A bunch of used r1 in Montana?

[hammick]

We have a home in Montana and all of our vehicle are registered there. No sales tax and no annual inspections. The yearly renewals are similar to other states. After 11 years you get permanent plates with no renewal fees. Montana allows an LLC to to register a vehicle which surprises me. That's why you see a lot of high dollar vehicles/RVs registered there. I think they should end that practice as people abuse it but Helena wants the revenue.

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[savethemanual]

The obnoxious YouTuber, WhistlinDiesel, was arrested recently for this. He purchased a Ferrari only to completely trash it.

 

[VandalSibs]

The obnoxious YouTuber, WhistlinDiesel, was arrested recently for this. He purchased a Ferrari only to completely trash it.

I hate it when people use quote marks like he does in the video title. It makes it seem like it's not tax evasion..... Which it absolutely is. It is continuing the trend of normalizing illegality.

 

[BigSkies]

I know some people in corporate law. Next time I get bored at a party, I'm going to start asking about legal nexus of a Montana LLC where all "operations" happen in a different state.

As an LLC, it has to be a legitimate business with revenue and income. So where are the corporate taxes paid? Running an LLC at a loss for long enough triggers profitability considerations and whether it's a hobby. You can't deduct losses if it's a hobby. "Sales" are coming from somewhere. What state do you owe sales tax in?

There are ways to legitimately reduce your tax liability. And real businesses may see value it taking advantage of this. But trying to pretend you're a business when you're not is the definition of fraud.

 

[hammick]

Personally. I report anyone in my neighborhood/city area to local and state authorities if I see them with Montana plates parking their vehicle locally. You don’t get to drive on our roads and not pay your fair share.

This is tax evasion. Enforcement is ramping up if only for the tight budget reasons.
BTW, just because you have a drivers license in MT it’s not difficult to determine if you live/work in other state.

So I'm retired and split time between Missouri and Montana. My R1S is registered in Montana. So if you were a neighbor of mine in Missouri you would report me? If my R1S was registered in Missouri and you were a neighbor of mine in Montana you would report me?

If I had a friend from Montana parked in front of my Missouri home you would report them?

If you answered yes to any of these questions you might be a Karen

 

[ksumnole]

So I'm retired and split time between Missouri and Montana. My R1S is registered in Montana. So if you were a neighbor of mine in Missouri you would report me? If my R1S was registered in Missouri and you were a neighbor of mine in Montana you would report me?

If I had a friend from Montana parked in front of my Missouri home you would report them?

If you answered yes to any of these questions you might be a Karen

Please, no need for insults. I don’t report friends I do report please for calling me Karen. Just to waste their time a bit.

 

[hammick]

Please, no need for insults. I don’t report friends I do report please for calling me Karen. Just to waste their time a bit.

I said "might". You need to watch the movie. It's hilarious.

 

[SwampNut]

BTW, just because you have a drivers license in MT it’s not difficult to determine if you live/work in other state.

Determine does not equal prove. Its exceedingly difficult, maybe impossible to prove, unless you're an idiot.

 

[SwampNut]

Montana allows an LLC to to register a vehicle which surprises me.

What state doesn't?

As an LLC, it has to be a legitimate business with revenue and income.

No. I'm a partner in a private Delaware LLC that's just a holding company. I assume everyone is aware that Delaware is a common place to Inc or LLC as protection without ever going to the state, or ever doing business there? The legal question is well settled on this.

 

[BigSkies]

What state doesn't?



No. I'm a partner in a private Delaware LLC that's just a holding company. I assume everyone is aware that Delaware is a common place to Inc or LLC as protection without ever going to the state, or ever doing business there? The legal question is well settled on this.

I did slightly misspeak. Apologies for that. I forgot about disregarded entities. LLC's can be set up as disregarded entities for tax purposes. There are still requirements for it to be an actual business, but that's murkier and outside my expertise.

The choice of venue for incorporation is important, but it doesn't have to do with taxes. It impacts the corporate law that applies to your entity for things like shareholder rights, annual reporting requirements, etc. Incorporating in Delaware doesn't make you liable for Delaware taxes any more than incorporating in California makes you liable for California taxes.

Taxes follow nexus, which generally follows where work is performed.

Now I'm on an off-topic tangent.

Since the topic is vehicle registration, I figured I'd look up the laws in my state of Colorado. Here's the text from Colorado's laws. "Foreign" in this context applies to states that aren't Colorado.

So the only way for a Montana LLC to not register a vehicle in Colorado would be to have the vehicle legitimately take part in interstate commerce. "Operates a business within this state" has to do with the physical location of the business and not the state of incorporation.

An owner of a foreign vehicle operated within this state for the transportation of persons or property for compensation or for the transportation of merchandise shall register such vehicle and pay the same fees and tax required by this article with reference to like vehicles. This provision shall not be construed to require registration or reregistration in this state of any motor vehicle, truck, bus, trailer, semitrailer, or trailer coach that is used in interstate commerce, but registration or reregistration shall be required in accordance with or to the extent that reciprocity exists between the state of Colorado and a foreign country or another state, territory, or possession of the United States.

Every nonresident person who operates a business within this state and owns and operates in such business any motor vehicle, trailer, semitrailer, or trailer coach within this state shall be required to register each such vehicle and pay the same fees and tax therefor as are required with reference to like vehicles owned by residents of this state. This provision shall not be construed to require registration or reregistration in this state of any motor vehicle, trailer, or trailer coach that is used in interstate commerce, but registration or reregistration shall be required in accordance with or to the extent that reciprocity exists between the state of Colorado and a foreign country or another state, territory, or possession of the United States.

 

[SwampNut]

So the only way for a Montana LLC to not register a vehicle in Colorado would be to have the vehicle legitimately take part in interstate commerce. "Operates a business within this state" has to do with the physical location of the business and not the state of incorporation.

Funny, I'm pretty sure that the law you quoted says it's legal for me to do this. My company has no real presence in any state. Most of our servers are in VA, but I've never been there, none of our people have. We don't have an office at all, and the employees are in multiple states. I live here, but where an employee lives doesn't seem to be addressed in the law.

I have not done it simply because I believe in paying for the absolutely excellent roads we have here, and their maintenance. And I've made a bunch of money selling to the state DOT and some cities. But if I lived in a dump like CA with horrible roads, I'd keep my money.

 

[hammick]

What state doesn't?

I think we all know we aren't talking about legitimate businesses here. We're talking about an LLC created for sole purpose of registering a vehicle, RV, boat, etc in the state of Montana to avoid paying sales tax in the state where the vehicle is located. If this gets abused enough states are going to start passing laws like California has done where tax is collected at the time of purchase even if the purchaser doesn't live there.

 

[BigSkies]

Funny, I'm pretty sure that the law you quoted says it's legal for me to do this. My company has no real presence in any state. Most of our servers are in VA, but I've never been there, none of our people have. We don't have an office at all, and the employees are in multiple states. I live here, but where an employee lives doesn't seem to be addressed in the law.

I have not done it simply because I believe in paying for the absolutely excellent roads we have here, and their maintenance. And I've made a bunch of money selling to the state DOT and some cities. But if I lived in a dump like CA with horrible roads, I'd keep my money.

I'm in no way an expert in this topic, but I've met a few people that are. The rules for nexus get complex and aren't always intuitive for companies like you describe. This is what tax lawyers get paid for, and there are methods for apportioning revenue between states (which is different from car registration requirements).

I've heard of some B2B SAAS startups that recently got caught up in sales tax audits. These companies assume they're exempt from sales tax (because these types of sales usually are tax exempt), but accidentally operated in a way that created a sales tax liability in a state they didn't even know they were operating in. Rumors from the lawyers is that states are becoming much more aggressive with this enforcement due to tight budgets and virtual companies not really knowing the rules.

Back to the car registration topic.

I'm certainly not saying the Montana LLC path can't work. I can see a few paths where it could work.

For example, the requirement to register a vehicle usually applies after having it in state for 90 days. A youtuber buying a vehicle through a Montana LLC (or destroying it like WhislinWhatever), reviewing it, and flipping it in under 90 days is probably fine.

While each state is different, the common requirement is that a vehicle is registered in state if it stays there more than ~90 days and isn't involved in interstate commerce.

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