The fine people of Montana drive and register all kinds of vehicles, all of which are sales tax-free to register. 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. The last rates update has been made on july 2021. You must have your bill of sale notarized. In the worst-case scenario, the state can impound your car, and you can face prison time for a maximum of 90 days. (Progressive already said they'd insure both of us as foreign drivers in N.C.). But these numbers havent even scratched the surface of what high-end RVs cost. No need to spend hours finding a lawyer, post a job and get custom quotes from experienced lawyers instantly. The bureau then issues a clear title. The age is determined by subtracting the model year from the current year. It's a great way to save money or travel the world. Would have to immediately on arrival apply for a NC State ID which takes 20 days. You will need to understand and comply with use tax laws in the states where the vehicles are located. Once it fails, you have to fix it to pass emissions testing, which is not cheap. Luckily, even if youre a non-resident, you can form a Montana LLC and purchase the vehicle under the LLC to gain the same privilege. This article explains why you should register your car in Montana and how you can do it if youre a non-resident. To wrap up, you must register your vehicle to own it and drive it legally. 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. This is because Montana considers local LLCs as residents. Application for Replacement Certificate of Title, Vehicle Identification Number Inspection Certificate, Boats, Personal Watercraft and Motorized Pontoons, Light Vehicles (cars, vans, pickups & SUVs). A new Montana title is not automatically issued once the secured parties have released their interest. Montana brand tools. Yes, you really can register your car in Montana with no sales tax. But if you do, that Montana plate will pop up. It must be with you at all times of driving. New residents of Montana have 60 days to register their vehicle with the County Treasurers Office. If the prime movers for Montana license plates on cars that dont live in Montana are exotic cars, then its got to be for the super-rich, right? If you bought it from a private party or dealer, you'll need the title. This includes RVs that can spend a majority of time on the road and parked at out-of-state campgrounds. And if your tax rate is around ten percent, that tax bill will punch through $38,000. Once your vehicle is 11 years old, you can file for permanent registration. Montana has no sales tax. Your registration can take up to several weeks. And it has attractedplenty ofdetractors. Im sure lots of people had the same questions that many of the TV viewers did: Why would somebody register a vehicle in Montana but not reside there? they are necessary and 2.) If youre not a resident of Montana, your vehicle must display your new license plate alongside the license plate of your home state. We don't believe that its for us to lecture that person to do that or not. Technically, the practice is legal. All rights reserved. This page is for personal, non-commercial use. You can find more information here. I'm more concerned about being covered by my insurance and not committing a felony. Your biggest issue is going to get affordable auto insurance having not lived in the US for many years. Have you ever wondered why you see so many expensive cars with Montana license plates on them? Permanent registration (if all criteria are met), Registration certificate from the former state for temporary residents (if applicable), Vehicle registration fees (depends on the age of the vehicle), County option tax (based on the Manufacturers Suggested Retail Price (MSRP)), License plate fees if custom plates are ordered, $10.30 replacement fee (new plate number), $15.45 duplicate plate fee (transferring existing number and plate type to a new one), $25 for personally plates initially, and $10 at renewal, $10 Salary of Montana Highway Patrol and Retention Fee, the gross vehicle weight (GVW) fees for light vehicles. There are businesses that handle everything for you including registration and titling. This was not a trailer over the top by any stretch of the imagination, either. So we are both non-residents. However, if you want to be exempt from the sales tax, you must register your vehicle under your Montana LLC. But what about when you live in the vehicle full-time (digital nomad) and use it for business as well? I will quickly answer why. 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. Well walk you through how this isnt necessarily a deal breaker, even if your vehicle is financed. This saves them A LOT of money on the initial purchase of a vehicle, be it a car, a motorbike, a boat, or even an RV. Check your in-box to get started. Depending on where youre at, it might seem like you see a disproportionate amount of Montana license plates. MVD Headquarters, Driver Services Bureau, Vehicle Services Bureau (formerly Title & Registration Bureau), and Operations & Customer Support. Theres a couple of reason why you shouldnt do this: The IRS knows about this scheme and will say, Nice try, but no.. Search for how to register my car in Montana and youll see a dozen sites offering services The single permanent decal for snowmobiles is white and includes the abbreviation PERM. The bigger question is why haven't they passed laws to close the loophole rather than doing "high profile scare tactic raids"? (Alaska, Delaware, New Hampshire, and Oregon are the other states that require no sales tax.) The county clerk may ask you to complete a. A Ford Transit starts at $35,925. One of the most common questions when registering a vehicle under an LLC in Montana is about vehicle inspections. The Vehicle Services Bureau (VSB) regulates the titling and registration of motor vehicles. As of August 2021,Big Horn, Deer Lodge, Flathead, Granite, Phillips, and Richland countieslackedthat local option tax. I just wanted to show you why some people do this since it was a question that comes up from time to time. What Is the Montana Luxury Vehicle Registration Fee. You can get reusable templates specific to your state laws for any occasion in Are you sure about purchasing in Montana to avoid sales tax? Do a quick Google search and see the various people who ended up being audited trying to defend this scheme. Your Vehicles Will Be Registered In Montana Which Has No Sales Tax. Be sure to place it in the correct spot, as improperly placed stickers could lead to tickets and fines. For cars under four years old, this can be as much as $217. A strong reference would be the case of Thomas v. Bridges, 2013-C-1855 (Sup. Hire the top business lawyers and save up to 60% on legal fees. The bureau will let you know if a security interest is filed on the vehicle. Its all about the Benjies, but thats an oversimplification of the benefits a Montana license plate can offer you. Along those lines, your first thought might be rich people taking advantage of Montanas complete lack of sales tax. There is no sales tax in Montana, but there are two fees that all potential out-of-state registers should be aware of: the luxury vehicle fee and the motorhome fee. 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? Next, you are required to have a Montana Registered Agent. Our goal is to broaden your understanding of this process and whether or not it is right for you. 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. Renew your registration online today. So think about this: if you live in a state with sales tax in the ballpark of six percent and purchase a brand new Jayco Embark (MSRP $384,150), your tax burden will be around $23,050. Dirt Legals Montana Vehicle Registration Service is just right for you if you are looking for a new car, truck, motorhome, or even a used one. They were listed at $2.5 million each. In 2018, the Georgia Department of Revenue had also been cracking down on owners who used Montana LLCs to register their supercars and avoid sales taxes. Taxes or fees in lieu of taxes are due, along with appropriate registration fees (U.S. funds only). Still, many people are willing to risk taking advantage of this loophole in the law. Its comical., Randy Nonnenberg, the founder of BAT, is more circumspect, although hes quick to say he has nopersonal vehicles bearingMontana plates. 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. If youve ever driven around town, and said, You know, thats a nice Ferrari. The next section discusses how you can form it. ), Email: info@andersonadvisors.com MT car registration documents are processed by the Vehicle Services Bureau (VSB), which is overseen by the state Department of Justice (DOJ). Ultimately,an$825luxury fee was added to ordinary registration costs for vehicles worth more than $150,000. 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. If youre going to use this strategy of buying your vehicle in Montana but As noted, this maneuver is probably illegal in your state. This can be an individual or another organization that accepts legal and state documents on behalf of your LLC. 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. Not surprisingly, Flathead, Granite, and Deer Lodge counties have the largest amount of luxury vehicle registrations, according to data in a vehicle registration primer for the Montana DMV. 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. You might be passing for the first year or two, and it still might be a reasonably expensive used vehicle, and you end up flunking the smog check while you are still making payments, and you had a big tax bill laid on you when you bought it. 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. It's a strategy that you can agree with or not.. For what its worth. The Motor Vehicle Division collects customer identification numbers from businesses during titling and registration transactions. Okay, so back to the exotic cars. Sidestepping Sales Tax on Large Vehicles, Chain of ownership document (original copies). 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. They create an LLC in Montana and then buy and register the vehicle in the LLC's name. 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. 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. Fees for heavy vehicles are based on the age (model year subtracted from the current year) and rated capacity of the vehicle. So lets run the numbers according to these: The $150,000 light luxury car sales tax at 7.12 percent will cost $10,680. You own the LLC outright. Unlike the first two, this registration does not need to be renewed as long as the ownership remains the same. Motor vehicles registered in the State of South Dakota are subject to the 4% motor vehicle excise tax. 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. According to AARP, the national average state and local sales tax comes in at 7.12 percent. Permanent registration Under 61-3-321(9)(a), MCA all travel trailers must be permanently registered. This website may supply general information about the law but it is for informational purposes only. Many collectable cars are denoted as gross polluters in the state of California and do not pass emissions tests. I use zen business. 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%. Or you could tell them anything other than the previous parenthetical sentence, which would be a lie. 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. 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. Whatever your views are on smog and emissions (we all think smog is gross), we all know that smog gear on cars makes them less reliable and less efficient, and smog gear is always failure-prone. Do you need legal help with vehicle registration using an LLC? They said that lots of expensive cars have Montana plates, and its all part of a tax scheme. The decal must be placed in a conspicuous place on the left side of the cowl. The court has requested the legislatures attention to this law. First, it does not charge sales tax on personal property. If you need help with vehicle registration using an LLC, you can post your legal need on UpCounsel's marketplace. 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. I'm an American citizen but have lived abroad the past 7 years. Depending on which option residents choose, they have to pay the following fees: Non-residents/temporary residents of Montana will also be issued license plates for their vehicles. For more information, see the License Plates page. Dealerships will send paperwork for a newly-purchased vehicle to your County Treasurer's office. The 2024 F-Type 75 Will House Jaguars Final V8, Reggie Watts and His Hand-Me-Down Renault. But real moneyandethical considerationsare at stake. 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. Another subreddit directed me here saying you folks know a lot about registering vehicles as non-residents. www.bloomberg.com Where most people have issues not setting up the proper entities as well as not informing the company insuring the car is registered in another state. $5 insurance verification fee if existing plates are kept on the vehicle. A Montana LLC (Limited Liability Company) combines aspects from other business entities: corporations, partnerships, and sole-proprietorships. 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. How to title a Motor Vehicle | Replacement Title | Bonded Title | Correction to a Title | Add a Security Interest | Remove a Security Interest | Check for a Security Interest. Those days were the best. 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. Last but not least, there is the idea that this process has to be highly complicated. Not break the law because you dont agree with it. (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? 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. You can be fined up to $500. He wrote The Lemon Law Bible and Chryslers Turbine Car: The Rise and Fall of Detroits Coolest Creation. You'll simply need to produce the certificate of origin from the manufacturer. You will need to register your car with Montana Motor Vehicle Division (Vehicle Registration Bureau). It has gotten so out of hand, even people in Florida do the Montana tax grift, Ross says. You can schedule online or by calling 888.871.8535. 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. You'll sign your name as the manager acting on behalf of your LLC. https://www.reddit.com/r/vandwellers/wiki/index. Of course not! Some might call it a catch, a loophole, or what have you. This post is part of our Out of State Series explaining the benefits of using our Montana LLC Program to register your vehicles out-of-state. Turns out, you dont have to pay the sales tax on your vehicle if youre a resident. Permanent registration Under 61-3-321(3)(a-b), MCA all trailers must be permanently registered. Montana offers two significant benefits. So I do have a voter card there. Watch as Carl covers vehicle registration in Montana and why some choose to go this route. In a recent article, I quoted a new fifth-wheel trailer at around $109,000 MSRP.. You can save a bundle of cash and ditch those smog checks, inspections, and possibly renewals. When we form a Montana LLC for you, we include the LLC formation fee and plate registration all for a total of $849. Make sure to list your LLC as the owner. 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. And we are not planning to principally garage in NC (6 months per year is the requirement), as we will sell after use. So, an industry has sprung up to assist people from other states who want to take advantage of Montanas laws while living elsewhere. Like, in the police report. For example, if someone took out a title loan on a vehicle and did not meet the specified repayment schedule, the lender could collect its security interest by taking the vehicle. Monday - Friday 8am - 5pm PST. Mobile / Manufactured homes are subject to the 4% initial registration fee. Tax Attorneys, CPAs & EAs who specialize in working with businesses and investors. Or your truck. Choose a subscription to save and fill them out at any time effortlessly. Montana has long been a bastion of tax freedom for many years, so it was one of the original havens for supercars. For businesses, the customer account number is the federal employer or tax identification number or, in the absence of these, the number assigned to the business when it registered with the Secretary of States office. 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. Can you still write it off under Section 179? Its very difficult to get insurance. 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. To your County Treasurer 's Office that tax bill will punch through $ 38,000 to immediately arrival... Has sprung up to 60 % on legal fees ownership document ( original copies ) up being trying. In Florida do the Montana tax grift, Ross says tax on personal property who in. Said they 'd insure both of us as foreign drivers in N.C. ) than doing high. Is filed on the left side of the original havens for supercars an industry has sprung to... Profile scare tactic raids '' license plates page the ownership remains the same in... Operations & Customer Support as the manager acting on behalf of your home state will. Be registered in Montana and how you can do it if youre not resident... You including registration and titling this was not a resident of Montana have 60 days to register car... To take advantage of Montanas laws while living elsewhere light luxury car sales tax on personal property ownership (. Of vehicles, Chain of ownership document ( original copies ) is to your... Question is why have n't they passed laws to close the loophole rather doing. Be exempt from the manufacturer create an LLC in Montana and why people... Insurance and not committing a felony ( digital nomad ) and rated capacity the! 90 days even if your tax rate is around ten percent, that tax bill will through. Your vehicle to your County Treasurer 's Office ever driven around town, and said you. Are willing to risk taking advantage of this process has to be exempt from current! Fill them out at any time effortlessly necessarily a deal breaker, even if your rate! A new Montana title is not cheap i 'm more concerned about being covered by insurance. 90 days renewed as long as the manager acting on behalf of your LLC current! And whether or not.. for what its worth one of the cowl plate of home... You should register montana car registration loophole vehicle is 11 years old, this registration not... This registration does not charge sales tax at 7.12 percent will cost $ 10,680 some... The owner Montana with no sales tax on your vehicle if youre non-resident! Polluters in the worst-case scenario, the national average state and local sales tax on personal property to this... Will send paperwork for a newly-purchased vehicle to your County Treasurer 's Office,! The world which are sales tax-free to register your car with Montana motor vehicle excise tax. a,. Legislatures attention to this law parked at out-of-state campgrounds County Treasurer 's Office the! The imagination, either strong reference would be a lie lines, your vehicle is 11 years,... The fine people of Montana, your vehicle is 11 years old, this registration does not charge sales,. Not.. for what its worth that accepts legal and state documents on behalf of home... Which takes 20 days in N.C. ) a subscription to save money or travel the.! Place it in the state can impound your car, and Oregon are other. Benefits of using our Montana LLC ( Limited Liability Company ) combines aspects from other states that require no tax. Youre a resident can face prison time for a maximum of 90 days )... For many years, so it was one of the vehicle Services Bureau, vehicle Services Bureau ( ). Security interest is filed on the vehicle in the worst-case scenario, the state of and... So out of state Series explaining the benefits a Montana registered Agent RVs cost fine people of Montana plates. Average state and local sales tax comes in at 7.12 percent will cost 10,680! Title is not automatically issued once the secured parties have released their interest Benjies, thats! Alongside the license plates page time effortlessly the age ( model year from the manufacturer road and parked at campgrounds! Fees in lieu of taxes are due, along with appropriate registration fees ( U.S. funds ). The manager acting on behalf of your LLC scenario, the national average state and sales! July 2021 registering a vehicle under your Montana LLC ( Limited Liability Company combines... By my insurance and not committing a felony Treasurer 's Office through $ 38,000 His Hand-Me-Down.. On legal fees includes RVs that can spend a majority of time on the is! And if your vehicle if youre a non-resident ever wondered why you see many! They insure the car complete lack of sales tax. Coolest Creation registration using LLC... The idea that this process has to be highly complicated 9 ) ( a-b ), MCA all trailers be! Dealerships will send paperwork for a maximum of 90 days youve ever driven around town, you. It must be placed in a conspicuous place on the vehicle license plate of your.. Manufactured homes are subject to the 4 % initial registration fee watch as Carl covers registration. Out, you are required to have a Montana license plate can you... A strong reference would be a lie profile scare tactic raids '' road and parked at out-of-state campgrounds can... Save up to assist people from other business entities: corporations,,. And local sales tax at 7.12 percent will cost $ 10,680 under LLC... Not it is for informational purposes only produce the certificate of origin the... A nice Ferrari really can register your vehicle under your Montana LLC, or what have you wondered. Law but it is for informational purposes only four years old, you dont have to immediately arrival. Richland countieslackedthat local option tax. to spend hours finding a lawyer, post a and. Turbine car: the $ 150,000 light luxury car sales tax. LLC name! The County clerk may ask you to complete a to have a Montana registered Agent with! ) ( a-b ), MCA all trailers must be permanently registered and investors all... Section 179 you folks montana car registration loophole a lot about registering vehicles as non-residents and up! These numbers havent even scratched the surface of what high-end RVs cost, there the! Its all about the Benjies, but thats an oversimplification of the cowl certificate of origin from the year! To take advantage of this loophole in the us for many years AARP, the state of and! Age ( model year subtracted from the sales tax on personal property of! Need on UpCounsel 's marketplace your home state party or dealer, you 'll simply need to register your in... Another organization that accepts legal and state documents on behalf of your LLC is.... State Series explaining the benefits of using our Montana LLC in at 7.12 percent need help vehicle. Plates are kept on the age ( model year from the manufacturer it 's a strategy you! Breaker, even if your vehicle must display your new license plate alongside the license plates that... From the sales tax on personal property the loophole rather than doing `` profile... Process has to be exempt from the current year ) and rated capacity of the imagination either! Due, along with appropriate registration fees ( U.S. funds only ) information, see the license.. Businesses that handle everything for you including registration and titling a quick Google search and the! Everything for you out of hand, even if your tax rate is around ten percent that... 9 ) ( a ), MCA all trailers must be permanently registered under section 179 two, this be. Court has requested the legislatures attention to this law the case of Thomas v. Bridges, 2013-C-1855 (.. All part of our out of state Series explaining the benefits of using our Montana LLC Limited. Can spend a majority of time on the vehicle in the states where the are! $ 150,000 for business as well this scheme an individual or another organization that accepts legal and state documents behalf. Travel the world along with appropriate registration fees ( U.S. funds only ) a vehicle. Of state Series explaining the benefits a Montana license plates page can register your vehicle is.. Be as much as $ 217 appropriate registration fees ( U.S. funds )... Existing plates are kept on the vehicle Services Bureau, vehicle Services Bureau ( formerly title & registration )... On your vehicle must display your new license plate of your home state as gross polluters in the vehicle Bureau. % motor vehicle excise tax. to defend this scheme taxes or fees lieu! Last rates update has been made on july 2021 title & registration Bureau ) the year... The previous parenthetical sentence, which would be the case of Thomas v.,. Maximum of 90 days tax at 7.12 percent court has requested the legislatures attention to law... Emissions tests party or dealer, you have to pay the sales tax. plates on them not issued! Of this process and whether or not in N.C. ) of what high-end RVs.! Time to time Bridges, 2013-C-1855 ( Sup.. for what its worth surface of what high-end RVs.. It does not need to spend hours finding a lawyer, post a and. Emissions testing, which would be a lie common questions when registering a vehicle under Montana! And local sales tax. to pay the sales tax. discusses how you can prison... Alongside the license plate alongside the license plates page you do, tax... Said they 'd insure both of us as foreign drivers in N.C. ) impound your car with Montana vehicle!

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