Transferring FROM Montana back to your home state

Good question. Inquiry minds want to know. Maybe @technom3 can help here for Arizona?

 

Does your state charge sales tax? If so they aren't going to let you register a Ferrari without paying tax on FMV. If you hand over a bill of sale with a selling price of a dollar, for instance, I imagine you'll invite a whole lot of scrutiny. Especially if they see the seller is a Montana LLC, which would probably raise a red flag in virtually any state that charges a sales or use tax on automobiles. Be prepared to defend whatever amount you put on the bill of sale.

 

Arizona does not require a bill of sale on private party transactions. As long as you did not buy from a licensed car dealer a bill of sale is not required because it is non taxable event.

So long story short is. You don't have to pay taxes on that transaction.

 

Interesting question.

FWIW
I'd assume the LLC files an annual tax return and has taken depreciation on the vehicle.
I also understood that even if depreciation was not taken, it has to be taken upon the sale.

So if the LLC sold, or transferred ownership, or perhaps some type of gifting ownership, to an (related party) individual, if at book value (cost less depn) there would be no taxable gain to the LLC.
That may wrap up the LLC transaction.

But, If the LLC sold the vehicle for a loss, well, I have no idea, as I understood, that our agencies do not allow losses on personal property (ie cars), not sure about a business asset or other aspects of the OP's LLC.
Seems the LLC would have to file a tax return with a loss.

Next the individual wants to register in their new home state at book value or at a less than book value.
The price should be reflective of current market, unless there is damage to the car which can be supported.
Red flag, perhaps, as many DMV clerks will "blue book" a value.
Sales tax and registration fee are paid based on value, at least in Calif.

Interesting question, I would like to know the correct answer.

 

Nope, an LLC is a pass-through entity just like a partnership or an S-corp. It files no tax return, but instead all revenues and expenses are reported on the owner's personal tax return on schedule C. You can't take depreciation unless the LLC is a real business and the car is used for that business.

I'm a retired CPA and a former LLC owner.

 

i posted a memo (i think) someone sent me from the GA Dept of Rev / DMV

be very careful bringing your car back. they are on the look out at least in GA

 

In Texas, registering a Montana LLC vehicle is a non-taxable event.

 

Pretty much no matter what in California you are paying sales tax is the answer. If you put a California plate on it and there is a change of ownership you are paying sales tax.

Now the rule used to be... If you owned a car for more than 6 months in another state and move to California it was a non taxable event. It has to be/had to be already owned property likely taxed in it's previous resgistered state....or else... California will take a bite and want taxes.

So if you move from Montana LLC registered in Montana to Montana LLC registered in California and it's been more than 6 months registered elsewhere you can transfer sales tax free.

If you go Montana LLC registered in Montana to personal name in California you are paying sales tax as that is a SALE.

 

My understanding is that the state of Delaware has no state sales tax either. Anyone chime in 0n this? Please keep this info coming in, there is lots to learn here.

 

in GA, they look to see if you are behind the LLC. then they get you for back taxes and penalties

 

I had a client file for a Texas registration for a tour bus that had been registered in Montana. Nobody said nothing. This was a few years ago.

 

Could you expand/clarify this a bit? So if you buy a car from another state that had it registered under a Montana LLC, and you make your own Montana LLC to transfer the car from seller to you, that would be a tax free event?

 

I have done it several times; Montana to Colorado. As long as you have owned it a year. Licensed in Montana for one year or longer and then convert to Colorado title no tax involved.

 

When you say "you have owned it" does that mean you yourself or the Montana LLC? Basically, if you buy it from someone else who had it in a Montana LLC and then he transfers into your own Montana LLC would that work? Or would you yourself have to have had it over a year first?

 

The last time I did this type of transfer(my wife’s Subaru) was a few years ago. The was no sale just a transfer of title from our LLC to us as individuals so there was no tax owed.
And for all you self righteous folks out there we have ranch property in Montana so our LLC is a legitimate company and we have always titled our vehicles there for convenience since we are up there a lot. Saving the sales tax just happens to be a nice benefit. Always remember every state is different on how they handle this situation.
I’m not sure on your question about transferring from one LLC to another LLC if they are between to MT LLCs then there would be no Montana tax owed because they don’t have a sales tax. hope that helps