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Sales Tax/Coach Licensing
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As far as going through the Agriculture check point when entering Californication, I usually have a plastic shopping bag (just to tick off the Cali-greenies) with a banana, a couple of apples, an orange and usually a little lettuce. When I pull up, I open the toll window and hand them the bag and ask them how they are doing. They usually look in the bag, toss it into the waste receptical beside them and tell me to drive carefully and have a great day. I have never had one do a secondary when I do this. If they did do a secondary, I would be in big trouble and would put on an act by yelling at my wife for not getting ALL the fruit out of the ‘fridge. Seeing the big bad old man picking on the little fragile woman (who could kick my butt any day) for violating the law should turn their heart of stone into jelly.
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Since 91 or 92 the CA leo’s have been aware of tax evaders (not tax avoiders) and I am going to presume they really know the clues to look for. The opportunity to vacuum someones wallet and bank account ramps up significantly because there are so many laws being broken or skirted.
If the bus is in an LLC that makes it a commercial vehicle. An LLC owned coach is not a private coach so a cop can make a good case for not only the driver needing a commercial CDL, but he can pursue the path that says as a commercial vehicle it needs inspections, and all the other regulatory obligations imposed on commercial vehicles.
A while back VA was going after owners of high end RVs with MT registrations and were stopping at homes where these RVs were kept. I presume jealous neighbors were accounting for most of the visits, but just parking one next to the house was a likely reason for their visit. VA was not only getting cheated out of their rather hefty registration fees, they were losing the sales tax they were entitled to. It was my understanding the penalties were substantial when folks were caught
The real pot of gold for the various states is recovering the sales taxes they would have received, plus whatever penalties and interest they were entitled to. Very tempting to avoid the payment of sales taxes upon the purchase of a coach, but when states get pinched by budget shortfalls they can and will get very creative as to how they can reach into our pockets and recover their money.
A MT LLC is a very attractive alternate to the payment of sales taxes, but the risks scare me more than the potential rewards entice me. I think it is foolhardy to assume you can beat the odds. Just like mail order companies make a lot of money selling their mailing lists to competitors, I wonder how long it will be before the law firms that set up the LLCs for the purposes of tax evasion add to their income by selling the names and addresses of folks whose Prevosts and Monaco Signatures got registered in MT to states that are hard up? Not that a lawyer would ever do that….
Hmmmmm……..I see that as a business opportunity.
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Hi Jon;
A coach owned and registered
to an LLC is not a CMV by legal definition as long as the coach is for personal
use only and not used in furtherance of business activities.While a state DOT inspector
could decide on the side of the road that an LLC registered coach is a CMV and begin
a ticket writing party it is unlikely the state would prevail in court. Of course the cost to the LLC will likely be
some attorney fees while everything is sorted out. IMHO, this scenario is unlikely unless the coach has some sort of
commercial looking graphic and the driver/occupants insist on playing obnoxious
lawyer on the side of the road.The successful use of a
Montana LLC for tax avoidance depends upon all the details. Also remember that what is legal tax
avoidance today could become impermissible at a later date due to changes in
your personal situation or changes in the law.Bennett
Law firm in Missoula, MT, pioneered the use of a Montana LLC to legally avoid sales
taxes and high registration fees.
Anyone considering a Montana LLC would be wise to consult their personal
attorney and Bennett. -
I know for a fact that most cops are aware of the MT LLC here in TX and in LA … when ever there is an FMCA Rally or a lot of RV traffic they will specifically check for the MT plates then check the license plate on the tow car… my advice is… if you want don’t want to pay your due taxes in your home state then you need to register your vehicle in Montana and get a Montana drivers license…. that way you will at least look legal won’t be stopped for that reason.
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An LLC is a limited liability corporation. It is a business. Tax evaders may not treat it like a business, but it is. If a business owns a Prevost it is hardly a stretch to assume that Prevost has a business use. The IRS makes it pretty clear that if a business I owned owned a plane (or a bus or a yacht) and I used the plane for personal use I had to treat that use as income, or show how I compensated the business for my personal use of the business asset.
All of that to my non qualified brain suggests to me that an LLC owned Prevost is not only not personally owned or private, but is a huge potential liability if an owner becomes a target of a tax agency.
Does the LLC have to file a federal tax return? Does it pay state franchise tax fees?, if so I would think a person wishing to evade taxes might want to consider getting a personal mailing address in MT, with all mail being forwarded to where ever home is. Follow that up with a driver license from MT, then register the toad in MT. At that point the Prevost owner is probably bullet proof unless someone wants to really dig deep.
An apartment owner in MT that is willing to allow the use of his address, and provides a mail forwarding service is abetting tax evaders, but if they do it right by getting MT plates for the toad and an MT driver license an out of state LEO would have a hard time proving that was not your legitimate primary or second home.
My point is going the LLC route may offer some benefits at the exposure of a small risk, but there might be a cleaner and more advantageous way, still with risk, probably just as illegal, but less obvious in a traffic stop.
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Jon,
In reviewing the many comments on this subject, I have a particular interest in this and have followed this for a long time, personally. In Texas, according to the Office of the Comptroller of the State of Texas, (Susan Combs), if a motor coach owned by a Texas resident is brought into the State for a period of 30 days, it must be registered in Texas. There are no exceptions. If the owner is stopped for whatever reason, and the owner has a Texas driver’s license, with an out of state tag on the coach, the Trooper has a series of sequential questions designed to determine the location of permanent domicile for the coach as well as other inquiries. They take the conversation from there.
In Texas, as has been stated before in an earlier comment, this is a road use “fee” issue… it is not necessarily a sales tax issue but the road use is derived from the same pie…
It is further true that this is not a really great priority for enforcement ….yet, make no mistake, Texas has had conversations with Montana authorities because I have been a part of them… The authorities monitoring the Montana LLC’s have been made well aware of the distaste Texas has for those who help cheat our State.
When I was actively working on this 24 months ago, there had been at least two persons in Florida fined over $200M for back taxes (use) fees….one of the persons was caught and paid the back taxes and penalties on the coach he currently owned and the State also went back and fined him for the previous coach he had owned… at least, that is the story as I uunderstand it…
The basics: A very, very good friend just bought a brand new coach at a cost of $1.4 million… he paid no tax through a Montana LLC and had it delivered to Houston… If he is caught, he will owe the initial $90,000 plus penalties and interest….When you think about it, I don’t really get it… It just can never be worth it.
Pres
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John has some interesting points. One thing comes to mind that was relayed to me by an attorney friend of mine. He indicated that if stopped for any reason; while walking or driving, in a car or Coach offer no response to questions of a police officer or State trooper. He stated most people incriminate themselves by trying to answer questions of law enforcement. The officers are trained to ask questions that will get your to incriminate yourself. They are very good at getting you to answer. You are not under any obligation to answer any of their quesitons. Let an attorney representing you do this for you. Obey all of their requests; do as they ask you to do and do not resist arrest no matter how outrageous it is, there will be plenty of time to get that cleared up to your satisfaction; but do not resist arrest, nothing come good from that. But, on the other hand do not offer any information that can and will be used against you in a court of law. Simply answer any question with “am I under arrest?, followed by “Am I free to go”. On every question asked of you respond with these two utterances. They can not get you for information you do not provide. They can not force you to respond to their questions. This is particularly true if you have had a cocktail in a social outing and get stopped while driving. Just because you have been drinking you are not guilty of anything; but if an officer inquired how many have you had tonight?, and you answer only one, you have not only admited that you have been drinking but how many drinks and he will go much further in his investigation. Offer no information. I am a law and order kind of guy but I also want fairness. I hate when good people get tricked into arrest through voluntary responses made innocently. I hope this post is of benefit and will not offend anyone.
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Good post and good advice Michael.
I presume we are obligated to produce a license and registration and probably an insurance card, but you make it clear we are under no obligation to talk.
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No offense here, good post. I have Law Enforcement experience like others here on PC and I just have a hard time with the concept of being stopped because I have Montana plates and something different on the toad. Like I mentioned before, what vehicle law has been broken? My bus is properly registered and insured as my toad. Show me the code that says that is illegal.
What say you other Law Enforement guys?
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I run a Ga Dealer tag on my toad, and a regular tag on the bus.
Never had an issue.
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Tom,
I think I can answer that with some speculation. As a LEO it is doubtful tax collection is your job, but dealing with moronic drivers probably falls squarely in the middle of your responsibilities. So you see a Prevost driver speeding, tailgating, or otherwise driving foolishly and you light him up.
As soon as you greet him you are confronted with attitude.
Is it difficult to see what is going to follow that encounter?
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I run a florida tag on the bus and a virginia tag on the toad, When I moved to Virginia a couple years ago I ask the tax officer where do I register my coach she asked where is it on Jan first of every year, I said it is in florida, she said register the bus in Florida that is what I did. So I have Florida tags on the bus and Virginia tags on the toad, as per those instructions, Have not been stopped yet, maybe just lucky but I have not broken any laws by having the bus and toad registered in different states, Gary
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I think everyone should do whatever they want to…. just don’t bitch if you get caught !
Happy New Year everyone and safe travels !!!
Diane
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Actually if someone does get caught it would help everyone if it was reported so others knew of the circumstances. I agree with Tom that few if any highway police officers care what state the RV is registered in so when someone does get caught it would help everyone understand the risks or what could be done to eliminate the risks.
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My two cents.
Avoidance is legal.
Evasion is illegal.
It varies by state.
Selling mailing lists: The state of Montana law does not require the registered agent to share the names of the owners of the LLC, so they don’t. The state’s information trail ends with the registered agent.
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