehicle had not been in the state for more than a handful of days. I was never asked, but I felt better having the documentation.

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Guest ticat900

A friend who works for the WA Department of Revenue he told me they actively go after Montana LLCs for RVs and other large purchases. Per WA law, it is tax evasion since the sales tax is a "use tax" and it is being "used" in Washington.

The way I understood things is if you have a Montana DL when your driving the MH they cant touch you?? anyone have opinion

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We do have an address for the property in MT... I should hope the one listed on the property tax form will suffice

So are you saying that you can receive mail there, as in the paperwork from the licensing office of MT? Or is the address just a physical location with no mail service? If you get mail there, then it should be sufficient.

 

My concern was that we are not yet MT state residents and wasn't sure if I could register the coach there until that time?

There are many people who own vehicles that are registered in a state other than the one that is their domicile. In general, the rule is that a vehicle should be registered and taxes paid in the state where it is garaged. Many folks with seasonal homes have a vehicle that is kept at that location and which is properly registered there, while they have a permanent residence/domicile in a different state and other vehicles there.

 

Are you saying that WA would collect the taxes simply because we are residents here?

What I am saying is that if you buy it in the state of WA and you have a driver's license with WA and your vehicle insurance is from WA, then you will have a very difficult time avoiding the dealer collecting the WA sales taxes as their business license requires them to do when selling to WA residents. To register in MT the easiest thing to do would be to buy the vehicle there where business licenses are from MT and are used to dealing with MT laws & taxes. But part of this is the the MT registered RV will need to stay in MT to be legal. No matter where you buy the RV, if you park it at your WA home, you could be in serious trouble with the WA tax collectors. Remember that you are a legal resident of WA and that is your domicile. What you are doing is attempting to avoid payment of WA taxes while you are a resident. The only way to legally avoid the payment of the WA sales tax is for the RV to not ever be in WA.

 

All this said, this is my understanding and the way that I read the laws, but I am not an attorney and have no law school education, so if you really intend to do this, I suggest that you get the advice of a WA attorney. Better to pay an attorney for advice than to pay him to defend you.

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Yes, our MT property has an address and I can set-up a PO Box in the town located to receive mail. Having to move the coach to MT and basically just store/garage it does us little good. I think we'll just wait and purchase after we re-locate. I don't like the idea of paying WA the sales tax even if we were intending to stay here... I like it even less knowing we won't be.

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Also, any MT residents who have purchased a rig in another state and brought back to register in MT? My understanding is that you only pay to the state the rig will be registered in... is that true?

 

Thanks

We've purchased four rvs (2 mhs & 2 fwls) from FL, OR, AL, & MO while MT residents. We paid no sales tax on any of them. The max registration & title charges for a mh or fwl in MT is $300. Any motorized road vehicle 11 yrs old or more can get a permanent tag for about double the yearly charge. All trailers and motorcycles get permanent tags. If your property does not have mail delivery, you can use a mail forwarding service as your legal address. We have 30 acres with a street address where we live all summer but still use the UPS Store for our legal address (drivers licenses, voter IDs, etc.). Since our property is improved agricultural, but has no fixed house on it, we pay about $180 property taxes each year.

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We are Arizona resedents selling our property in AZ and moving to Oregon later in the year. I have researched this very throughly and even visited the DMV in OR to ask questions about doing what you want to do. While MT laws will be different than OR I am sure there are similarites with the situation. I must first have a OR drivers license and that requires a street address that receives mail as they will not forward license to another address. Whe you have the drivers license you can bring the MH to the DMV for inspection. Since they do not have a sales tax in OR the DMV could care less about what you did in another state. When you buy the MH in another state you can buy a temporary 45 day license to drive it to the DMV. People will say you have to be there 6 months but that is to receive state benefits and not license.

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. If it works like California the salesman has to physically deliver the MH and take a picture of it with the new owner outside the state of California.Iam not sure where WA stands on that part.I also know it really pays to have a DL for the state the vehicle your driving is from

 

As far as I am aware, CA law is rather unique with respect to this point. We bought a new vehicle last January in TX from a local dealer and had it titled in SD. Nothing was paid to TX except the fee to issue temporary tags.

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Is ther something preventing you from changing you domicile to MT now? You could become official MT residents and still live in WA. Nothing illegal about owning property in multiple states. You would most likely lose you mortgage tax exemption on your WA property because it would no longer be your "primary" residence. You'd have to weigh that out against the sales tax savings.

Make sure you get MT licenses and all your vehicles registered there as well as voter registration.

Now for buying the RV you will need to check with the dealer you re buying it from. Some states will collect there own sales tax at point of sale. Others will defer to your "home" state which would be no tax in your new scenario. Of course if you buy in MT there is no question.

You will still be responsible for WA state income taxes, property taxes on WA property etc.

Disclaimer: I am not an attorney nor do I play one on TV so take the above for what it is worth.

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The OP is looking to not pay any state income taxes as WA has none for 2015 before moving to MT in 2016. So I am guessing he is not going to move his address to MT and their high state income tax in 2015. If you find a rig that you like buy it and take it to MT and leave it there. It's for a year? Do not put MT plates on it and drive it back even for a day into WA. If you have a WA DL and get caught driving it in WA with MT plates it is going to be expensive. You can have your cake but you might not be able to eat all of it for a year. There is nothing illegal about what you want to do, you just have to play the cards according to the rules of the game you are playing

 

Dennis

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Is ther something preventing you from changing you domicile to MT now? You could become official MT residents and still live in WA. Nothing illegal about owning property in multiple states.

You are correct that you can own property in more than one state and in fact, Freestoneangler already is one of those persons. But owning property in a second state does not make you exempt from the laws of the state in which you actually reside. I suspect that he may still be employed in WA, but he has already indicated that he lives and is domiciled in WA and you may not have two domiciles. You may only register to vote, hold a driver's license, and a number of other things from one state and all states require that if you live and work in the state you must also register your vehicles, get your driving license and pay taxes to that state.

 

In my opinion, he has already made the best choice of how to proceed.

 

Having to move the coach to MT and basically just store/garage it does us little good. I think we'll just wait and purchase after we re-locate.

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