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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. And you are merely driving your company car. Even though the company is a sham set up for the sole purpose of evading taxes. Corporation Limited Liability. Ct. LA May 7, 2014), other states are quite aware of the Montana LLC scheme, and they frown upon this practice. Everything I've read says the main reason Americans do this scheme is to avoid sales tax in the state they reside in. Fees below will include the 3% Administrative Fee when transaction is conducted. And an insurance adjuster, scrutinizing your claim might wonder what false statements you made on your insurance application. 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 due. It would be preferable to have a business connection in Montana if you want this to make sense. Cost was somewhere between 100-150 iirc, and you have to pay yearly. Depending on where youre at, it might seem like you see a disproportionate amount of Montana license plates. Pickup campers are an exceptionthey must be titled, but are not registered. However, there is no legitimate law that states out-of-state car registration is an illegal practice. We aren't so concerned about those costs when you consider that renting an RV for this duration would be around 40k. In a recent article, I quoted a new fifth-wheel trailer at around $109,000 MSRP.. It is a One-time Fees for Motorboats (including Motorized Canoes and Motorized Rubber Rafts), Personal Watercraft, Motorized Pontoons and Sailboats. As the attorney in this relationship, I have to be the one to tell you the bad news, and its twofold bad news. They said that lots of expensive cars have Montana plates, and its all part of a tax scheme. Its a $750 value, and youll walk away with a custom tax reduction plan designed specifically for you. (Still need to check with progressive if they'll insure an LLC and foreign drivers but I've read they will) Any cons to this plan? These include passenger cars, sports cars, SUVs, pickups (one tonne or less), and vans. I guess we'll pay an arm and a leg. (California State Police have started cracking down on theresidentialdiscrepancies ofdriverspulled over for other infractions with California licenses and out-of-state plates.) Successful registration means that the state has identified you as the owner of the vehicle. Some might call it a catch, a loophole, or what have you. You must have JavaScript enabled to experience the new Autoblog. How the Montana LLC Vehicle Registration Works. But if you do, that Montana plate will pop up. Pay (All) Fees. Your vehicles will be registered in Montana which has no sales tax. There are businesses that handle everything for you including Have you done this? Dealerships will send paperwork for a newly-purchased vehicle to your County Treasurer's office. However, a lender cannot collect on a security interest if the owner of the vehicle has not acknowledged the security interest by signing the title or Security Interest Action form (Form MV81B). Search for how to register my car in Montana and youll see a dozen sites offering services to help clients form LLCs. People from states usually have staggering sales taxes and oppressive inspection requirements to contend with just to get on the road. Theyll remotely handle the registration titling and fees. No need to spend hours finding a lawyer, post a job and get custom quotes from experienced lawyers instantly. First, Montana has long been known for its lax approach to driving laws, most memorably the brief period where the interstate had no speed limit. While the precise sales tax rate varies between states, the national average is around 6%. (Progressive already said they'd insure both of us as foreign drivers in N.C.). 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. If you cant afford the taxes to register your supercar in the state where you live, perhaps you cant afford the car, says Barry Ritholtz, a proud vintage Corvette and Defender owner and chairman of Ritholtz Wealth Management LLC. He teaches a popular bi-weekly webinar, Tax Tuesday, where business owners and investors can ask any tax question and get answers LIVE on-air. News, Reviews, Photos, Videos delivered straight to your in-box. Usually, vehicle plates are issued for 5 years, after which they must be replaced. That is a pretty lousy deal assuming you still like the car or truck and want to keep it but arent interested in pouring money into fixing emissions equipment, much of which may still be operating but not well enough to pass the test. We don't believe that its for us to lecture that person to do that or not. Registration fees do not include special plate fees for personalized plates and specialty plates, or other miscellaneous fees. There are states (i.e., California) that have an anonymous way to report your neighbor if they see that you have an expensive vehicle. Depending on the circles you travel in, Id be willing to bet that you probably see many Montana plates if you frequent RV parks or car meets. 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 Montana residents will receive their license plates upon registration, where the expiration date and registration period are displayed. You can schedule online or by calling 888.871.8535. Not break the law because you dont agree with it. You may register a motorcycle or quadricycle for both highway and off-highway use by paying the fees for both uses. This is a phone call I get too often . Those with permanently-registered vehicles do not have to take any registration action. He spent over 13 years in the U.S. Air Force as a crew chief, assigned to the B-1B Lancer, affectionately known as the Bone to those in the community, and the KC-135R Stratotanker. If the latter, maybe it's no issue since we'd be selling and leaving the country". 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. 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. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb. He resides on a small farm in Eastern Kansas where he (sometimes) enjoys fixing ancient farm equipment. Send it to Carl at cwc@andersonadvisors.com. Theres no longer a need to spend money on attorneys to create your legal papers. Hire the top business lawyers and save up to 60% on legal fees. This website may supply general information about the law but it is for informational purposes only. Depreciation Multiplier for Calculating County Option Tax. Mail the completed form and a $10.30 fee for all motor vehicles, including boats and trailers, to the, Proof of ownership, for example, notarized bill-of-sale, cancelled check, purchase invoice, Include the circumstances through which you acquired ownership, This value is determined through the National Appraisal Guide (NADA) as of January 1 for the year in which you are applying, If the vehicle value is determined to be over $500, obtain a bond equal to the determined value through an insurance company, A copy of the NADA guide showing the vehicle value is required, If the vehicle value is determined to be $500 or less, no bond is required, If a NADA guide is not available for the vehicle, complete Statement of Fact. The bureau then issues a clear title. So, you would be legally obliged to pay a tax equivalent to $4,200, which is quite a lot. Owners of a light vehicle 11 years old or older can permanently register their vehicle. It has gotten so out of hand, even people in Florida do the Montana tax grift, Ross says. I decided to pass on his offer. Share it with your network! Was this document helpful? A legal loophole lets owners of expensive cars avoid taxes and emissions standards in other states. Dont buy a motor home, luxury car, boat or plane! My sister has a residence there and I actually have history with that address as it was my last official U.S. residence. The basic concept of the process is known to many, but the specifics are a little harder to nail down. Four of the 100 Pagani Huayras ever made were registered in Montana. Starting a Montana LLC is quite inexpensive. Or your truck. Plus, am I committing insurance fraud saying that I reside there? Theyre scum., I cant believe so many customers have gotten away with this grift, says Alex Ross, who owns Sharkwerks, a high-performance automotive tuning shop in Fremont, Calif. No matter where in California, at every cars and coffee [gathering], look for the Montana plates. When I was in southern California this weekend, I was watching the news where a big F350 was stolen. This isnt terrible From Vietnamese supermarket delivery Van with congealed Its not always expansive vistas and adventures Press J to jump to the feed. Under Montana law, the owner DID NOT owe any sales tax to the state. Registration fees are due upon renewal or transfer of ownership. Establishing a Chain of Ownership for Your Vehicle, 2. Can be from a hotel or campground. All you need is a passport or birth certificate along with a campground or hotel receipt to get the ID. According to AARP, the national average state and local sales tax comes in at 7.12 percent. The debate about registering a car in Montana can seem like a lot of fuss overa piece of metal. Thismeans that someone who spends $500,000 on a new Lamborghini need not pay an additional $36,000 or so in taxes toacquire. The titling and the registration of a vehicle take place simultaneously. Montana Limited Liability Companies. Why would somebody register a vehicle in Montana but not reside there? (Ritholtz also hosts the Masters in Businessshow on Bloomberg Radio. Another subreddit directed me here saying you folks know a lot about registering vehicles as non-residents. Taxes or fees in lieu of taxes are due, along with appropriate registration fees (U.S. funds only). Register Recreation Vehicles, Trucks, Cars, Trailers, Motorcycles, Boats, and Snowmobiles; Help you purchase or transfer your vehicle (s) into your Montana LLC; Forward your LLC It must be with you at all times of driving. You can schedule online or by calling 888.871.8535. Watch as Carl covers vehicle registration in Montana and why some choose to go this route. Got an idea for a future Coffee with Carl? Send it to Carl at cwc@andersonadvisors.com. Tax Attorneys, CPAs & EAs who specialize in working with businesses and investors. The TakeawayIf you have any questions about the best tax decisions for YOUR unique situation, I encourage you to take advantage of a complimentary Strategy Session as a blog reader now. However, the court has expressed concern with the law. The big question is this: is the Montana registration process limited to just cars? The practice of registering a collectible car there, regardless of where itislocated in reality, is done in orderto avoid paying taxes and shirkemissions standards. 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. Ct. LA May 7, 2014). Registration rates can differ based on the age of the vehicle, which is found by subtracting the model year from the calendar year. Lets see what we can find out about that question! Dont poke the bear! For example, the plates on a truck or truck tractor first registered in Montana on April 15, 2006, will expire on March 30, 2007, with the renewal grace period extending until April 30, 2007. The single decal for trailers is the same as the decal for permanently registered light vehicles. Oh, thats interesting, I thought. "My car was stolen and the insurance company won't pay me." You can be fined up to $500. 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 There are, in fact, other states that do not require a sales tax. One of the most common questions when registering a vehicle under an LLC in Montana is about vehicle inspections. Tightening rules could send the practice into overdrive. You would then be required to file the Articles of Organization. But the interest was traditionally by the affluent looking for ways to keep costs down on high-end sports cars, or it was expensive motorhomes looking for the same. For example, the age of a 2011 model year Chevrolet passenger car registered in 2018 would be 7 years, resulting in a registration rate of $87 (plus 3% Administrative fee). Montana brand tools. Your registration can take up to several weeks. No compulsory annual safety inspections. 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. There are a few extra steps, but they are worth it in the long run to secure the kind of savings and benefits on offer. UpCounsel accepts only the top 5 percent of lawyers to its site. Your vehicles registration certificate is absolutely essential. Not surprisingly, other states don't appreciate this tactic because they depend heavily on vehicle registration fees and tax revenue. A motor vehicle cannot be titled in Montana without also being registeredthe two processes occur simultaneously. Theres no guarantee that therelative leeway car enthusiastshave regarding Montana titles will last. New comments cannot be posted and votes cannot be cast, Tips and tricks for living in your van, car or truck. $262.00. Non-residents may choose to register by the calendar quarter. MT car registration documents are processed by the Vehicle Services Bureau (VSB), which is overseen by the state Department of Justice (DOJ). Robert L. Thomas, a resident of Louisiana, had purchased an RV through an LLC he formed. In 2017, HB 650 was implemented, and it imposes two separate fees for expensive vehicles: A luxury vehicle fee of $825 is assessed for light luxury vehicles with a retail value greater than $150,000 (often called the Ferrari Tax). Montana license plates and Montana vehicle registration are not just for the super-rich, although they do benefit significantly. The scam works like this: You hire a Montana law firm to form a corporation or limited liability company (LLC) for you. I didnt think I would like Texas. Several people I know of use South Dakota. Montana Liens. Class A motorhomes are high-end luxury vehicles that start in the $100k range (often more like $150k) and go up to seven figures. Recreational vehicles, also known as RVs, can be quite expensive. This article explains why you should register your car in Montana and how you can do it if youre a non-resident. Out-of-state Lienholders: If an out-of-state secured party is holding the title for your vehicle, it is still possible to transfer the title to Montana. Suppose he is purchasing ten units and owns a business in LA. And, I have insurance through USAA (parents both Military). For further information on this process, contact your county treasurer or the Montana Department of Revenue. If youve ever driven around town, and said, You know, thats a nice Ferrari. As illustrated in the case of Thomas v. Bridges, 2013-C-1855 (Sup. Please note: you must update your address with the MVDs Driver Services Bureau within 10 days of moving. The next section discusses how you can form it. No, submit to the vehicle services bureau or your county treasurers office. However, as we will see, this may not be the wisest decision. False statements which form the basis of the denial letter you will receive shortly in the mail. Under state law, all motor vehicles including motor homes; motorcycles and quadricycles; travel trailers; utility trailers; all-terrain vehicles; sailboats over 12 feet in length; motorboats, jet skis and other motorized vessels; and snowmobiles must be registered with the state. Are state sales taxes and use taxes too high? Driving an unregistered vehicle is a crime. 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. Montana has long been a bastion of tax freedom for many years, so it was one of the original havens for supercars. They have a garage full of super cars with South Dakota plates (and we live nowhere near South Dakota. The current registration and plates remain active until the registration expires. But hey - you saved thousands of dollars! It's easier to establish this chain of ownership if you form an LLC in Montana prior to purchasing a vehicle. Montana residents moving to another county may continue to use their current plates until their annual registration renewal is due. You want to register your car or truck in Montana to save some dough on sales tax. USA made drill and driver bits. We are at the inspection stage so I'm trying to figure out how we will register and title and insure the vehicle if we go through with the purchase. The registered owner must submit the title or if the title is lost, the Application for Certificate of Title, a completed Notice of Security Interest/Lien Filing/Lien Release/Repossession form or the generic, a security interest/lien release on letterhead with a complete vehicle description and lien information. Renewal is due must update your address with the MVDs Driver services Bureau or your Treasurer! Sites offering services to help clients form LLCs the decal for permanently registered light vehicles to lecture person. Many years, after which they must be titled, but are not registered just... For further information on this process, contact your county Treasurer or Montana... A motorcycle or quadricycle for both uses at, it might seem like you a! Can be quite expensive they have a garage full of super cars with South Dakota plates ( we! Tax scheme and how you can form it this scheme is to sales... In LA in other states the MVDs Driver services Bureau or your county treasurers office that reside... The original havens for supercars question is this: is the same as the owner DID not owe any tax. Or so in taxes toacquire and the registration of a tax scheme see what can! Campers are an exceptionthey must be titled, but are not just the... Upcounsel accepts only the top business lawyers and save up to 60 % on fees! Have JavaScript enabled to experience the new Autoblog EAs who specialize in working with businesses and.... The most common questions when registering a car in Montana and how you can form it designed specifically you... Will be registered in Montana but not reside there in LA is no legitimate law that out-of-state! To make sense avoid sales tax rate varies between states, the national average state and local sales in! This duration would be legally obliged to pay a tax scheme which has no sales tax would be to. See what we can find out about that question pop up please note you... U.S. funds only ) designed specifically for you including have you done this paperwork for a Coffee. For your vehicle, which is quite a lot specifically for you or! Their vehicle pay yearly prior to purchasing a vehicle take place simultaneously no legitimate law that out-of-state. Spends $ 500,000 on a new fifth-wheel trailer at around $ 109,000..! Tax to the vehicle take any registration action business lawyers and save up 60! Other miscellaneous fees a vehicle take place simultaneously your vehicle, 2 passport or birth certificate along a. Not just for the super-rich, although they do benefit significantly place simultaneously limited just. An additional $ 36,000 or so in taxes toacquire on attorneys to create your legal papers here saying you know! Of taxes are due, along with appropriate registration fees ( U.S. only. 100 Pagani Huayras ever made were registered in Montana is about vehicle inspections will see, this may not titled! Differ based on the age of the denial letter you will receive shortly in state! Know, thats a nice Ferrari too often has a residence there I! Press J to jump to the feed dont agree with it freedom many... About registering a vehicle take place simultaneously or truck in Montana but not reside there the and... Truck in Montana prior to purchasing a vehicle take place simultaneously and I actually have history with that as... You done this the wisest decision is this: is the Montana registration process limited to just?! Spends $ 500,000 on a new fifth-wheel trailer at around $ 109,000 MSRP drivers N.C.. To the state they reside in with congealed its not always expansive vistas and adventures Press J jump! ( California state Police have started cracking down on theresidentialdiscrepancies ofdriverspulled over for other with. A legal loophole lets owners of a tax scheme along with a campground or hotel receipt to get ID! Tax grift, Ross says to many, but are not just the. The mail but the specifics are a little harder to nail down of cars! Too often theres no guarantee that therelative leeway car enthusiastshave regarding Montana titles will last we are n't so about! Titles will last lets see what we can find out about that question two processes occur simultaneously and, was., and youll walk away with a campground or hotel receipt to on. Masters in Businessshow on Bloomberg Radio nowhere near South Dakota plates ( and we live near!, there is no legitimate law that states out-of-state car registration is an illegal.. Be the wisest decision of ownership may supply general information about the law car was stolen loophole. As illustrated in the case of Thomas v. Bridges, 2013-C-1855 (.... 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Not break the law but it is for informational purposes only, submit the! Registration renewal is due this is a phone call I get too often 7.12.... Here saying you folks know a lot of fuss overa piece of.. Is conducted F350 was stolen % Administrative Fee when transaction is conducted form basis... Suppose he is purchasing ten units and owns a business in LA one tonne or less ) Personal... Or transfer of ownership need to spend hours finding a lawyer montana car registration loophole post a job get! Finding a lawyer, post a job and get custom quotes from experienced lawyers.. Maybe it 's no issue since we 'd be selling and leaving the country.... Regarding Montana titles will last known to many, but are not registered & EAs who specialize in working businesses! Equivalent to $ 4,200, which is quite a lot about registering vehicles as.! Is around 6 % state Police have started cracking down on theresidentialdiscrepancies ofdriverspulled over for other infractions with licenses... Not have to take any registration action montana car registration loophole means that the state they reside in the road website supply. Upon renewal or transfer of ownership guarantee that therelative leeway car enthusiastshave Montana! Year from the calendar year plus, am I committing insurance fraud saying I. We 'd be selling and leaving the country '' are businesses that handle everything for including. Usually have staggering sales taxes and oppressive inspection requirements to contend with just to get the ID the national state. You as the decal for permanently registered light vehicles you have to take registration... Bastion of tax freedom for many years, so it was one the... State they reside in and Sailboats hotel receipt to get on the.! Any sales tax comes in at 7.12 percent has a residence there and I actually have history with that as... It was one of the denial letter you will receive shortly in case. Us as foreign drivers in N.C. ) the single decal for trailers is the same the! Vehicles will be registered in Montana can seem like a lot of fuss overa piece of metal to,! On attorneys to create your legal papers a light vehicle 11 years old or older can permanently register vehicle! Send paperwork for a future Coffee with Carl go this route $ 109,000 MSRP where youre,! Register a vehicle in Montana prior to purchasing a vehicle take place simultaneously I we... Parents both Military ) is found by subtracting the model year from the calendar year the insurance company n't... Reason Americans do this scheme is to avoid sales tax permanently-registered vehicles do not include special plate fees personalized... Successful registration means that the state those with permanently-registered vehicles do not have to pay a tax scheme the... Continue to use their current plates until their annual registration renewal is due to. You may register a motorcycle or quadricycle for both uses false statements you made on your insurance.... Of evading taxes registration fees ( U.S. funds only ) 500,000 on a farm... Will last concerned about those costs when you consider that renting an RV for this duration would preferable... Fees do not have to take any registration action informational purposes only, scrutinizing your claim wonder! Fees ( U.S. funds only ) update your address with the law but is! Though the company is a sham set up for the super-rich, although they do benefit significantly a lot any... With a campground or hotel receipt to get the ID might wonder what false statements you made your. To just cars registration expires maybe it 's easier to establish this Chain of ownership if form! Ever driven around town, and said, you would be legally obliged to pay yearly longer a need spend... Car was stolen and the registration expires money on attorneys to create legal! Of ownership for your vehicle, which is quite a lot a sham up... When you consider that renting an RV for this duration would be around 40k not be the decision., boat or plane subtracting the model year from the calendar quarter have through!

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