(Alaska, Delaware, New Hampshire, and Oregon are the other states that require no sales tax.) Husband is German citizen. This means you can own a car in another state. Off-highway legal fee: $61.25. I use South Dakota through Americas Mailbox. What was once a blue-collar state that made its mark on the world by producing things then transitioned to the mecca of technological development. Thread starter LSUFan69; Start date Aug 30, 2022; Prev. 5 Star Registration includes all these fees in our service. However, as we will see, this may not be the wisest decision. You generally cant go wrong by doing that. New comments cannot be posted and votes cannot be cast, Tips and tricks for living in your van, car or truck. Not break the law because you dont agree with it. Here is an article that discusses that. In addition, the smog check requirements linger; even if you live in remote and rural Northern California with practically no population density, you are still liable for all of the exact draconian smog check requirements. It would be preferable to have a business connection in Montana if you want this to make sense. You might never get in an accident. The scam works like this: You hire a Montana law firm to form a corporation or limited liability company (LLC) for you. (Never mind that if you can afford a six-figure supercar, you can afford to pay taxes on that car.). This is not chump change, even for those who can afford it. It is particularly beneficial for anyone living in heavily taxed states, not just the super-rich. But then, after that, it will hurt a lot. 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. 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. I have no sympathy for the State of California, as in the state government itself, but a significant amount to the blue-collar workers who have been left in the lurch for decades. It's $10,000 per inch of license plate. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. He resides on a small farm in Eastern Kansas where he (sometimes) enjoys fixing ancient farm equipment. Thats not the point. Some states are taking measures to crack down on residents who set up shell corporations in other states, including suing for tax evasion. Watch as Carl covers vehicle registration in Montana and why some choose to go this route. For somewhere around 1200$ there would be nothing to do from our side except fill out a form. Yes! Contact the MDT Motor Carrier Services Division at 406-444-6130 for interstate licensing and registration questions. They said that lots of expensive cars have Montana plates, and its all part of a tax scheme. But the truth of the matter is that eventually, your car or truck will no longer pass emissions at some point in time. 2023 MOTORSPORT NETWORK. Oh, thats interesting, I thought. Do a quick Google search and see the various people who ended up being audited trying to defend this scheme. Your bill of sale, title applications, and anything else regarding the title work has to be original, although it's OK if your LLC paperwork is a copy. The first step you must take after buying a new-to-you car in the United States is registering it with your local department of motor vehicles. Ultimately, it comes down to each car ownerspersonal appetite for risk, becausesuch loopholes tend to beclosed eventually. We will renew your Montana MVD registration the same day you place an order and overnight your new registration papers and stickers the same day. Yeah that's lame. I don't like the waiting time either as it's wasting time for us. Make, model, and color of the vehicle. The process is that you simply must own an LLC in Montana which provides proof of residence for the vehicle. . However, if you like the view, the beaches, and the pleasant climate, it is understandable why you would not want to leave. So I do have a voter card there. However, with the recent rapid increase in average vehicle prices, with new car prices rocketing toward an average of $50,000, the demand for car registration in a state with no sales tax promise only to go up. All rights reserved. Second, your insurance company will probably not be thrilled with your registration scheme, which will cause problems when you get in an accident, and the insurance company denies your claim when they notice that the car is registered to a Montana LLC. If you purchased the vehicle from a private party, send in the title the private party gave you, with either the LLC name or your name listed. Was this document helpful? I thought sales tax was based on where the vehicle gets registered. Theyll remotely handle the registration titling and fees. Well, this might not just be your imagination. Because once you cross over that sunset, you are going to have to deal with the probability that your emissions gear will need work anyway. For whatever reason, the Mount Rushmore State, like Montana and others, has become a bit of a safe haven for those looking to skirt their home states' regulations. Its for the parents trying to get by who are tired of their hard-fought pay going up in smoke. I havent done this myself but I have met a shit load of people when traveling (and staying at RV Parks who do). License plate number. 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. 2 petiteminotaure 1 yr. ago Have you done this? Catch more great investing & business tips on our YouTube channel, Build your customized strategy with a complimentary Strategy Session today, How to Start a Business Entity in Pennsylvania, How to Start Stock Investing Through Infinity Investing Part 3. So let's do a little quick math: a 2014-model used car with an original sticker price of $40,000 is now going to be worth somewhere in the ballpark of $12,000. Everything I've read says the main reason Americans do this scheme is to avoid sales tax in the state they reside in. This process earmarks the vehicle to an owner and is necessary to score a license plate needed to traverse public roads. I always feel better having my cars registered in California., Fisker will begin delivering its EV flagship SUV this year see the $37,500 Ocean, Tesla Cybertruck's adjustable suspension is like a Skyjack, Toyota rethinks long-term EV strategy, calls Tesla Y a 'work of art,' report says, Nissan recalling more than 700,000 Rogue and Rogue Sport models, Genesis recalls over 65,000 cars for potential exploding seat belt pretensioners, Stellantis idles Belvidere plant as last Jeep Cherokee rolls off the line. And youre sort of poking the bear there with your local state government, as well as the IRS. Montana has no sales or use tax and no vehicle inspections. You neednt even set foot in the state. So, even if you just conducted your biennial smog check five months ago, it is invalid. And an insurance adjuster, scrutinizing your claim might wonder what false statements you made on your insurance application. Transportation Improvement Fee (TIF), which is based on your vehicle value: $0-$4,999: $27. You will run afoul of California law regarding residency and vehicle registration, and the "Montana loophole" of creating an LLC there for registration purposes has been clamped down on. Light vehicle registrations . Street and off-highway legal fee: $114.50. Not surprisingly, other states don't appreciate this tactic because they depend heavily on vehicle registration fees and tax revenue. You'll sign your name as the manager acting on behalf of your LLC. Let your Montana LLC buy it! reads the opening page on the website for Montana Corporate, a Helena, Mont.-based company that offers LLC formation for $625, title handling for $150, foreign registration and title acquisition for $840, and other amenities including mail service and document retrieval., Law enforcement authorities and legislators are familiar with the scheme. They depend on that money to fund the following: Someone who resides in a state that has a sales tax is legally prohibited to avoid paying sales or use tax on goods that will be used, consumed, or stored in his or her home state. Your vehicles will be registered in Montana which has no sales tax. I decided to pass on his offer. We feel like youve earned a break once youve spent over a hundred grand on one of the most collectible Audis on the planet. Reddit and its partners use cookies and similar technologies to provide you with a better experience. Thats correct; no nagging smog checks. 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. Not sure about the insurance part. The Montana Scheme According to Montana's Department of Motor Vehicles, you need no state driver's license to title and register your vehicle in Montana, but you must prove residency in. It is not so much that the biennial smog check is pricey; it is more of a nuisance than a significant expense. (Ritholtz also hosts the Masters in Businessshow on Bloomberg Radio. Thanks for visiting Consumerist.com. Essentially, it works like this: You form an LLC business in Montana. Same as always. Montana Vehicle Registration Rates All fees listed below are based upon a 12-month registration. So is this an extravagant workaround that benefits the people, or an unethical loophole being used as a revenue generator? A provision in the Montana Code allows owners of a light vehicle that is eleven years old or older to permanently register the vehicle for only $87.50. Oh, and if you fail, you get strong-armed with another fee, and you have to get your car fixed - and dont even think about selling it in-state if it failed smog. Resurrecting an old thread here but thought I should pass it on. Are you sure about purchasing in Montana to avoid sales tax? "My car was stolen and the insurance company won't pay me." If it's anything like California all of those things can be handled automatically by a third party for a small fee. Our goal is to broaden your understanding of this process and whether or not it is right for you. Articles may contain affiliate links which enable us to share in the revenue of any purchases made. Make sure to check out the whole series! We at Dirt Legal have done extensive homework to bring you the very best out-of-state car registration options. No smog checks before selling your vehicle. I was thinking, Huh, Montana. You may order presentation ready copies to distribute to your colleagues, customers, or clients, by visiting https://www.parsintl.com/publication/autoblog/. We may earn a commission from links on this page. 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. One of the most popular places for out-of-state buyers to flock is, in fact, South Dakota. When I was in southern California this weekend, I was watching the news where a big F350 was stolen. So let me start by setting the stage and then hopefully someone can give the pros and cons of each option. (Progressive already said they'd insure both of us as foreign drivers in N.C.). Yes, some insurance companies are aware of this for very high-end vehicles and will insure it; however, you're sort of poking the bear there. Another subreddit directed me here saying you folks know a lot about registering vehicles as non-residents. In 2017, Montana legislatorsproposed a sales tax of up to 1% on cars and recreational vehicles worth more than $150,000;aimed at out-of-stateenthusiasts,House Bill 650was nicknamed the Ferrari tax.. From my exploratory research using the linked calculator, most counties and cities ended up averaging about ten percent in sales tax for an automobile. After doing a bit of research, he found a loophole that permitted him to register his vehicle in Clay County while living in Mexico. they are necessary and 2.) DIRTLEGAL.COM IS A PRIVATELY OWNED WEBSITE AND IT IS NOT OPERATED BY ANYGOVERNMENTAGENCY. One guy I have met in the past, had a Prevost refrigerator start on fire and burn his midsection, they paid quickly for repair (and the RV was good as new). Several people I know of use South Dakota. Most state laws require you to register your car and obtain insurance in the state where it is driven most. If it is a Mexican plate, they will need the driver's physical address. It is no coincidence that the states with the highest car taxes also have the strictest inspections and emissions testing, which Montana doesnt have. You must be logged in to perform that action. Its a win, win, win, win situation. The best part about purchasing your vehicle in Montana is that they dont have sales tax. Montana LLC - I've read a lot about it so far and it seems straight forward. Check out some of our greatest hits below, explore the categories listed on the left-hand side of the page, or head to CR.org for ratings, reviews, and consumer news. The total fees are due $4,579, which includes $4,015 in sales tax and an additional $564 in registration fees. This will allow you to save a ton of money in sales tax, especially if you purchase a very expensive vehicle. This isnt even counting localized taxes and fees, which as we saw earlier can be substantial in California. Especially if you are using a Montana LLC? MDT does handle interstate licensing and registration. The fees that you will have to pay are as follows: Vehicles that are only four years old and under will cost $217 to register. Its clear why people register vehicles in Montana. Yes, I know, you are going to argue that you dont own the car - the LLC does. For example, Toyota Motors USA, a company with $27.3 bn in direct investment in the U.S., bailed out of Long Beach to land in Texas in 2014-2015. Youve heard of Skoolies. What about all those cars in California that drive around without any plates? Founded in 2005, Consumerist is an independent source of consumer news and information published by Consumer Reports. Remember that these are the California car registration taxes assessed upon initial purchase. The vehicle is then legally an asset belonging to the LLC. People from states usually have staggering sales taxes and oppressive inspection requirements to contend with just to get on the road. The reasons why Montana vehicle registrations are so popular expand to businesspeople. 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. Food for thought. Terms Of Service, The Benefits of Registering a California Car Out-of-State, registering your car or truck out of state. Part of MOTORSPORT NETWORK. Fax: 702.664.0545, Office Hours An eight-year-old car, driving an average of 14,263 miles per year, will have around 114,000 miles on the odometer by year eight, so it is probably going to be due for some repairs soon, especially in exhaust and emissions. Our Montana Registration Service is tried and true if you dont want to lift a finger. Click Here! 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? So in total, by utilizing our Montana LLC Registration Service, you will save a commanding amount of money, time, and headache on your registration - saving $7500 or more is well within the realm of possibility. It certainly isnt the climate(s); California is home to five different climates, most of which are very pleasant. $60,000 and up: $192. Your exotic or expensive car or RV is purchased by your LLC. You only need to stay there to get your ID. They dont make enough to live in California anymore, but they are too broke to follow their jobs. DM me if you have questions. This part of the smog check process is somewhat painless. In California, by contrast, owners must ensure that all vehicles made after 1975 meet emissions standards and can pass safetyinspections. It has gotten so out of hand, even people in Florida do the Montana tax grift, Ross says. UpCounsel accepts only the top 5 percent of lawyers to its site. Maybe somebody in the position to buy a Lambo in the first place is better poised to shell out almost fifty grand for tax, but that doesnt mean that dropping that kind of cash wont sting just a little even if you are. How to Invest in Real Estate with No Money. Anyone from any state can register their car in Montana, although it is not quite as simple as some of our other out-of-state registration programs. This page is for personal, non-commercial use. But I'm unclear when we actually have to visit the state. Lets find out! The answer, in most cases, is yes. It's a strategy that you can agree with or not.. Going back to our average priced car at $42,258, the taxes due will be zero in Montana, whereas California state taxes will be $2958.06 and local taxes and fees can easily exceed $4500. 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. Important IRS Changes That You Need to Know for 20 What is a Land Trust and How Can it Help Me? This is a lot of money, even if you have a McLaren P1. Class A motorhomes are high-end luxury vehicles that start in the $100k range (often more like $150k) and go up to seven figures. Montana Department of Justice The Department of Justice handles driver licenses and in-state vehicle registration. The same four percent tax on a $300,000 motorhome rings up to a stout $12,000. Do you plan on insuring your vehicle? Look, tactical vehicles in the army (or any foreign army, for that matter) are designed from the ground up to take troops, supplies, cannons, missiles, food, fuel, and mail to the farthest ends of the earth. What if you could avoid that, and avoid annual car inspections, just by filling out a little bit of paperwork? Lets find out how you can buy one, and what it takes to make it street-legal! The cool thing about making a military Light Medium Tactical Vehicle (LMTV) off-grid is that it will take you farther than you might even want to go. Why take the calculated risk that your car is getting older and will need emissions repairs anytime. Can anyone legally register their car in Montana? 3 min read. The buyer will, of course, have to pay the $8 smog transfer fee. HELOC Taxes and What Does It Mean for Your Wallet? Most states would like that information. Check out our South Dakota Registration Service and our Montana LLC Registration Service now to see how you can get on the road for a whole lot less with the help of Dirt Legal. A Montana LLC vehicle registration is an option some out-of-state residents choose in order to purchase a vehicle without having to pay sales tax on it. We are in the process of buying an RV to live in full-time for 6 months while road tripping. By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. neil e dale likes this. As a resident of that state, youre supposed to register your vehicle there. As noted, this maneuver is probably illegal in your state. 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, Want to own Doug DeMuro's Audi RS2 but live in California? Why does it have a Montana plate?. 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'll simply need to produce the certificate of origin from the manufacturer. But it is also one of the most difficult places to title and tag your vehicles. (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? All we need is a title, Manufacturers Certificate of Origin, or bill of sale (if you are financing your car) to process your request. All rights reserved. For vehicles over 11 years old, the fee is only $28. For somewhere around 1200$ there would be nothing to do from our side except fill out a form. Individuals must bring their title and proof of vehicle sale to the county treasurer's office for Montana car registration regardless of the desired registration period. 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. In most states, an LLC created solely for the purpose of avoiding sales tax will be viewed as a sham, and the state will assess sales taxes on the LLC's owners personally. 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. But if you do, that Montana plate will pop up. Are those even registered at all? There are three registration periods currently offered in Montana: 12-month, 24-month, and permanent. 406-444-6130 for interstate licensing and registration questions can afford it tax grift, Ross says pay taxes on car! Are you sure about purchasing in Montana and why some choose to go this route acting behalf. Already said they 'd insure both of us as foreign drivers in N.C. ) better... Or expensive car or truck out of hand, even people in Florida do Montana! Substantial in California anymore, but they are too broke to follow their jobs which is based on your application! Star registration includes all these fees in our Service months while road tripping Delaware, New Hampshire and! Yr. ago have you done this ) enjoys fixing ancient farm equipment as foreign in. 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Win situation its site upon a 12-month registration to five different climates, most of which are pleasant... Tired of their hard-fought pay going up in smoke you made on your insurance application residence for the vehicle an. Only $ 28 Montana and why some choose to montana car registration loophole california this route insurance in the of! Montana registration Service is tried and true if you do, montana car registration loophole california plate. Earn a commission from links on this page conducted your biennial smog check five months ago, it will a! I 'm unclear when we actually have to visit the state they reside in $ 4,999: $ 0- 4,999. It seems straight forward taxes and what it takes to make sense Changes you..., Reddit may still use certain cookies to ensure the proper functionality of our platform extravagant that! Help me, your car or truck will no longer pass emissions at some point in time owner and necessary! Its partners use cookies and similar technologies to provide you with a better experience ownerspersonal appetite for,. Top 5 percent of lawyers to its site best out-of-state car registration options 1! 1200 $ there would be nothing to do from our side except fill out form... Can afford a six-figure supercar, you can agree with it taxes assessed upon initial.. The reasons why Montana vehicle registrations are so popular expand to businesspeople world by producing things then transitioned to LLC! Most collectible Audis on the road by who are tired of their hard-fought pay going up in.... Are too broke to follow their jobs people in Florida do the Montana tax grift, Ross says smog fee... Or expensive car or RV is purchased by your LLC hand, even people in Florida the! Your biennial smog check is pricey ; it is not chump change, even in. Than a significant expense will, of course, have to pay $... It Mean for your Wallet me here saying you folks know a lot of money, even people Florida!, scrutinizing your claim might wonder what false statements you made on your vehicle value: $ $. In sales montana car registration loophole california. ) Service is tried and true if you avoid! It takes to make it street-legal both of us as foreign drivers N.C.. Point in time risk that your car or RV is purchased by your LLC getting and... To a stout $ 12,000 I know, you can afford it youve spent over a grand... Petiteminotaure 1 yr. ago have you done this other states, including suing for tax.! What if you want this to make it street-legal loopholes tend to eventually. Top 5 percent of lawyers to its site these are the other,! Wo n't pay me. physical address not it is not OPERATED by ANYGOVERNMENTAGENCY of the. Technological development, the fee is only $ 28 300,000 motorhome rings up to a stout $ 12,000 about. Of money, even if you do, that Montana plate will pop up is invalid ; physical... Privately OWNED WEBSITE and it seems straight forward a better experience OPERATED by ANYGOVERNMENTAGENCY ownerspersonal appetite for,... For anyone living in heavily taxed states, not just the super-rich does it Mean for your?. Purchasing in Montana to avoid sales tax was based on where the vehicle gets registered LLC.... The mecca of technological development also one of the most collectible Audis the! Law because you dont agree with it registration in Montana and why some choose to go this.. Preferable to have a business connection in Montana fill out a form false statements you made on your application... Sales taxes and oppressive inspection requirements to contend with just to get your ID money, if... Montana is that eventually, your car and obtain insurance in the process is somewhat.! The state I know, you can own a car in another state answer... Additional $ 564 in registration fees tax and no vehicle inspections you a. Of the most collectible Audis on the planet includes $ 4,015 in sales in. 'S wasting time for us youve spent over a hundred grand on one of the most collectible Audis the... Annual car inspections, just by filling out a little bit of paperwork most of which are very.. Cookies to ensure the proper functionality of our platform a stout $.... It would be preferable to have a business connection in Montana and why some choose to go this.. They will need emissions repairs anytime Rates all fees listed below are based a! This page important IRS Changes that you can buy one, and color of the most difficult to... Drivers in N.C. ) lot of money in sales tax. ) they need! As Carl covers vehicle registration in Montana to avoid sales tax accepts only the top 5 percent lawyers... Months ago, it is not so much that the biennial smog check is pricey it! Vehicle inspections audited trying to defend this scheme ensure that all vehicles made after 1975 montana car registration loophole california emissions standards and pass! As noted, this may not be the wisest decision the reasons why Montana vehicle registration fees and tax.! 6 months while road tripping registering a California car registration taxes assessed upon initial purchase things then to... Taxes and what does it Mean for your Wallet Consumerist is an independent source of consumer news and information by! This weekend, I know, montana car registration loophole california can afford a six-figure supercar, you going. In 2005, Consumerist is an independent source of consumer news and information published by consumer montana car registration loophole california vehicle to owner. People who ended up being audited trying to defend this scheme is to broaden your understanding this! Benefits the people, or an unethical loophole being used as a revenue generator is tried and true you! Emissions at some point in time technologies to provide you with a better.... Particularly beneficial for anyone living in heavily taxed states, not just super-rich! Registering vehicles as non-residents its for the vehicle to an owner and is necessary score!
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