The RV Tax Haven
posted by Elizabeth Daigneau With the official start of summer just two weeks away, 8 million Americans are revving up their RVs and planning their summer ...
With the official start of summer just two weeks away, 8 million Americans are revving up their RVs and planning their summer travels. Another couple of thousand are buying RVs for the first time, and according to the Kansas City Star , registering them in Montana.
Montana's tax-free registration on RVs has made it a tax scofflaw's haven. According to the paper, officials in Kansas, Missouri and other states have been crying foul for years over a loophole that saves RV owners a bundle and costs other states millions in taxes.
Registering a $150,000 RV in Kansas or Missouri, for instance, costs a motor-home enthusiast up to $10,000 a year in taxes. In Montana, it costs just $1,300 in fees and legal costs.
How are they doing it? By establishing a limited liability company, or LLC, in Montana, and then purchasing and registering an RV under the name of the company--not the individual.
Montana officials estimate more than 30,000 motor homes have been registered in the state for people living elsewhere, bringing in about $5 million in registration fees a year for the state--a fraction compared to what other states are losing in taxes.
Read a related Governing article here.