In December 2007, a man named Robert Thomas bought a $351,800 RV at the Dixie RV Super Store in the city of Hammond in his home state of Louisiana.

But it wasn’t technically Thomas who made the purchase — a fact a court would later agree with. Instead, it was bought by a Montana company, one formed for the sole purpose of buying the RV.

Two years later, when the Louisiana Department of Revenue caught up with Thomas, officials said he owed $49,509 in Louisiana sales tax and penalties, but Thomas appealed — and won.

The Montana company bought the RV, not Thomas, the court said.

It’s a strategy made possible by a loophole in Montana law, and wealthy out-of-state residents have been using it for years — setting up limited liability companies in the state and avoiding paying thousands of dollars in sales taxes to their home states.

And the number of nonresident vehicle registrations is growing, said Joann Loehr, Montana’s title and registration bureau chief. “It started off as motorhomes and now there are other vehicles in the mix.”

For a modest fee, several Montana “registered agent” companies, which are listed on the secretary of state’s website, will use that law, helping out-of-staters in legal tax evasion.

One such company, called $49 Montana Registered Agent in Whitefish, specializes in vehicle registrations, according to its website.

“If you’re going to buy a Ferrari, Lamborghini, or some other exotic vehicle, you can buy the car or truck of your dreams with a Montana LLC and not pay sales tax,” the website says. “But that’s not even the best part. Montana LLCs don’t have to buy their vehicles in Montana to not pay the sales tax.”

The website even features a photo of former Secretary of State Linda McCulloch posing with staff. The same page reads: “It would massively disrupt the entire way corporations and LLCs work to not allow LLCs to be formed for the sole purpose of owning something and avoiding taxes.”

“Professional, courteous help throughout the process and as needed on-going. They saved me thousands of dollars,” said Ken G., a retired Tennessee man who praised $49 MONTANA Registered Agent.

The term “shell corporations” is applicable here. The Chronicle attempted to track down a person who had recently bought an RV using a Montana LLC. Two LLCs registrations later, we were talking to the secretary of a Whitefish law firm whose address was on file for an entity named RIME 55 Holdings. The secretary said they just receive the mail — a courier picks it up.

The number of vehicles bearing Montana plates out of state is unknown but estimated in the thousands. But state officials said they’re not taking any steps to help other states enforce their tax laws, because all of this is legal in Montana and has been for decades. Montana’s LLC law dates back to 1991.

“At the Office of the Secretary of State, we are tasked with following the law, not making the laws,” said Secretary of State Corey Stapleton in a statement. “Per Montana (law), the business purpose for an LLC is not required for registration with the office.”

Does this harm Montana? Not really. County DMV offices do slightly more paperwork, but the tax evaders pay them the same amount locals do.

And the advantage that the aforementioned Whitefish company has is that it registers the vehicle in Flathead County, one of six counties in Montana that has no local-option vehicle tax.

In Gallatin County, DMV supervisor Laura Blackman said there’s been a decrease in the number of LLC registrations but an increase in high-end sports car and collector car registrations. And her staff are strict in requiring the registrant to have “an interest in real property” in the county — but that could be something as small as a storage unit, boat slip, vacation home or an attorney’s office address.

“We did have agents in town that would have hundreds of LLCs in their names, but in the last seven or eight years they’ve not maintained in Gallatin County,” Blackman said. “My only assumption would be that they found other counties where they have lower taxes.”

“Say its a Maserati, if it were brand new in Gallatin County, you’re talking like $3,000. In Flathead County you would just pay the flat tax and state taxes so you’d pay like maybe $280,” Blackman said.

And nonresidents can get permanent plates for their “classic” collector cars, which might sell for tens or hundreds of thousands of dollars, for about $150, in part because the county’s local tax bottoms out at $2.50 after a vehicle hits 18 years old, she said.

It might not hurt Montana, but other states don’t like it and have taken action. Government officials in Arizona, California, Colorado, Maryland, Nevada and Washington state have created tip lines to catch tax cheats.

California, Massachusetts and Iowa have passed laws aiming to prevent their residents from using the Montana loophole. Nebraska, which has a 7 percent sales tax, is the most recent, according to the National Conference on State Legislatures.

In 2014, lawmakers there gave state officials a law that they could use to go after RV owners with Montana tags by giving them 30 days to register in Nebraska or pay a fine up to 50 percent of the unpaid taxes.

Ever spotted a luxury sports car with Montana plates in a far off state? Send a photo to this reporter at tcarter@dailychronicle.com.

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Troy Carter covers politics and county government for the Chronicle.

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