Has anyone ever gone through the process of setting up a Montana LLC to avoid sales tax on a vehicle purchase? The juice has to be worth the squeeze but if you can avoid Texas sales tax (6.25%) on a vehicle approaching ~$100k, maybe it's worth it?
Montana LLC to Avoid Sales Tax
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Last: 2 yr ago by MTTANK
I have a business partner that did it and it wasn't too bad. Financing is a bit trickier because the vehicle is technically owned by the llc. Also insurance can be an issue. Have to confirm with your insurer that they will cover a Tx garage location on MT tags.
This post is an example of someone on this board doing it
https://texags.com/forums/46/topics/3335911
https://texags.com/forums/46/topics/3335911
I would have liked to have seen Montana
Picard said:
I would have liked to have seen Montana
…and have a Cadillac with big American tail fins
80sGeorge said:Picard said:
I would have liked to have seen Montana
…and have a Cadillac with big American tail fins
I was thinking more like a pickup truck, maybe even a recreational vehicle. And drive state to state. No papers.
I've always wondered how insurance works with this. Can you get a personal policy with it in an LLC or do you have to pay a higher rate with a commercial policy.
Never understood this mentality. If you can afford the $100,000 vehicle, you can afford the $6,250 in sales taxes.
Two years ago the county I live in ran a sting on about 10-12 owners with $200-$300k vehicles that were doing the Montana LLC thing. It was glorious. Not only did they get to pay all the sales taxes from original purchase date/price, they also go to pay the accumulated property taxes for x-years they were cheating the system (+ interest) the fine on top of it all was the amount of the sales taxes from purchase date.
Good luck. I hope you get caught.
Two years ago the county I live in ran a sting on about 10-12 owners with $200-$300k vehicles that were doing the Montana LLC thing. It was glorious. Not only did they get to pay all the sales taxes from original purchase date/price, they also go to pay the accumulated property taxes for x-years they were cheating the system (+ interest) the fine on top of it all was the amount of the sales taxes from purchase date.
Good luck. I hope you get caught.
I've had clients come to me to do this - my unsolicited professional opinion is that it's not worth the risk for ~$6k savings as I've seen stings cost 10x to resolve.
Buying a car through an LLC is not difficult (just did this with my new car bought through my firm), but actively working to not pay taxes (this is tax evasion, not tax avoidance) creates a ****storm if caught.
Buying a car through an LLC is not difficult (just did this with my new car bought through my firm), but actively working to not pay taxes (this is tax evasion, not tax avoidance) creates a ****storm if caught.
agracer said:
Never understood this mentality. If you can afford $X, you can afford the $Y in taxes.
You would make a fine democrat policy maker.
If I reside in Texas, but I buy an RV in Indiana that is stored in Utah and travels between Utah, Wyoming, Colorado, and Wisconsin, why should I pay Texas sales tax on that RV?
TxAg20 said:agracer said:
Never understood this mentality. If you can afford $X, you can afford the $Y in taxes.
You would make a fine democrat policy maker.
If I reside in Texas, but I buy an RV in Indiana that is stored in Utah and travels between Utah, Wyoming, Colorado, and Wisconsin, why should I pay Texas sales tax on that RV?
It's fine. Difference with this set up is you don't have to set foot in Montana ever and neither does your car/rv with this LLC. You live, buy and drive it in Texas.
TxAg20 said:agracer said:
Never understood this mentality. If you can afford $X, you can afford the $Y in taxes.
You would make a fine democrat policy maker.
If I reside in Texas, but I buy an RV in Indiana that is stored in Utah and travels between Utah, Wyoming, Colorado, and Wisconsin, why should I pay Texas sales tax on that RV?
Is the OP buying an RV that will never spend time in Texas?
That situation is very different than what he was responding to.TxAg20 said:agracer said:
Never understood this mentality. If you can afford $X, you can afford the $Y in taxes.
You would make a fine democrat policy maker.
If I reside in Texas, but I buy an RV in Indiana that is stored in Utah and travels between Utah, Wyoming, Colorado, and Wisconsin, why should I pay Texas sales tax on that RV?
schmendeler said:TxAg20 said:agracer said:
Never understood this mentality. If you can afford $X, you can afford the $Y in taxes.
You would make a fine democrat policy maker.
If I reside in Texas, but I buy an RV in Indiana that is stored in Utah and travels between Utah, Wyoming, Colorado, and Wisconsin, why should I pay Texas sales tax on that RV?
Is the OP buying an RV that will never spend time in Texas?
I don't know what the OP is doing. I disagree with the opinion that you should pay Texas sales tax on a vehicle just because you reside in Texas. Especially something like an RV, or airplane, that may not be used in Texas or may be partially used in Texas.
TxAg20 said:schmendeler said:TxAg20 said:agracer said:
Never understood this mentality. If you can afford $X, you can afford the $Y in taxes.
You would make a fine democrat policy maker.
If I reside in Texas, but I buy an RV in Indiana that is stored in Utah and travels between Utah, Wyoming, Colorado, and Wisconsin, why should I pay Texas sales tax on that RV?
Is the OP buying an RV that will never spend time in Texas?
I don't know what the OP is doing. I disagree with the opinion that you should pay Texas sales tax on a vehicle just because you reside in Texas. Especially something like an RV, or airplane, that may not be used in Texas or may be partially used in Texas.
In your RV scenario, wouldn't you pay Indiana sales tax?
Did you know Indiana sales tax is higher than Texas?
aggiedata said:TxAg20 said:schmendeler said:TxAg20 said:agracer said:
Never understood this mentality. If you can afford $X, you can afford the $Y in taxes.
You would make a fine democrat policy maker.
If I reside in Texas, but I buy an RV in Indiana that is stored in Utah and travels between Utah, Wyoming, Colorado, and Wisconsin, why should I pay Texas sales tax on that RV?
Is the OP buying an RV that will never spend time in Texas?
I don't know what the OP is doing. I disagree with the opinion that you should pay Texas sales tax on a vehicle just because you reside in Texas. Especially something like an RV, or airplane, that may not be used in Texas or may be partially used in Texas.
In your RV scenario, wouldn't you pay Indiana sales tax?
Did you know Indiana sales tax is higher than Texas?
Why would you choose to pay Indiana sales tax?
So tell me where you pay the RV sales tax in your scenario. If you live in Texas, and buy it in Indiana and store it in Colorado.
Whatever state it is registered in (typically where the owner resides and has a driver's license - unless owned by a legal entity).aggiedata said:
So tell me where you pay the RV sales tax in your scenario. If you live in Texas, and buy it in Indiana and store it in Colorado.
The Wonderer said:Whatever state it is registered in (typically where the owner resides and has a driver's license).aggiedata said:
So tell me where you pay the RV sales tax in your scenario. If you live in Texas, and buy it in Indiana and store it in Colorado.
Right. My point is you got to pay sales tax where it's registered. Where is this RV registered? Texas is cheaper than Indiana or Utah. Colorado would be nice at 2.9% I'm not sure how you swing that if it's just stored there.
I haven't seen this with personal vehicles in my experience it's mainly been with large and very expensive commercial vehicles, RV's, buses, and boats. I don't know that it's worth it. Also, do you plan on taking trips up there to get updated inspections/registration? There can be some other hoops to jump through that aren't worth it. Some states require you have a driver's license and insurance locally for the same reason. I don't know about Montana.
Personal advice, just pay the taxes.
Personal advice, just pay the taxes.
I would take advantage of a Montana LLC in that scenario and pay no sales tax.
Now do all the commercial big rigs and trailers that liscense in Oklahoma where it's much cheaper.
Does this same scheme work with Utah plates? I see those around all the time
Mas89 said:
Now do all the commercial big rigs and trailers that liscense in Oklahoma where it's much cheaper.
Semi and trucks that cross a bunch of state lines used apportioned tags. Fees go to states they operate in.
I said it in the other thread and I'll say it again. This is what's ****ed with our tax system and why it should be way simpler with no loopholes. People have loopholes I'd never fathom. Like registering a car in a state they've never been.
That said, don't hate the op for doing it. Also won't feel at all sorry if he gets busted.
That said, don't hate the op for doing it. Also won't feel at all sorry if he gets busted.
Ag for Life said:
Does this same scheme work with Utah plates? I see those around all the time
Utah has higher sales tax than Texas. It only would work in states with zero or very low sales tax.
Completely different from to what the OP is doing. If you have a residence in one of those states, then I would suggest you register the vehicle there.TxAg20 said:agracer said:
Never understood this mentality. If you can afford $X, you can afford the $Y in taxes.
You would make a fine democrat policy maker.
If I reside in Texas, but I buy an RV in Indiana that is stored in Utah and travels between Utah, Wyoming, Colorado, and Wisconsin, why should I pay Texas sales tax on that RV?
Not a good idea.
Quote:
The juice has to be worth the squeeze
people who say this
Tell me about the stings the state/cops do?
They go after people having no idea if they have a legit LLC business that operates out of Montana?
Why can't they go after the paper tag issues around Dallas/SA/Houston? WAY more than a few dozen $6,000 sales tax incomes they are missing out on.
Oh wait, I know why...
They go after people having no idea if they have a legit LLC business that operates out of Montana?
Why can't they go after the paper tag issues around Dallas/SA/Houston? WAY more than a few dozen $6,000 sales tax incomes they are missing out on.
Oh wait, I know why...
Same reason why they no longer impound vehicles without insurance.
When you get paper tags from most dealers you pay the sales tax when you purchase the vehicle. At least that's been my experience. Not all, but most dealers collect the sales tax at time of sale and remit it to the county.OnlyForNow said:
Tell me about the stings the state/cops do?
They go after people having no idea if they have a legit LLC business that operates out of Montana?
Why can't they go after the paper tag issues around Dallas/SA/Houston? WAY more than a few dozen $6,000 sales tax incomes they are missing out on.
Oh wait, I know why...
No?
And the county went after people whom they could prove had just set up the LLC to register their cars and avoid the sales and property taxes. All of them live and worked here and their cars rarely, if ever, left the state. They did not have legit businesses in Montana.
I think they're referring to the thousands of 99 beat to **** altimas on the road (and similar) that have paper plates but obviously aren't new purchases.
But I know houston has started cracking down on it. Or trying, they have a long ways to go but have set up on the freeway and just pull people over for paper plates.
But I know houston has started cracking down on it. Or trying, they have a long ways to go but have set up on the freeway and just pull people over for paper plates.
You can get paper plates for "agents" and
they can be easily photocopied as well
they can be easily photocopied as well
But do they actually prove it's all BS? Or is the threat of the charges enough to make people pay up?
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