A recent exchange about Montana LLCs at an RV group I belong to has brought out some pros and cons of forming an LLC to register your RV.
First, what is it for? By forming a Limited Liability Corp in Montana, you avoid paying sales tax. Most people who form an LLC for this purpose are domiciled elsewhere. That could come back to bite you in some cases. Keep in mind, I am sharing what others have found and do not personally have an LLC nor have I personally talked to someone in the firms mentioned below. I am sharing this because it is a question I am often asked and these points could help you ask better questions and make a better decision based on your personal circumstances.
Pros
- No sales tax. For a motorhome around $150,000, that saves literally thousands of dollars.
- Montana has a one-time registration fee so you do not pay yearly licensing and registration fees.
- Your personal liability is limited in the case of an accident.
Cons
- Some states will impose severe penalties if you are domiciled in their state but have a Montana LLC. You may be forced to re-register your RV in their state. States are not happy about losing the revenue.
- You may have to pay a yearly fee to the law firm that formed your LLC for required annual meetings.
Before acting
If you pursue this, talk to a lawyer who specializes in LLCs in Montana and find out if your domicile puts you at risk for penalties. RVers cautioned about being domiciled in Texas and Washington, though others found work-arounds. Be sure you know the law as it applies to your state before proceeding.
Check overall costs and make sure you will actually realize a savings. For a used or less expensive rig, you may not find a difference.
I am not personally familiar with these firms but you can use this information as a starting place.
- Bennett Law Office, P.C. specializes in LLCs- advertises in several RV magazines.
- Destination Financial Services works with Bennett and another firm and has financing packages
Yea or nay? Do your research, then decide for you. Jaimie Hall Bruzenak
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