The Maine Superior Court held that the transfer of a motor vehicle from a majority owner of an LLC to the LLC was exempt from use tax. Me. Rev. Stat. Ann.§ 1764 provides that tax must be levied upon all casual sales involving motor vehicles except those sold for resale at retail sale or sold to an LLC when the seller is the owner of a majority of the ownership interests in the LLC. In this instance, a husband and wife jointly owned 51 percent of the membership interests in the LLC as joint tenants. Because the husband was the owner of the vehicle and then transferred it to the LLC of which he was deemed a majority owner, the transfer was exempt. Welch Oil Company v. State Tax Assessor, Superior Court of Maine, Dkt. No. AP-10-43 (Sept. 28, 2012).

Co-author - Patrick Smith, Director Baker Tilly Virchow Krause, LLP

Mr. Ely is a partner and Messrs. Thistle and Rhyne are associates with the multistate law firm of Bradley Arant Boult Cummings LLP in its Birmingham, Alabama office. Mr. Ely is Chair of the firm’s State & Local Tax Practice Group. Messrs. Ely, Thistle, and Rhyne co-author a chapter on the state taxation of PTEs in the treatise “Keatinge, Conaway and Ely on Choice of Business Entity” (West). Mr. Smith is the Tax Director at Baker Tilly Virchow Krause, LLP and is head of State & Local Tax Services for the firm’s Chicago office. Mr. Smith is a co-author of “State Taxation of Pass-Through Entities and Their Owners,” a treatise published by Warren Gorham and Lamont/West since 2005. Messrs. Ely and Smith have co-presented on this topic at NYU’s Institute on Federal Taxation, as have Messrs. Thistle and Smith for a webinar hosted by Strafford Publications in early June.