Q: If a LLC in Montana purchases an RV in Arkansas, does the company pay any sales tax?
An LLC in Montana has a legal residence there, and therefore pays no sales, use, or property tax on purchases. So can I as the owner of the Montana LLC, acting as the company, purchase an RV in Arkansas, register it in Montana, and pay no sales tax on the purchase?
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A:
While your Montana LLC doesn't pay sales tax in Montana, purchasing an RV in Arkansas might still subject you to Arkansas sales tax. Many states require sales tax to be collected on vehicle purchases made within their borders, regardless of where the vehicle will be registered.
Additionally, using a Montana LLC to avoid sales tax can raise issues if the RV is used or stored in other states. Some states have measures in place to prevent tax avoidance strategies and may impose taxes or penalties accordingly.
It's important to understand the tax obligations in both Arkansas and any states where you plan to use the RV. Consulting with a tax professional or legal advisor can help ensure you're complying with all relevant laws and regulations.
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