Montana LLC for sales tax? (Moving to LA which has 10.4% sales tax)

[gearchruncher]

That just means that if you get caught you won't go to jail but you will still have to pay the LA taxes, fees, and penalties.

Except it literally does not.
Tax evasion is illegal. Tax avoidance is legal, and means you legally avoided the tax. Which means you do not owe the tax, fees, or penalties. I mean, even the IRS has a document on this:

https://apps.irs.gov/app/understandingTaxes/whys/thm01/les03/media/ws_ans_thm01_les03.pdf

Therefore I think the liability would fall to the driver and not the owner of the vehicle. IMO it's no different than when you rent a car. Even though the car is owner by the rental car company, you (and your insurance) are responsible if you wreck the car or crash into someone or something else.

This is an overly simple take on liability. You're saying that if the wheel falls of a rental car due to poor maintenance, or the rental car company rents to someone with no driver's license and no insurance, they're not liable?

Neglegent entrustment is a thing, and in many states the owner of a vehicle is liable for many actions, not the "operator."

What if your car just spontaneously catches on fire in a parking garage and ruins 4 cars around it?

There is only one way to answer this, and it's with a specific, detailed read of the exact insurance policy that is covering that specific vehicle and LLC. In a world where you pay different rates if your car is garaged vs stored in the driveway, being one zip code different can make a huge difference, and most policies have definitions on who you can loan a vehicle to, how could anyone think an insurance company wouldn't care if the owner was an LLC or a private human individual?

 

[Ostrichsak]

My stance is that yes, such a scenario clearly exists and the availability of financing for a purchase can be the difference between maintaining your job and livelihood or losing it.

This is why hard-line absolute rules are rarely of value beyond being an echo chamber for one’s own deeply held beliefs.

You've got a lot of lending institutions willing to give out $1,500 car loans, do ya?

 

[strider]

This is an overly simple take on liability. You're saying that if the wheel falls of a rental car due to poor maintenance, or the rental car company rents to someone with no driver's license and no insurance, they're not liable?

Neglegent entrustment is a thing, and in many states the owner of a vehicle is liable for many actions, not the "operator."

What if your car just spontaneously catches on fire in a parking garage and ruins 4 cars around it?

There is only one way to answer this, and it's with a specific, detailed read of the exact insurance policy that is covering that specific vehicle and LLC. In a world where you pay different rates if your car is garaged vs stored in the driveway, being one zip code different can make a huge difference, and most policies have definitions on who you can loan a vehicle to, how could anyone think an insurance company wouldn't care if the owner was an LLC or a private human individual?

Thanks for the info on the tax avoidance vs evasion. I wasn't familiar.

I agree that one would have to first have a policy issued to the LLC and then read it. But my point is that the owner of the vehicle doesn't change the insurance company's risk, which is the be all and end all for them. Think of the possible scenarios that can happen to a car driven by the OP. Whether the car is stolen, they crash into someone, or they run off the road, the vehicle is being used in exactly the same way regardless of who owns it. So the insurance company's risk doesn't change. Everything you listed does change the risk (garaged or street parking, zip code, etc). Please explain how the words on the title change the risk profile.

 

[fholbert]

FYI from the aviation world:

One of the most common misconceptions of business aircraft ownership is that by purchasing or owning the aircraft in a Delaware corporation or LLC, you can avoid sales or use tax on your aircraft, or fly under the radar, so to speak, and not attract the attention of any taxing authorities. This process, or this procedure, does not absolve you of either sales or use tax obligations on your aircraft and is a poor planning strategy that states are relatively aware of, and they do have other ways to find out that your aircraft is based in their state. Some states, in fact, when they see a Delaware LLC, become largely suspicious that perhaps you do have an outstanding tax obligation owed to them.

That’s 100% true.

People think they are getting away with something, but after 3 or 4 years it catches up with them and now owe back taxes along with penalties. People who sell fuel and rent hangars are often obliged to report your tail number. Hard to say your plane is kept in Delaware when you regularly buy fuel and rent a hangar in Burbank.

Beyond that, I know one guy who‘s beat the system since I met him in In 2004. He pays rent on a tie down in Grants Pass OR “to beat the CA tax man.“ He’s sanded the Canadian tail number off the plane and it hasn’t been out of the hangar since 2007. It would be easier and cheaper to simply pay the tax. If you knew the guy, you’d understand.

 

[ucmndd]

You've got a lot of lending institutions willing to give out $1,500 car loans, do ya?

At least as many $1500 cars as you can buy in 2023.

Nice deflection.

 

[gearchruncher]

But my point is that the owner of the vehicle doesn't change the insurance company's risk, which is the be all and end all for them. Think of the possible scenarios that can happen to a car driven by the OP. Whether the car is stolen, they crash into someone, or they run off the road, the vehicle is being used in exactly the same way regardless of who owns it.

Here's the thing. I can't insure your car. And If I could, and I insure your car, it gets damaged, and I go to the insurance company and say "pay me to repair this car" they will say "no, because you, the policy holder, has suffered no damages." Because that's what insurance does- it makes the policyholder whole after damages occur. It does not insure a specific car against damages independent of ownership.

And once you realize that of course I can't insure your car, then you realize that I can't insure a car owned by an LLC, because I don't own that car either. The LLC does. So now the LLC must find insurance.

And once the insurance company sees they are insuring an LLC, and not a person, they will go "well, this is a company car, and I have no idea who may drive this car, so I am going to set commercial rates for it based on the worst driver I can imagine."

You can watch an actual lawyer describe this here (skip to 8:25 if all you want is the insurance issue):

 

[NewbyMaybe]

You could live tax free if you start the Church of Immaculate Elon Conception!

 

[NewbyMaybe]

Your chapel could be on Bourbon Street selling little Elon voodoo dolls.

 

[Ostrichsak]

At least as many $1500 cars as you can buy in 2023.

Nice deflection.

*Opens response with deflection, claims others are deflecting*

It's not a deflection as it gets to the very heart of this matter. Every post where you lean further into your stance looks more and more foolish.

I just checked Craigslist and there are literally hundreds of options right now for less than $1,500. That's in a relatively low population density area and only craigslist.

This idea that one MUST get a car loan as a basis for survival is complete BS but I think you know that, even if you won't admit it. We can't even get into the nuance of how car loans turn a $1,500 car purchase into a $15,000+ car purchase nearly 100% of the time because you refuse to have an honest conversation based on reality if your starting point is it's impossible to survive without a car loan. I've given you plenty of opportunity to recall that factually inaccurate claim and you just lean into it more each time.

I'm not having this conversation with someone who refuses to do so from a starting point of at least agreeing on fundamental & undeniable facts because it shows your interest isn't in understanding someone else but forcing your opinion upon them, no matter how inaccurate and out of touch with logic it is.

Acting like it's somehow discriminatory to want the poorest among us to make better financial decisions like not financing depreciating assets they can't afford for their own betterment is dumb.

And oh, by the way, let's not forget that we're talking about Lambos & Ferraris on a Tesla forum. So even your attempt to make me seem like I've lost touch with the "common man" to discredit me doesn't even apply to this conversation.

 

[ucmndd]

I should have known better than to engage with a fundamentalist. There’s no winning with religious extremists that insist they know best for everybody in every situation.

 

[strider]

I should have known better than to engage with a fundamentalist. There’s no winning with religious extremists that insist they know best for everybody in every situation.

Use the ignore feature (hover over their username on the left, click More options, then Ignore). Your quality of life will improve.

 

[Ostrichsak]

I should have known better than to engage with a fundamentalist. There’s no winning with religious extremists that insist they know best for everybody in every situation.

Religious fundamentalist? Me? Another swing and a miss. Helluva cut though. Even if I was though, I still haven't the foggiest idea what that would have to do with this conversation. Your point is so ridiculous that your deflections have become painful to witness even after claiming I'm the one deflecting when all I'm trying to do is get back to the original point I made that was challenged so many posts ago.

It must pain you to not be able to lump me into one group to be able to make your preprogrammed talk tracks align.

The fact that you keep trying to make this personal already tells me even you know you're wrong on this one. The math on this one is quite simple if anyone cares to crunch the numbers rather than blindly making poor decisions based on emotion.

 

[C7R35]

I ran MT plates on quite a few cars and know a good amount of people locally who do, with no issues. When my wife and I were cruising together after a car show and she got in an accident (her car is UT registered, mine was MT), highway patrol didn’t care about my plates. As for insurance, I simply told them the car was registered in Montana but parked full-time in my garage in Utah. Zero issues there as well.

This is just my experience. Everyone else’s experience may vary. It is worth noting that I have paid my fair share of sales taxes on other vehicles in the past couple years (Porsche Macan, Model X, Model 3, RS7, Range Rover).