Here you can find 12 years worth of articles on everything from how to avoid dodgy scams to writing an effective complaint letter. It's easier to establish this chain of ownership if you form an LLC in Montana prior to purchasing a vehicle. Once it fails, you have to fix it to pass emissions testing, which is not cheap. HELOC Taxes and What Does It Mean for Your Wallet? As noted, this maneuver is probably illegal in your state. The Pitfalls Of The Montana License Plate Scam [The Garage]. Also, since you will be registering from out-of-state, we offer a service for annual renewals for only $119. 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. If this alone were the determining factor, you still come out ahead titling and registering your car in South Dakota. You must be logged in to perform that action. 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 treasurer's office. The basic concept of the process is known to many, but the specifics are a little harder to nail down. 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. So for your very-average priced new car ($42,258), you are going to pay somewhere in the order of $4,200. Thats correct; no nagging smog checks. This is a lot of money, even if you have a McLaren P1. Then there are the tax issues. The following cars are exempt from smog testing in California: Vehicles 8 years old or newer when paying a Smog Abatement Fee, Natural gas vehicles weighing over 14,000 lbs. Montana offers two significant benefits. California is home to some of the most beautiful landscapes in the world. They were listed at $2.5 million each. Got an idea for a future Coffee with Carl? $60,000 and up: $192. The best part about purchasing your vehicle in Montana is that they dont have sales tax. Now, the question is: Should you do this? At the time, theBozeman Daily Chronicleestimated that the proposed tax could raise $2.5 million annually for the state. As it turns out, Barsketis was onto something. 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. Well, what kind of insurance do you need if you are registering you whip out of state? Now, you can look into registering your next vehicle in a sales-tax-free state with low licensing fees and no inspection requirements saving you hundreds of thousands in the long run. You get a Skoolie-toy hauler hybrid that has no name. When you sign the bill, complete the buyer section the same as you would a Montana title application. 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? We may earn a commission from links on this page. For cars under four years old, this can be as much as $217. Register and Title in NC. Its for the parents trying to get by who are tired of their hard-fought pay going up in smoke. 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. Please follow the instructions below to enable JavaScript in your browser. He got his B visa and we will arrive in the U.S. on March 5 in North Carolina. That said, when the Rapid City Journal reached out to the department in 2018, it "estimated" an annual take of nearly $7 million. No, You Shouldnt Incorporate And Register Your Car Tax-Free InMontana, Chicago Will Have The Highest Sales Tax In The U.S. At 10.25%, States Hungry For Online Sales Tax Looking At Challenge To South Dakota Law, 5 Ways To Improve Your Finances With Minimal Effort, Beverage Industry Takes Philadelphia To Court Over Soda Tax, Oregon Testing Pay-Per-Mile System As An Alternative To States Gas Tax, College-Bound Students Can Fill Out Their FAFSA Forms 3 Months Earlier Starting NextYear, Michigan lemon law attorney Steve Lehto explains, The Pitfalls Of The Montana License Plate Scam. 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. You'll sign your name as the manager acting on behalf of your LLC. Toby is an attorney on a mission to help investors and business owners keep and grow more. 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. Even after the $480 sales tax plus our reasonable fee of $349 (at time of writing), you are at $829, still around $400 less than just the sales tax for that car in California. It costs you about $1,000 to have a Montana law firm set up your LLC and do the registration and titling paperwork and send you back the Montana license plates. Your LLC then purchases the car as your company car. Your corporation doesnt exist for any reason other than to own your car, and you only owe Montana registration fees and a payment to the lawyers to keep your corporation registered. Location where it was observed (including street and city). The debate about registering a car in Montana can seem like a lot of fuss overa piece of metal. In summary: try being honest and paying the taxes you owe. Thats not the point. Its not a red flag; its something to note, he says. 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. Search for how to register my car in Montana and youll see a dozen sites offering services to help clients form LLCs. 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). Do you need legal help with vehicle registration using an LLC? The Montana vehicle registration process has been generating buzz for years; it is nothing new. Imagine you've bought a 2022 Corvette Stingray for $70,000 in Florida, where the sales tax rate is 6%. When I was in southern California this weekend, I was watching the news where a big F350 was stolen. I'm not military so it would be the latter. 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. The California Air Resources Board is the lead agency for the smog check program in the state. The highest number of non-resident vehicle registrations is credited to Pennington Countyin total, 19,661 of the 186,761 vehicles registered to the county in 2018 stemmed from out-of-state residents. The same four percent tax on a $300,000 motorhome rings up to a stout $12,000. As of 2018, there were 58,334 out-of-state vehicles registered with the Department of Revenue's Motor Vehicle division which represent nearly five percent of all 1.2 million vehicles currently titled in South Dakota. Car owners from Mendocino, Calif., to Miami aretitling collectible cars in Montana, evenespecially, in factif they dont live there. Call it what you want, if it's registered legit and you have residence or a business in that state your good. The LLCs offer RV insurance also. You can save a bundle of cash and ditch those smog checks, inspections, and possibly renewals. But, why again do you have to pay a fee for a service they dont require? Home blog Shows Coffee with Carl Should I Register My Vehicle in Montana? Nearly every service and commodity in the state are higher than the rest of the nation, and car registration is absolutely no exception. Ready to hit the road? Why does it have a Montana plate?. 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. The Montana Plate Tax Loophole superspeedersRob 807K subscribers Join Subscribe 4.7K 214K views 5 years ago Its easy to get angry and rich people who look like they aren't paying their fair. Not surprisingly, other states don't appreciate this tactic because they depend heavily on vehicle registration fees and tax revenue. Theyll remotely handle the registration titling and fees. 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. 5 Star Registration includes all these fees in our service. We are in the process of buying an RV to live in full-time for 6 months while road tripping. By going this route instead of buying it as an out-of-state resident, they avoid hefty sales taxes. I use zen business. DIRTLEGAL.COM IS A PRIVATELY OWNED WEBSITE AND IT IS NOT OPERATED BY ANYGOVERNMENTAGENCY. 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. This scheme doesnt really pay off if youre buying a used 2004 Camry, but its tempting if you want to buy a six-figure supercar. Moreover, you cannot sell the vehicle in California unless you have a passing smog check. Montana has long been a bastion of tax freedom for many years, so it was one of the original havens for supercars. Every Montana LLC is managed per the clients need. So, on top of the issue of a depleted job market for the middle-class, housing costs are primarily unaffordable for those same people. You neednt even set foot in the state. Fax: 702.664.0545, Office Hours This does not include the California car registration fees, nor does it include the smog check. With this piece of knowledge, you are most certainly going to be dragged into smog check your car every other year for eternity. Besides having no sales tax in Montana, the other advantage is that Montana doesnt have vehicle inspections; therefore, you dont have to drive to Montana every year. The practice is so popular that there are even companies with the sole purpose of facilitating out-of-state vehicle registrations in South Dakota. But I'm unclear when we actually have to visit the state. In a recent article, I quoted a new fifth-wheel trailer at around $109,000 MSRP.. We'd do this in my husband's name as I don't want to be committing tax fraud in some way as a U.S. citizen. But it is also one of the most difficult places to title and tag your vehicles. 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. If your name not the LLC name is on the title (likely because you bought it before forming your LLC), you'll have to establish a chain of ownership. As of August 2021,Big Horn, Deer Lodge, Flathead, Granite, Phillips, and Richland countieslackedthat local option tax. Not so fast, Slick. But if you dont change the registration to an RV, you might need a CDL. 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. Lets find out. 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. Not break the law because you dont agree with it. So what exactly makes California so offensive to the palate that tens of thousands are walking away from it? Montana vehicle registration. The answer, in most cases, is yes. Make, model, and color of the vehicle. This is the typical structure of the Montana scheme where somebody creates an LLC in Montana for the sole purpose of owning and registering the car in Montana and has no other connection with the state. 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. So lets make a quick comparison on the registration of our generic brand new cars with a completely average sale price of $42,258. All Rights Reserved. Tax Attorneys, CPAs & EAs who specialize in working with businesses and investors. Overall, there has been an exodus of 275,000 jobs, and over $76 bn in capital funds have egressed the state since about 2008, with some 13,000 total companies leaving California. As I have noted in the past, the solution is to get the law changed. The Montana LLC comes with real business responsibilities. For vehicles that are eight years old and newer, lucky you! No compulsory annual safety inspections. MDT does handle interstate licensing and registration. 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