SToronto

Bingo....this too....just own it!

I was hoping to tow a Uhaul, just the small open trailer behind the GT3 when I need to pick up some soil bags. When I took delivery and drove it for a month, about 150km, I realized wait a minute there is a central exhaust and I couldn't tow. Oh man, so disappointing to discover that. Wish they tell you those things in the brochure.

ipse dixit

I'm getting tired of wiping my *** with dollar bills, I think it's time to pay the ADMs. Just to mix things up a bit.

CAlexio

You use dollar bills? Why so cheap?

ipse dixit

I am very regular. Very.

subshooter

What is that threshold in CA? In LA, we are required to register our cars within 30 days of establishing residency in the state. So what. My LLC resides in Montana. I don't own the car, the LLC does of which I am am member. Go out on I-10 (3 miles from my home) and you will see 50 out of state tags within 30 minutes. There is no law that says you can't drive a car with an out of state tag for X number of days in the state. How would they enforce it anyway? Even if there was a law, is it reset every time you leave the state to visit a 7-11?

Also, how would the state of CA even "discover" this issue? If they did discover it, so what - it's a rental and you owe them no explanation. No one cares that you are driving a car with out of state tags. I spent 20 years in the military and all of my cars had Florida tags until I retired. I only lived in Florida for 6 months in a tiny apartment after I was first commissioned. I lived and worked in 12 different states during the next 20 years with Florida tags openly parked in a driveway or parking lot. No one ever questioned me, no one cared. Why would they?

gravedgr

I appreciate the info you sent me and I was seriously considering it, but ...

Mech33

My bad, I was interpreting LA as Los Angeles in your earlier posts. .

Not sure regarding your questions, just curios since it sounded like you had given it some thought.

subshooter

Yes I saw that a while ago. I have done some serious research into this as you can probably tell. There are numerous other articles of so called "crack downs" including ones in California. The video is mostly scare tactics in my opinion and it worked on you. It wont survive real legal challenge as the courts would have to "pierce" the intent of an LLC.

Here is the legal catch that muddies the water a bit though which is why I decided to name my company Montana Porsche Rentals and then rent the car to me. Most states have a sales tax for cars which includes a "use fee" or if you bring the car into the state, you are paying the use fee tax when you first register it in that state. So if you buy the car and live in that state you need to pay the use fee. It's hard for the state to make a legal case against you if the LLC owns the car though but it's not an impossible case for them. Since I rent the car through a valid legal contract, this added an additional layer of legal protection for me and am not liable or required to pay that use fee.

The LLC is legally licensed in MT and following all the laws of that state. My state would have to take my LLC (which they have no jurisdiction over) or the state of MT to court. But they have no case. The state would have to pass a law addressing this issue as it currently stands now. This was the recommendation of the Louisiana Supreme Court to the DMV here. The DMV lost in all lower courts also (before they took it to the supreme court) because the courts refused to pierce the intent and purpose of the LLC which was to shield tax liability. The same would happen in every state in my opinion.

The DMV has no legal basis to challenge this strategy.

gravedgr

I haven't ruled it out entirely, but I'd like to get some first hand feedback from local folks on recent enforcement. In addition to the video I ran across several articles with first hand accounts of people who were caught up in the enforcement.

subshooter

They need to challenge the "enforcement". Your state needs to have a specific law to even enforce. Just because some government bureaucrat decides to "enforce" something doesn't mean it is legal or actually enforceable.

BlackBeauty

Hi, I’m a tax partner at an international accounting Firm. Here’s a brief summary of the case from 2014:

https://www.martindale.com/governmen...LP_2150608.htm

I had previously chimed in on this so I apologize for doing so again. The piece of the case that’s being missed is that the Louisiana DOR tried to assess the person, not the LLC. Had the assessed the LLC, arguably they would have won.

I think it would reasonable to conclude that after the LA DOR lost the case on a technicality, they most like communicated to their revenue agents to make the assessments against the LLCs.

Notwithstanding this, the agency’s enforcement division decide whether or not to enforce it. Let’s say someone shows up in a Bugatti with Montana plates, about 9 states away from Montana, someone calls their state representative, or the DOR etc? My guess is they’re going to pursue an assessment. If it’s a $200k car, do they have the same motivation level?

There’s a separate issue about getting insurance for your tax avoidance LLC, not every insurer is anxious to insure a vehicle owned by a shell company in Montana to be housed and driven in another state. Plus your Montana LLC tax return will need to be filed annually as long as you have your “business”.

I want to emphasize my personal respect for Subshooter’s service to our Country, and well as his due diligence here.

The fact remains however that the vehicles are being used in a jurisdiction in which no Sales or Use tax has been paid - nor has any tax been paid in any jurisdiction. Just pause for a second, if the Lousiana DOR was so motivated to take this to their State’s Supreme Court, what does that tell you about their motivations to shut these arrangements down?

subshooter

No worries and I respect the challenge and feedback. I recall a similar conversation a year or two ago. but I'm a bit smarter now. There is no issue with driving a vehicle in Louisiana with out of state tags. People do it all the time. The issue is whether you can do that while being the owner and living in the state. Of course, I am not the owner. The LLC is. I am simply renting a car with out of state tags and there is no law in the state that requires me or the LLC to register the car in the state (and hence pay that tax). The state would have to sue the LLC or the state of MT. Good luck.

In the specific legal case that you and I are both referencing, the owner did not have a rental agreement with his LLC (but still won by the way). The state of Louisiana cannot force the LLC to register the car in their state purely because the car is parked in front of someone's house for X number of months. The state cannot also prevent individuals from renting a car from an out of state company and then drive it in the state. It's unenforceable and in fact is done all the time. There is also a reason the DMV elected not to sue the LLC. This was not a trivial decision or a mistake by the DMV (although this is implied in one of the case studies). They had no case so they sued the individual and still lost in every court.

The insurance is not an issue. My insurance company already has covered my car with full disclosure by me which was recorded BTW. In addition, the companies that help individuals like me set up the LLCs in Montana deal with all these issues all the time and provide a list of insurance companies that cover these arrangements right on their web site.

The remedy for the state is that they would have to pass a law preventing Louisiana residents from driving a rental car with out of state tags for more than X months. That law does not currently exist. Ironically, this is exactly why Porsche's European Delivery has a time limit on how long you can keep the car over in Europe (6 months) without being forced to pay the 19% VAT. They got it right.

I'm sure doing this is out of the comfort zone of many. That's fair. I'm very comfortable with it.

WenigerAberBeser

I'm all about decreasing how much tax I pay legally, but Montana LLC sounds like a lot of headache, worry and work to save a couple thousand $$ on a GT3.

There's a guy in Plano area here is DFW that has a LaFerrari, Chiron, Pagani (RIP), Senna, RR, etc... all of his cars are tagged Montana, but I can understand since you are talking hundreds of thousands of $$.

subshooter

It's really not that hard. It's about 2 hours/year for me and $115/year to have the LLC managed by a separate company in MT.

I'm buying a $200k GT3 and a $60k Ford Bronco this year. Sales and Use taxes in Louisiana are 10%. That's on top of my 2018 911 and 2014 Boxster also registered in MT.

That's a lot of dough and worth 2 hours/year of my time. I also move around a lot. Paying huge registration and sales taxes every time I move is ridiculous. I already paid sales taxes on my first two Porsche in PA and again in Delaware. I wasn't going to pay another 10% once I got to Louisiana. (I'm moving to Florida next)

SToronto

This Montana stuff sounds interesting. Not aware of any such strategies in Canada for vehicle ownership. Short of trying to make it a business expense if you have a related business.