[Peter]

I had heard about Montana registrations, and the advantages, for many years, when I owned motorhomes. When I bought my bus, I did some research on creating a Montana LLC and registering the bus in that state. I am a Florida resident.

Here is why I did not do it, in order of importance:

1. It constitutes sales tax evasion, no matter how you spin it, and even if you get away with it. Sales tax evasion is a crime in Florida. The Florida Department of Revenue, who collects sales tax and a lot of other blood money, is known to be aggressive and efficient in its collection practices. The FDOR is often compared to the Internal Revenue Service, with the IRS chosen as the more reasonable agency.

2. Florida law requires that all motor vehicles that are garaged in the state be registered with the Florida DMV and bear Florida license plates. This law is routinely ignored by yankees who move to Florida and don’t want to pay fees associated with registering their vehicles. I have a personal friend that was stopped for a traffic violation in his vehicle bearing Indiana plates, and he got ticketed for failing to register the vehicle in Florida. It was expensive.

3. Since I retired from the porn industry and have no desire to resume my professional wrestling career, i need to remain a member of the Florida Bar. If I am charged with a crime, the Bar will automatically investigate the matter, and discipline will be forthcoming.

4. Financing for a bus registered to an LLC was more expensive (higher interest rate) and available only for relatively short terms.

5. Although I did not investigate insurance, I had read that the market for a LLC registered bus was very limited.

I paid a pile of sales tax, and it sucked. However, I was able to deduct the tax paid on my Federal return. That made me feel a little better, but it still sucked.

[Andy]

Tom…

I am not interested in a debate on this but in Texas, it is true just like anywhere else, if a motorcoach and car have different state license plates, it simply raises the bar as to possible evasions of state fees or taxes. In Texas, if a motorcoach is “stopped” for whatever reason… the State Trooper has several questions that will be asked of the motorcoach driver. You could anticipate these very easily.

Remembering that the Trooper is an officer of the court and lying to an officer of the court can be construed as obstruction of justice… the following line of questioning can and does occur..in varying forms..

Sir… may I see your license and insurance information? (In Texas, registration is not requested)

Sir… I note that you are a rsident of the State of Texas…. is that correct? (the answers being yes!)

Sir…Is this your motorcoach?

Sir… I note it has an out of State license and an out of State address for the insurance? How long have you been in the State with the coach? (This is a very valid question because the Trooper is seeking to ascertain a specific bit of information..(.he already now knows the owner is a resident of Texas)

Sir… Where do you domincile the motorcoach? (The answer to this question is very, very important)

Sir… Do you have a receipt for the place of domicile? out of State? In State?

It is at this point that the attorneys among us will go absolutely nuts…. I get it…. so let me explain that this process I am presenting may not be the exact line of questioning ….they are better than I have presented here….but you get the idea that the owner of the coach, if in fact the coach is domiciled in Texas, is now feeling the heat… and it would seem smart to not create any further issues ….

Every State has its own statutes and procedures… whether or not the “Trooper” had proper cause to stop the motorcoach can always be argued…trust me, they will find a reason…but if so… the issue at hand is still germane…

Think on this… a coach costing $300M to $800M has a road use fee of between $19,000 / $24,000 on the $300M coach and $48M / $64M on the $800M coach depending on 6.25% road use fees or 8.25% sales taxes. These numbers are large and in court, they are very serious numbers plus interest and penalties.

Food for thought… presented in the spirit of a good discussion again…

Pres

[Dick]

Tom…

I know that there were citations issued to some folks… I have no idea for what but rumors were it was a huge big deal…along with hefty fines… they were trying to “crack” down on the issue.

I think Pres gave a pretty good outline of how it goes.

I personally would be embarassed to have Montana tags on my Texas coach… when we bought the coach it did have Montana tags which we immediately changed to Texas tags.

I would think “anyone” who can afford a Prevost and the maintenance that goes with it can afford to pay the taxes on it… Law school or not !!

Cheers, Diane

[Jerry]

So how might it play out for non-domiciles? I suppose I will need some sort of home location for insurance purposes, but that could be Montana? The other possible issue I can think of is garaging. At the moment, I am (theoretically) thinking of TN as being the most convenient for me. Insurance may be higher as well, we’ll have to see. Finance won’t be an issue though.

[Chas]

I’ll let people more learned than me debate this, but it is my opinion a MT LLc is solely for tax evasion. Not avoidance which is legal, but evasion which is not.

In the early 90’s we were at a Prevost Prouds pre-FMCA convention rally and folks were using states like Oregon and Nevada to avoid the high sales taxes imposed by CA. One member of the Prouds, on his way to the rally was facing the need to pay the sales taxes, plus interest, plus a very expensive fine because he was stopped and it was determined his out of state plates were illegal. He was pissed, but he drew attention to himself. His toad and his driver license were California, but the coach was (I think) Nevada.

That played a big part in forming my opinion regarding MT LLc solely to beat the sales tax.

[Peter]

Back in the late 1980’s a friend of mine was a nationally known short-track stock car racer from Wisconsin. He raced and won four to six times a week all over the country. One day the Wisconsin Dept of Revenue came calling and performed a sales tax/use tax audit on him and his racing business. Use tax in Wisconsin is like sales tax to be paid by the Wisconsin taxpayer on something bought out of state. The DOR when through every receipt, his schedule, his winnings, etc. with a fine tooth comb. As an example they said, “You spent $800 on race tires in Georgia, but didn’t pay Wisconsin use tax on them, you owe the tax, interest, and penalties.” But those tires weren’t used in Wisconsin, they were used up in Georgia and Alabama so they were exempt from Wisconsin use tax because they weren’t used in Wisconsin. But the DOR presumed that ANYTHING bought out of state without Wisc sales or use tax was used in Wisconsin. My friend had to PROVE that he didn’t use the stuff in Wisconsin, or he was liable for the use tax, interest, and penalties. Needless to say, the audit was extensive, very time consuming, exhausting, and expensive. He finally settled with the Wisc DOR and was able to keep racing.

Why do I tell the story? Because of what happened next. The Wisconsin DOR grabbed the race results for all American Speed Association (ASA), ARTGO, All-Pro, and World of Outlaws series, looked for drivers and car owners from Wisconsin who had run out of state, and created a “hit list” that they methodically moved through.

Once the DOR realized there could be “found tax revenue”, their strategy was to exploit this industry.

A Wisconsin bank I worked at had a similar issue with “use tax” and an audit. Went to a bank conference and discovered we had not been singled out … all the banks were getting “use tax” audits on seemingly obscure expenditures which could have been subject to “use tax”.

Once the tax guys smell possible unpaid taxes … they bite in like a bulldog and don’t release.

[Chas]

This is all about risk versus reward.

Guys using the MT registration as a means of avoiding their state’s sales or use tax can claim what they are doing is legal and good for them if that belief helps them sleep at night. But the bottom line is they assume the risk they will not be stopped, auditied or otherwise be found to have no legitimate reason for the MT registration except tax evasion. The numbers are clearly in favor of the risk takers. Very few are actually caught.

I don’t have the guts to do it and it cost me a lot of money registering 3 coaches in states with punishing sales taxes.

[Dean]

OK, thanks all for your thoughts.

We beat it to death…..He will register the Newmar in Ohio and that is the end of it.

[Archived]

Good call, Marius. Everyone on this site can afford the tax and registration in their own state. Just pay it.