The paper investigates the effectiveness of a smart base-isolation system for seismic response mitigation of extra-large liquified natural gas (LNG) storage tanks. The mathematical model of the base-isolated LNG tank with smart dampers, the magneto-rheological (MR) dampers, is presented. The governing equations of motion of the smart system are derived and solved by the classical transition matrix method in the time domain. The linear quadratic regulator (LQR) control scheme is employed to command MR dampers. The LNG tank system is analyzed under six artificial accelerograms, compatible with operational basis earthquake (OBE) and safe shutdown earthquake (SSE) response spectrum, generated using a method of a random set of phase angles with amplitudes obtained from power spectral density function. A time-delay compensation procedure based on the Taylor series expansion is applied to reduce the deterioration of control performance due to time delay. To investigate the effectiveness of smart base-isolation, the responses are compared with the fixed-base tank, base-isolated tank, and tank with passive MR damper. The results show that the smart base-isolation is effective in reducing the seismic response of extra-large LNG tanks, especially the displacement at the isolation level without much altering other responses. The passive MR damper is also found effective and showed fail-safe behavior even under the failure of the control algorithm. Moreover, the application of time-delay compensation using the Taylor series increased the performance and overall efficiency of the LNG tank system.