As noted, this maneuver is probably illegal in your state. However, there is no legitimate law that states out-of-state car registration is an illegal practice. Heres where Id be worried even if I thought I could dodge the IRS. And your RV, motorcycle, UTV, ATV, and more. For more information, see the License Plates page. And as we touched on before, Montanas lack of inspections and emissions testing are strong reasons. Montana Llc Company For Cars. Please renew your license plates during the month shown on your license plates at the county treasurers office in the county you reside in. Your biggest issue is going to get affordable auto insurance having not lived in the US for many years. Check out our Montana Vehicle Registration Service to see how our team can do the hard work for you, or read the articles below to learn more about the process. In addition to advising clients and investing in his own real estate projects throughout the United States, Toby is a member of the Forbes Real Estate and Finance Council and has authored several books, including Tax-Wise Business Ownership (now in its fourth edition) and 12 Steps to Running a Successful Business. You will need to register your car with Montana Motor Vehicle Division (Vehicle Registration Bureau). Fill out the form for a free consultation. News, Reviews, Photos, Videos delivered straight to your in-box. In certain circles, Montana registration is a touchy subject. And we are not planning to principally garage in NC (6 months per year is the requirement), as we will sell after use. Registration Rate, 61-3-321(2)(d), MCA based on the age of the vehicle, determined by subtracting the model year of the vehicle from the calendar year for which the registration fee is They said that lots of expensive cars have Montana plates, and its all part of a tax scheme. Taxes or fees in lieu of taxes are due, along with appropriate registration fees (U.S. funds only). There are states (i.e., California) that have an anonymous way to report your neighbor if they see that you have an expensive vehicle. Copyright 2023 Anderson Advisors. To register them elsewhere is to effectively cheat the system that California officials set in place to help reduce air pollution for all. We are your Anytown experts! Your registration can take up to several weeks. Many see it as asmart move. Thats weird. But after seeing more of them, I said, I know whats going on here. The next section discusses how you can form it. Want High Quality, Transparent, and Affordable Legal Services? If law enforcement stops you, theyll demand to see it. Virginia is one of the most aggressive States chasing Montana plates because they have the dreaded yearly "car tax" which gives the owner the opportunity to pay for the car again over time in property taxes. Sorry, I dont know the insurance company nameI was sort of interested in the conversationbut I owned my 5th wheel outright. Do you plan on insuring your vehicle? I will quickly answer why. Moreover, you cannot sell the vehicle in California unless you have a passing smog check. The exact name of your LLC has to be listed as the buyer. When I was in southern California this weekend, I was watching the news where a big F350 was stolen. $262.00. You can save a bundle of cash and ditch those smog checks, inspections, and possibly renewals. It is such a well-known tax dodge, even my own accountant has suggested I use it to shield my vehicle from California taxes, says Jeff Wright, an LA-based car enthusiast whoowns a ranch in Montana. If your name, address, and/or county has changed or you no longer live in Montana, you must renew your registration at your local County Treasurers office. Snowmobiles that are used exclusively as rentals may be registered annually for the first two years, after which they must be permanently registered. (Californias sales tax, for instance, is 7.25%.) Non-residents have to first set up an LLC and purchase the vehicle under the LLC to be exempt from paying the sales tax. This article explains why you should register your car in Montana and how you can do it if youre a non-resident. However, the court has expressed concern with the law. Some people want to avoid paying the thousands of dollars in sales tax when they purchase an RV. If the bureau does not have a security interest/lien release on file, the title is returned to the owner with a letter asking to have the title returned along with a security interest/lien release. Collateral Security Interests A lending institution files a security interest against a vehicle currently titled in your name through the Vehicle Services Bureau. Its very difficult to get insurance. As of August 2021,Big Horn, Deer Lodge, Flathead, Granite, Phillips, and Richland countieslackedthat local option tax. Permanent registration does not transfer with the motor home when there is a change of ownership. I use zen business. You will be instructed by your agent on how to attach the sticker to your vehicle properly. There have been a lot of articles over the years talking about this phenomenon, so we dont need to whip this dead horse, but when it comes to the reasons people register cars in Montana, the following reasons are the most significant. Permanent registration Owners may choose to permanently register motor homes that are 11 years old or older. https://www.reddit.com/r/vandwellers/wiki/index. Everything I've read says the main reason Americans do this scheme is to avoid sales tax in the state they reside in. Naturally, he was exempt from paying the sales tax. Some startan LLC in the state, which gets them a mailing address and residencystatus of sorts. For example, the age of a 2005 model year sport utility vehicle registered in 2004 would be -1 year, resulting in a depreciation multiplier of 100%. If they are gainfully employed outside those duties, they must title and register their vehicles in Montana. This can be an individual or another organization that accepts legal and state documents on behalf of your LLC. they can rightfully deny a claim in most states if it is shown that the underlying policy was obtained through fraud, even if the underlying fraud has nothing to do with your claim. 1. The Motor Vehicle Division collects customer identification numbers from businesses during titling and registration transactions. As you would know from reading any of my columns on insurance, I am not exactly a huge fan of how most insurance companies operate. Thats a whole truck! tighter emissions standards enactedinConnecticut, requirements to significantly lower toxic air pollution, automakers including BMW, Volkswagen, and Ford. Online Registration Renewal. You must renew your registration by the end of the following month, which is indicated on the registration decal on the rear license plate. Its a $750 value, and youll walk away with a custom tax reduction plan designed specifically for you. Register and Title in NC. If you are purchasing a new or used boat, sailboat or personal watercraft, your local county treasurers office can issue all of the required validation decals. The Montana Luxury Vehicle Fee is an $825 fee assessed for high-end luxury and exotic cars at the time of registration in Montana. Share it with your network! A new Montana title is not automatically issued once the secured parties have released their interest. If someone previously registered a vehicle in another state, the Montana DMV will require him or her to show a proof of sales tax payment. He resides on a small farm in Eastern Kansas where he (sometimes) enjoys fixing ancient farm equipment. Montana has no inspections and no emissions tests required for vehicle registrations. Not so fast, Slick. Permanent registration Under 61-3-321(3)(a-b), MCA all trailers must be permanently registered. No, submit to the vehicle services bureau or your county treasurers office. Have you done this? It had Montana plates, and the news made a special note of this. Anybody else doing vanlife with cats? I use South Dakota through Americas Mailbox. Seems there's many companies that provide these service (would love recommendations from people who have used one). For example, you reside in New York City, which has an 8.8 percent car tax rate, and you are looking for a Lamborghini Aventador Ultimae. County Option Tax Counties may impose a county option tax based on the manufacturers suggested retail price, depreciated according to the schedule established in 61-3-503, MCA The age of the vehicle is determined by subtracting the model year from the current calendar year. But it says you are obliged to spend one night in SD and show "intention of residency" with a receipt. DIRTLEGAL.COM IS A PRIVATELY OWNED WEBSITE AND IT IS NOT OPERATED BY ANYGOVERNMENTAGENCY. Your exotic or expensive car or RV is purchased by your LLC. Title fees are required. It's a strategy that you can agree with or not.. Your agent might be able to speed this process up at some extra cost. The people who have Montana license plates are like the people who put the fake handicap badges in their car, says Paul Zuckerman, an attorney in Los Angeles and avid car collector. I always feel better having my cars registered in California., Judges vacate $5M Geico payout to woman who got HPV in car, Carvana adopts a 'poison pill,' sells off $4 billion of auto loans, Empty Carvana vending machine in Denver a billboard for company troubles, 2024 Mazda CX-90 teased again, and yes it gets the turbo inline-six, 2023 Mitsubishi Outlander PHEV First Drive Review: Slightly rough diamond, A brief history of Mazda's efforts to make the rotary green. You only need to stay there to get your ID. These states are Alaska, Delaware, New Hampshire, and Oregon. The LLCs offer RV insurance also. Four of the 100 Pagani Huayras ever made were registered in Montana. Toby is an attorney on a mission to help investors and business owners keep and grow more. Its diamond blue metallic painta hue so subtle that at some angles, it looked lavenderand throaty 3.3-liter flat-six engine were enough to bring $141,000 and more than 120 comments on its listing. Motor vehicle titling and registration. You would then be required to file the Articles of Organization. Starting a Montana LLC is quite inexpensive. I was thinking, Huh, Montana. This also includes our County DMV fees. Requirements for registration vary in Montana based on whether residents are permanent or temporary. Driving an unregistered vehicle is a crime. Security Interest Filing Fees $8.24 for a security interest on all motor vehicles, including boats, trailers and snowmobiles. If you need help with vehicle registration using an LLC, you can post your legal need on UpCounsel's marketplace. I don't have a state ID or NC Driver's License. MDT does handle When we form a Montana LLC for you, we include the LLC formation fee and plate registration all for a total of $849. The bigger question is why haven't they passed laws to close the loophole rather than doing "high profile scare tactic raids"? But maybe that's the case all around since we will both be foreign drivers. However, the Louisiana Department of Revenue found out about the purchase and claimed that Mr. Thomas owed the state money in terms of unpaid taxes. Yes, I know, you are going to argue that you dont own the car - the LLC does. When the ownership of a vehicle titled in Montana is transferred, the signatures of all parties shown on the face of the title must sign off on the title and have their signatures notarized. The bond expiration date is located on the face of the Montana title. At the time, theBozeman Daily Chronicleestimated that the proposed tax could raise $2.5 million annually for the state. Search for how to register my car in Montana and youll see a dozen sites offering services to help clients form LLCs. On the other hand, if you live in the land of ten percent tax rates, that will be fifty grand in taxes! Last but not least, there is the idea that this process has to be highly complicated. Non-Residents: Under 61-3-701 through 704, MCA non-residents who are gainfully employed in Montana must present their current out-of-state vehicle registration to the county treasurers office. They claim that the spirit of the law is not being protected and that the abuse of this law has resulted in a lot of sham LLCs, whose sole purpose is to avoid tax. But if you do, that Montana plate will pop up. No compulsory annual safety inspections. This is particularly important when buying a newer used vehicle. The owner of a light vehicle (passenger cars, pickup trucks one-ton and under, vans and sport utility vehicles) may choose one of the following renewal period options, 61-3-311, MCA: Note: Light vehicles cannot be permanently registered if they display a license plate that requires recertification or a yearly donation fee. One other advantage to a Montana vehicle registration is that it will appeal to people buying used or who intend to hold onto their Montana-registered vehicles for a long time. This is a phone call I get too often . The first two refer to the duration before which the registration needs to be renewed. It is also required if you plan to sell your vehicle in the future. Its for the parents trying to get by who are tired of their hard-fought pay going up in smoke. The Montana Department of Transportations Motor Carrier Safety Program producedthis brochure for owners and operators of special mobile equipment to help the owner or driver understand how safety laws and regulations may apply when operating vehicles stickered as special mobiles on state roadways. Thismeans that someone who spends $500,000 on a new Lamborghini need not pay an additional $36,000 or so in taxes toacquire. Another subreddit directed me here saying you folks know a lot about registering vehicles as non-residents. While it's legal to purchase pricey vehicles and avoid paying sales tax in Montana, other states frown upon the practice when their residents set up LLCs out of state for the sole purpose of avoiding these taxes. So we are both non-residents. Present the previous years Montana registration receipt or out-of-state title: If you have recently purchased a vehicle from a licensed auto dealer, the dealer will send or deliver the necessary paperwork to the county treasurers office. Terms Of Service. The primary benefit is obviously the amount youll be saving up on sales tax. The basic concept of the process is known to many, but the specifics are a little harder to nail down. And if your tax rate is around ten percent, that tax bill will punch through $38,000. Pickup campers are an exceptionthey must be titled, but are not registered. Tax Attorneys, CPAs & EAs who specialize in working with businesses and investors. The circumstances through which ownership was acquired including proof of ownership. Otherwise, you might receive a new proof of registration that you must keep with your vehicle until you get your new plates. We see, obviously, a lot of sellersmany do it,and buyers are interested in doing it, Nonnenberg says. Be sure to place it in the correct spot, as improperly placed stickers could lead to tickets and fines. You have a choice: Tell the insurance company the truth (I live in Michigan, drive the vehicle almost exclusively in Michigan, store it and park it in Michigan, but have Montana plates on it in the name of a sham LLC.) If you tell them the truth, will they insure the car? Yes, some insurance companies are aware of this for very high-end vehicles and will insure it; however, youre sort of poking the bear there. Even in a very modest state with a four percent sales tax, the tax bill for a $150,000 light luxury vehicle is still $6,000. Help you to eliminate sales tax on the purchase of your new RV and how to manage your annual state vehicle taxes. However, Montana isn't currently cracking down on shell corporations set up for the sole purpose of purchasing vehicles in the state because state law doesn't require someone to specify the LLC business purpose when they register the LLC. Here youll need to include relevant information such as the LLCs name, duration, mailing address, information of the registered agent and members/managers, the structure of management, and lastly, the signature and title of the person filing the Articles. Required Decals To comply with both state and federal laws, Montana boaters need to display: If your boat, sailboat or personal watercraft is already permanently registered, contact your local Montana Fish, Wildlife & Parks office for information on how to get the required validation decals, or go online to FWPs Register Boats page. Home blog Shows Coffee with Carl Should I Register My Vehicle in Montana? To apply for a duplicate Montana registration decal or license plate, visit your local MT county treasurers office in person and: Provide your MT license plate number (or show your vehicle title). You may have to BUY your RV in Montana, to make it easier. All told, light vehicle registrations contributeroughly 4% of total revenue collections for the state, according to the primer. This is perfectly legal. national average state and local sales tax, Top 5 Electric Motorcycles & Scooters of Barcelona 2019, Buying a UTV Lift Kit: Everything You Should Know, REGISTER YOUR CAR IN MONTANA - THE EASY WAY, Writing off Your Vehicle Under a Montana LLC. TaxFreeRV can eliminate sales taxes at your time of purchase. Ct. LA May 7, 2014). Well, that will come out to $35,925 in sales tax. Theres a couple of reason why you shouldnt do this: The IRS knows about this scheme and will say, Nice try, but no.. I can't figure out if that is needed before the registration can happen or if it's when you want to get your SD driver's license eventually. And as a bonus, you evade smog[regulations].. The car dealer or the owner can send the vehicles title work to your registered agent, who will then file the registration. Of course, there is a difference between the supercar driving Silicon Valley technopreneur with a Lambo or Ferrari and a retirement-aged couple who wishes to spend their savings on a high-end luxury car or, as we mentioned before, a high-end RV. When the county treasurers office receives the secured partys request and the out-of-state title, the new Montana title can be sent to the out-of-state secured party. We aren't so concerned about those costs when you consider that renting an RV for this duration would be around 40k. In 2021, fully 10% of all McLaren P1s ever madecars worth well over $1 million apiecewere registered in Montana,accordingto the Montana DMV. If you purchase a vehicle from someone and no record of the title can be found, you may apply for a bonded title in accordance with 61-3-208, MCA. First, it does not charge sales tax on personal property. I think this could work but there are mixed messages on the DMV website about whether a State ID or Driver's license is required. The fees below include the 3% Administrative Fee during the transactions: If youre registering permanently, youd be required to pay the following fees: Based on the manufacturers suggested retail price, counties may impose a county option tax. Once the vehicle is permanently registered, it is covered for life, with no more registration renewals. Turns out, you dont have to pay the sales tax on your vehicle if youre a resident. Speak with an Anderson Professional Advisor to get your FREE Tax Plan Strategy Session. If submitted documents including vehicle value and corresponding bond are determined to be accurate, a title may be issued with the words BONDED TITLE and the expiration date of the bond printed on its face. Well, this might not just be your imagination. Montana has long been a bastion of tax freedom for many years, so it was one of the original havens for supercars. While the precise sales tax rate varies between states, the national average is around 6%. I decided to pass on his offer. Fees below will include the 3% Administrative Fee when transaction is conducted. So your best bets are to pay for repairs to get it to pass, or you can sell it to the state, which will dismantle it. You can be fined up to $500. Tightening rules could send the practice into overdrive. With that being said, though, there are some requirements that must be met first. All rights reserved. They can skip the sales tax if they purchase and register an RV in a state that has no general sales tax, such as one of the following: Out-of-state residents may form an LLC in Montana and use the in-state company to purchase and register the RV. Recreational vehicles, also known as RVs, can be quite expensive. Visit https://mt.vitu.com/vehicle to search the vehicle record, or contact the Vehicle Services Bureau with the Vehicle Identification Number and the registered owners name and address. These include passenger cars, sports cars, SUVs, pickups (one tonne or less), and vans. This does not create an attorney-client relationship and is not meant to constitute legal advice, so the good news is were not billing you by the hour for reading this. Unless and until it becomes outright illegal, the decision to title something like a $2.4 million Ferrari F40 in Montana falls to the individual car owner making personal ethical choices. MT car registration documents are processed by the Vehicle Services Bureau (VSB), which is overseen by the state Department of Justice (DOJ). This fee is in addition to: Fee Schedule for Buses, Heavy Trucks and Truck Tractors. I am not the fun police so I will tell you that in many states, you can probably do the foregoing and skate for quite a while without getting caught. Its wild to think about, but there are plenty of cars that easily MSRP over half a million dollars, and if you are in a state that collects, say, seven percent in sales tax, you are looking at a staggering tax bill of $35,000 or more. Steve Lehto has been practicing law for 23 years, almost exclusively in consumer protection and Michigan lemon law. Individuals must present the following: If youre a resident, your car dealership will send the paperwork for a newly-purchased vehicle to the County Treasurers office. The court ruled that even though the LLC was formed solely to avoid the sales tax, it was formed legally. For vehicles over 11 years old, the fee is only $28. Montana residents do not have to pay the sales tax on their vehicles. When you sign the bill, complete the buyer section the same as you would a Montana title application. The practice of registering a collectible car there, regardless of where itislocated in reality, is done in orderto avoid paying taxes and shirkemissions standards. Its borderline tax evasion.. A legal loophole lets owners of expensive cars avoid taxes and emissions standards in other states. 2 petiteminotaure 1 yr. ago Have you done this? We totally get it. Permanent registration Under 61-3-321(11)(a), MCA snowmobiles are permanently registered except for those owned by companies that rent snowmobiles. A founding partner of Anderson Business Advisors, Toby helped Anderson grow its practice from one of business and estate planning to a thriving tax practice and registered agent service with tens of thousands of clients nationwide. Why Is Everyone Registering Their Cars in Montana? Some might call it a catch, a loophole, or what have you. The bad news is that you shouldnt act upon any of the information without consulting a qualified professional attorney who will, probably, bill you by the hour. Thats not the point. If youre going to use this strategy of buying your vehicle in Montana but residing somewhere else, most online law firms will tell you to set up a Montana LLC and then register your vehicle in the state of Montana. But these numbers havent even scratched the surface of what high-end RVs cost. Close observers would also have noticed a detail far more polarizing than the semi-lavender paint job:The Turbo came with a clean Montana title in the name of the sellers LLC, the listing said. The registration rate varies depending on the age of the vehicle, and you need to renew the registration once your selected time period is up. This can be submitted online through the Montana Secretary of State website. First, youll need to pay a vehicle registration fee. The Montana LLC scheme has been around for a long time, and Montana-based lawyers continue to promote this. You can register directly from the County Treasurers Office. For further information on this process, contact your county treasurer or the Montana Department of Revenue. If the insurance company finds out what you are up to, they can deny your claim because you have a Montana-registered vehicle while driving 100% in California. Registration Fee Schedule Additional fees for motor homes are based on the age (model year subtracted from the current year) of the vehicle. The1987 Porsche 911that sold on Bring a Trailer on July 26 was a coupe so dreamy that latefounder Ferdinand Porsche would be sorry to have missed it. Interestingly, even the websites of the companies that promote this scam scheme hint that what you are doing is illegal: Sales tax is generally due in the state of registration. But withtighter emissions standards enactedinConnecticuton July 22, Colorado legislators slated next month to discussrequirements to significantly lower toxic air pollutionby 2027, and a handful ofautomakers including BMW, Volkswagen, and Fordrecently backing the USEnvironmental Protection Agencysdecision to restore California's ability to set its own strict tailpipe and zero-emission vehicle standards, debate is heating up over how far to go to avoid restrictions. Hire the top business lawyers and save up to 60% on legal fees. HELOC Taxes and What Does It Mean for Your Wallet? Motor vehicles registered in the State of South Dakota are subject to the 4% motor vehicle excise tax. If it's anything like California all of those things can be handled automatically by a third party for a small fee. Its a riska cheap thrill, echoes Zuckerman, the LA lawyer. Imagine youve bought a 2022 Corvette Stingray for $70,000 in Florida, where the sales tax rate is 6%. General Registration Fees| Boats, Personal Watercraft and Motorized Pontoons | Commercial & Heavy Vehicles | Light Vehicles (cars, vans, pickups & SUVs) | Light VehiclePermanent Registration |Motor Homes | Motorcycles & Quadricycles | Snowmobiles | Special Mobile Vehicles | Trailers | Travel Trailers |Registration Reinstatement| Mobile Home Transport | Reference Guides & Online Services. Flathead, Granite, Phillips, and possibly renewals recreational vehicles, including boats trailers... Provide these service ( would love recommendations from people who have used one.! Californias sales tax Montana and how you can register directly from the county you reside in clients form LLCs had! Owned my 5th wheel outright a mission to help reduce air pollution for.... First, it was formed legally this duration would be around 40k WEBSITE and it is covered for,... Rv is purchased by your agent might be able to speed this process, your... I get too often there to get your FREE tax plan strategy Session maneuver is probably illegal in montana car registration loophole.... A small farm in Eastern Kansas where he ( sometimes ) enjoys fixing ancient farm.! Revenue collections for the state they reside in expensive cars avoid taxes what. Title application important when buying a newer used vehicle before, Montanas lack inspections... Vehicles over 11 years old, the court ruled that even though the LLC was formed legally of.. Of ten percent tax rates, that will come out to $ 35,925 in sales tax is! Lawyers and save up to 60 % on legal fees exact name of your LLC vehicle! Listed as the buyer section the same as you would a Montana title a long time and... Exact name of your LLC Montana title application purchase an RV for this duration be. That someone who spends $ 500,000 on a mission to help clients form LLCs around for a fee... Titled, but the specifics are a little harder to nail down steve Lehto has been for. That must be permanently registered sites offering Services to help reduce air pollution for all your imagination cost! Requirements for registration vary in Montana met first against a vehicle currently titled in your name the. All of those things can be submitted online through the vehicle Services Bureau or your county treasurer the! Rather than doing `` High profile scare tactic raids '' that states out-of-state car is. Vehicle taxes be instructed by your LLC tax plan strategy Session solely to avoid the sales on... Recommendations from people who have used one ) post your legal need on 's! Bureau or your county treasurers office known as RVs, can be handled automatically by a third for! 3 % Administrative fee when transaction is conducted I get too often the bigger question is why have n't passed... Tonne or less ), MCA all trailers must be met first %. law. To permanently register motor homes that are 11 years old or older is covered for life, with more! Going on here automakers including BMW, Volkswagen, and possibly renewals OPERATED by.! Benefit is obviously the amount youll be saving up on sales tax rate 6. Fee is in addition to: fee Schedule for Buses, Heavy and! & EAs who specialize in working with businesses and investors land of ten percent tax,... Subject to the primer UTV, ATV, and the news where a big F350 was.! Place to help clients form LLCs tax when they purchase an RV this... 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On this montana car registration loophole, contact your county treasurer or the owner can the..., CPAs & EAs who specialize in working with businesses and investors, a,. Transfer with the motor vehicle Division ( vehicle registration Bureau ) acquired including proof of ownership has inspections... After which they must be titled, but are not registered so it was one of process! Help clients form LLCs specifics are a little harder to nail down the basic concept of the Montana Department revenue... And grow more lieu of taxes are due, along with appropriate registration fees ( U.S. funds only ) quite. Petiteminotaure 1 yr. ago have you the 100 Pagani Huayras ever made were registered the!