Avoiding sales tax

[wrightstuf]

Hi folks!
Brand new to the class B thing and have begun my hunt for the right vehicle in earnest!

What I plan to do is to purchase and have it delivered to my friend's house in Montana. I will set up an LLC there and name my company "-- ---- Fine Coffee."
Coffee will be purchased at Costco in bulk. That's what I also drink in my K-cup dispenser at home which I also bought at Costco. I'll sell it out of the side door in my Travato! That is if anyone considers Kirkland coffee "fine."
The California Board of Equalization will issue you an exemption from sales/use tax If...and that's a big IF you can meet all the requirements for the first 12 months after delivery.
I live in San Diego and plan to spend about 5 months on the road doing a lot of fly-fishing with my Montana buddies and traveling to other fun spots! during the late spring/summer/early fall. I'll winter at home.

Now, before you say "this guy just wants to evade taxes," I do pay tax and ALOT of it! Sales tax where I live is over 8%. I also pay almost 8k in property tax. My thought is that now that I'm retired and enjoying the fruits of my labor, I'm entitled to a break! I also think that i'm out of California for a good part of the year not benefitting from all our sales tax is used for. And it's 100% legal. So, I'm not breaking the law, just bending it a little.

Thoughts?

[Bruceper]

My personal thoughts? Delete your post, or at least remove any information that may identify you or your venture that could come and bite you in the behind.

Sorry if that sounds conspiratorial, but Google loves to make searches easy.

[avanti]

Originally Posted by Bruceper

My personal thoughts? Delete your post, or at least remove any information that may identify you or your venture that could come and bite you in the behind.

Sorry if that sounds conspiratorial, but Google loves to make searches easy.

He says it is 100% legal, so why should he care?
Of course, he also says that he is "bending" the rules.

Snideness aside, what he proposes is tax fraud plain and simple. He appears to know this, but is fishing for people who will tell him it is OK. He says he is "entitled to a break". Unfortunately, it is the legislature that decides that, not him.

[wrightstuf]

Actually, I was fishing for others who do this and if they know easier ways to go about it. It most certainly is legal and is done routinely. So much, that states like California, Michigan, Arizona, and others with high sales tax are screaming bloody murder about Montana LLCs.
I certainly don't need validation for my actions. You're right though, I apologize for posting a topic that might be considered inflammatory or political. I'm new here and hope to get all sorts of positive feedback on camper vans!

http://www.boe.ca.gov/pdf/pub52.pdf

[Bud]

Originally Posted by wrightstuf

Actually, I was fishing for others who do this and if they know easier ways to go about it. It most certainly is legal and is done routinely. So much, that states like California, Michigan, Arizona, and others with high sales tax are screaming bloody murder about Montana LLCs.
I certainly don't need validation for my actions. You're right though, I apologize for posting a topic that might be considered inflammatory or political. I'm new here and hope to get all sorts of positive feedback on camper vans!

http://www.boe.ca.gov/pdf/pub52.pdf

You did I think make it at least a tiny bit, sort of, maybe political.

The subject is appropriate I think. Sort of maybe 2 parts - facts and 'ethics'.

Fact, it can be legal in more than one state. Is it ethical? Fact, yes and no.

Bud

[wrightstuf]

Originally Posted by Bud

You did I think make it at least a tiny bit, sort of, maybe political.

The subject is appropriate I think. Sort of maybe 2 parts - facts and 'ethics'.

Fact, it can be legal in more than one state. Is it ethical? Fact, yes and no.

Bud

Lol, well put sir.
I seriously need to think before posting sensitive topics. Just a couple of days ago I infuriated friends of mine by comments I made about Melania Trump (i like her).

[Boxster1971]

Originally Posted by wrightstuf

Actually, I was fishing for others who do this and if they know easier ways to go about it. It most certainly is legal and is done routinely. So much, that states like California, Michigan, Arizona, and others with high sales tax are screaming bloody murder about Montana LLCs.
I certainly don't need validation for my actions. You're right though, I apologize for posting a topic that might be considered inflammatory or political. I'm new here and hope to get all sorts of positive feedback on camper vans!

This topic is not inflammatory or political. It is often discussed on RV forums and applies to RVs, and other expensive recreational equipment.

You might think it is legal and the Montana LLCs will tell you it is legal in Montana, but your home state might have other ideas...

This was recently the subject of a RV Business news article. Read the linked Indiana Department of Revenue Letter of Finding on how a state can collect the tax you try to avoid.

Thor Attorney: Buyer Beware Of Montana LLC's | RV Business

[avanti]

Originally Posted by wrightstuf

It most certainly is legal

Complete BS. It may be legal in Montana, but it is most certainly NOT legal in California.

States are wise to motor vehicle sales tax evasion
Although the practice is perfectly legal in Montana, it isn’t appreciated in other states, especially those that depend on sales and use tax revenue and vehicle registration fees. When the Los Angeles Times broke the news in 2006 that Montana has a thriving cottage industry devoted to helping out-of-staters set up shell-corporations for the sole purpose of avoiding paying sales tax, states started working to close that loophole on their end. California, Iowa, Massachusetts, Minnesota, Nebraska, and Wyoming are among the states that have already done so, most commonly by enforcing sales or use tax collections on any vehicle bought in another state and brought into their state within a certain period of time.

https://www.avalara.com/us/en/blog/2...wednesday.html

http://www.boe.ca.gov/pdf/pub52.pdf

Saying that something is legal does not make it so.

[avanti]

For the record:
I do not think that this topic is inappropriate. (Otherwise I would have put my moderator's hat on). I just think that the practice is unambiguously tax evasion (NOT tax avoidance), and thus reprehensible.

[wrightstuf]

Originally Posted by Boxster1971

This topic is not inflammatory or political. It is often discussed on RV forums and applies to RVs, and other expensive recreational equipment.

You might think it is legal and the Montana LLCs will tell you it is legal in Montana, but your home state might have other ideas...

This was recently the subject of a RV Business news article. Read the linked Indiana Department of Revenue Letter of Finding on how a state can collect the tax you try to avoid.

Thor Attorney: Buyer Beware Of Montana LLC's | RV Business

Whoa!... Yes, this will certainly involve doing my homework and making sure I have crossed my Ts and dotted my Is.

[Bud]

"it's 100% legal. So, I'm not breaking the law, just bending it a little."

Please explain. Thanks

[GeorgeRa]

I didn’t pay sale taxes on the recent RVs or cars and it was legal, it was in fact perfectly legal, no bending of any law, not even a little, and as far as I know anyone can use the same law.

[FlyingDiver]

Originally Posted by GeorgeRa

I didn’t pay sale taxes on the recent RVs or cars and it was legal, it was in fact perfectly legal, no bending of any law, not even a little, and as far as I know anyone can use the same law.

What law is that?

[GeorgeRa]

Oregon State

[cruising7388]

Originally Posted by avanti

Snideness aside, what he proposes is tax fraud plain and simple. He appears to know this, but is fishing for people who will tell him it is OK. He says he is "entitled to a break". Unfortunately, it is the legislature that decides that, not him.

The legislature may initially decide but the court ultimately decides and the decisions vindicate the legality of an LLC and other states are bound to recognize them in compliance with the Full Faith and Credit clause of the Constitution.

California doesn't deny the legality of the LLC but they discourage them by putting you through the hoops. The Franchise Tax Board requires not only a minimum period of one year after purchase before the coach can enter California, it further requires the LLC to provide evidence that the coach has been in active use out of California for that period. Uninhabited storage doesn't suffice to meet the exemption requirement.

The ethics involved in avoiding taxes is a different subject. It appears that the difference between a perfectly fair loophole and an egregious scam seems to be largely dependent on the eye of the beholder. If the loophole is practically available, it borders on one's patriotic duty to pursue it but if you don't qualify for it, then it's just an outrageous scam. This syndrome is hardly unique to LLCs - it's ubiquitous. Hey, for the property owner, property tax, interest and eternal depreciation deductions are well deserved entitlements. For the guy renting the place who gets little if any trickle down benefits of those deductions, it's a disgraceful raid on the Treasury.

[InterBlog]

I paid Texas sales tax on a fairly expensive Class B which I bought in Tennessee and which had been interim-titled in Mississippi.

I have Texas plates on the vehicle. Those plates say the following to the world:

"I obey state law."
"I'm the kind of person who is generally not a cheat."
"I do more in our society than simply look out for Number One."
"I'm willing to pay my fair share just like every other person who is in similar circumstances."
"I don't believe that I warrant special treatment above everyone else in my community."

When I'm traveling and stopping from place to place, and I see someone with Montana plates on their vehicle, I don't engage them. Right off the bat, I know that we are not going to share core values, not going to have that much in common to talk about.

We have sky high real estate taxes in Texas; mine are around 3% annually. I don't go around feeling self-righteous and entitled because I pay those taxes like every other property owner.

Anyone who can truly afford a Class B can also afford to pay the bloody sales tax on it. The OP reportedly lives in San Diego, one of the most expensive cities in the nation. It would be instructive to know what his/her homestead is appraised at, just so we could have a firm data point on how hard done by (s)he really is.

Texas, redacted:

[Bud]

"When I'm traveling and stopping from place to place, and I see someone with Montana plates on their vehicle, I don't engage them. Right off the bat, I know that we are not going to share core values, not going to have that much in common to talk about."

You appear to be able to or claim to "I know" by only seeing some Montana plates. That's very impressive or ..................

Bud

[MsNomer]

Or maybe they actually live in Montana?

[Bud]

Originally Posted by MsNomer

Or maybe they actually live in Montana?

Obviously yes, but also there are all kind of circumstances out there.

[InterBlog]

Montana is ranked 44th out of 50 states for population, and is home to just 0.3% of the U.S. population.

By simple statistics, any given RV plate that says "Montana" likely belongs to a tax dodge from one of the other 49 states. Not guaranteed, but with those odds, and the ubiquity of this licensing practice, I'd place that bet.