5 Star Registration includes all these fees in our service. 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. We may earn a commission from links on this page. Then there are the tax issues. Those days were the best. Some states like California are poised to lose hundreds of dollars per vehicle if its residents register the vehicle outside of their home state. Seems I can do everything by mail from a company like Americasmailbox. Dirt Legal can help you save time, money, and headaches. Send us a note: tips@thedrive.com. How about the blue-collar guy who has grown his business over the years, has a fleet of work trucks, and is buying more? $60,000 and up: $192. All rights reserved. And while this represents financial success for South Dakota, one can't help but wonder how much money other states are losing. 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. Many see it as asmart move. DM me if you have questions. 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. Its very difficult to get insurance. You neednt even set foot in the state. Technically, the practice is legal. So lets make a quick comparison on the registration of our generic brand new cars with a completely average sale price of $42,258. If you do not receive a billing notice approximately 60 days before your vehicle's registration expires, please call us at 1-800-777-0133 to find out what your fees are. The answer, in most cases, is yes. Okay, so back to the exotic cars. Establishing a Chain of Ownership for Your Vehicle 2. He resides on a small farm in Eastern Kansas where he (sometimes) enjoys fixing ancient farm equipment. But if you dont change the registration to an RV, you might need a CDL. I don't have a state ID or NC Driver's License. No smog checks before selling your vehicle. Share it with your network! Some state officials insist that vehicle registrants have an actual interest in real property in the state, but the requirements for showing this are extremely minimal. The second highest, Clay County, had just 7,241 registrations during the same time; however, that represented more than one-fourth of all vehicles registered in the county. Montana has no listed minimum tire tread depth. When you sign the bill, complete the buyer section the same as you would a Montana title application. It is particularly beneficial for anyone living in heavily taxed states, not just the super-rich. 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. 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. But car and RV dealers objectedstrongly. The practice of registering a collectible car there, regardless of where itislocated in reality, is done in orderto avoid paying taxes and shirkemissions standards. The1987 Porsche 911that sold on Bring a Trailer on July 26 was a coupe so dreamy that latefounder Ferdinand Porsche would be sorry to have missed it. We run BAT shipping, so we see where people are moving all the cars around. I have no problem utilizing said loophole. Toby is an attorney on a mission to help investors and business owners keep and grow more. Likewise, we offer a New Mexico LLC for our South Dakota option, which affords the same sort of protection; the asset belongs to the LLC rather than you. He got his B visa and we will arrive in the U.S. on March 5 in North Carolina. 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. No, You Shouldn't Incorporate And Register Your Car Tax-Free In Montana 9.14.15 4:48 PM EDT By Laura Northrup @lnorthrup Car ownership is fun and convenient, but paying sales tax, use tax, or. There are a few key reasons why Montana plates keep popping up, and it is not your imagination. Your exotic or expensive car or RV is purchased by your LLC. He wrote The Lemon Law Bible and Chryslers Turbine Car: The Rise and Fall of Detroits Coolest Creation. Was this document helpful? Considering the complexity of modern emissions systems, you will probably need to have a shop do it; this isnt like throwing a set of Cherrybomb glass packs on your 85 K-10. Heres how it works: you pay a few hundred bucks to a law firm in Montana to register a limited liability corporation. 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. All rights reserved. Why take the calculated risk that your car is getting older and will need emissions repairs anytime. Heres where Id be worried even if I thought I could dodge the IRS. We aren't so concerned about those costs when you consider that renting an RV for this duration would be around 40k. Frankly, it is nerve-racking to think about getting read the riot act when a cop finds that your drivers license does not match up with the state that your vehicle is registered in and/or the one you are driving in. (Ritholtz also hosts the Masters in Businessshow on Bloomberg Radio. Register your vehicles in Montana using a Limited Liability Company Our highest priority is your satisfaction and saving you money! It didn't take long before he shared his secret with the world, even though he couldn't point out Clay County on a map. The scam works like this: You hire a Montana law firm to form a corporation or limited liability company (LLC) for you. In certain circles, Montana registration is a touchy subject. . One of the most common questions when registering a vehicle under an LLC in Montana is about vehicle inspections. Off-highway legal fee: $61.25. This is because, with less than half the population of the borough of Queens, N.Y., it has no populated areasfederally classified as having non-attainment status tomeetthe Clean Air Act'sregulations. Car ownership is fun and convenient, but paying sales tax, use tax, or personal property tax on your car is expensive and annoying. And as a bonus, you evade smog[regulations].. Oh, and by the way, if your car happens to smoke, heaven help you from the Cali Karens: the CARB has a series of hotlines set up for people to narc you. Andy Says Hell Yeah. According to the California DMV: If your vehicle is less than 4 model years old, you can pay a smog abatement fee instead of getting a smog inspection for the first 8 years that your vehicle is registered. 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? 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. MDT does handle interstate licensing and registration. What you will receive in this process is an entirely new title from the State of South Dakota, a South Dakota license plate, and South Dakota proof of registration. For vehicles that are eight years old and newer, lucky you! Youve got to have it. Still, many people are willing to risk taking advantage of this loophole in the law. Montana Vehicle Registration Rates All fees listed below are based upon a 12-month registration. It is such a well-known tax dodge, even my own accountant has suggested I use it to shield my vehicle from California taxes, says Jeff Wright, an LA-based car enthusiast whoowns a ranch in Montana. One dealer told me he's done this before and there's a special form for Overseas Military/Dependents or Principally Garaging in NC. You pay no sales or use tax and then bring your car to whatever state you live in and drive the vehicle with tax-free impunity. HELOC Taxes and What Does It Mean for Your Wallet? 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. 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. You can see these figures and determine that they are, in fact, insane. But withtighter emissions standards enactedinConnecticuton July 22, Colorado legislators slated next month to discussrequirements to significantly lower toxic air pollutionby 2027, and a handful ofautomakers including BMW, Volkswagen, and Fordrecently backing the USEnvironmental Protection Agencysdecision to restore California's ability to set its own strict tailpipe and zero-emission vehicle standards, debate is heating up over how far to go to avoid restrictions. 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. View all online services Renew Your Vehicle Registration Renew your Driver's License or ID Card Submit your completed vehicle registration packet. Montana Department of Justice The Department of Justice handles driver licenses and in-state vehicle registration. Another subreddit directed me here saying you folks know a lot about registering vehicles as non-residents. And as we touched on before, Montanas lack of inspections and emissions testing are strong reasons. 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. We have thoroughly discussed the glaring problems with California and its automobile registration process, which are numerous. Local taxes and fees now total $4453. 2 mtchalcedony 1 yr. ago Discussion in 'California (Southern)' started by 1monza, Sep 7, 2019. 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. For what its worth. So, my suggestion would be: Dont do it. 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. If you are interested in seeing all of the ways that you are getting fleeced in this one-sided transaction, feel free to read through the complete breakdown of the DMV calculator. 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. 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. If this alone were the determining factor, you still come out ahead titling and registering your car in South Dakota. Are those even registered at all? 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 problem, Michigan lemon law attorney Steve Lehto explains: the state where you actually live can always catch up with you. The same $42,258 sale price will calculate at four percent to $1,690.32 in sales tax, an immediate savings of $2,324.68, equating to nearly 58% less in debt from taxes. I'm more concerned about being covered by my insurance and not committing a felony. The fee goes down in increments depending on how old the vehicle is. Ultimately,an$825luxury fee was added to ordinary registration costs for vehicles worth more than $150,000. Any other periods of time should be multiplied or pro-rated according to the time period for which the vehicle will be registered. So place an order to renew your Montana vehicle registration before noon today and you'll have your new registration sticker tomorrow. The same logic applies to registration in other states of convenience as well. They have a garage full of super cars with South Dakota plates (and we live nowhere near South Dakota. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. Part of MOTORSPORT NETWORK. This means you can own a car in another state. 9.14.15 4:48 PM EDT By Laura Northrup@lnorthrup, big lie country montana car registration sales tax use tax personal property 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. Steve Lehto has been practicing law for 23 years, almost exclusively in consumer protection and Michigan lemon law. Do you plan on insuring your vehicle? Some states are willing to use extreme measures to secure tax revenue on pricey vehicles that their residents purchase out of state. The Montana lawyers who form these LLCsat a cost of around $1,000--admit as much in the small print on their websites. Others acquirea mailbox address or property at whichthey can claim Montana residency. 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. This isnt even counting localized taxes and fees, which as we saw earlier can be substantial in California. You will have to provide a passing smog check in selling your car. In California, by contrast, owners must ensure that all vehicles made after 1975 meet emissions standards and can pass safetyinspections. 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