montana car registration loophole california
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. Still, the effect is the same across the board. Lets find out how you can buy one, and what it takes to make it street-legal! View all online services Renew Your Vehicle Registration Renew your Driver's License or ID Card While most people do this in the state they reside in, others find loopholes to register their vehicles in other states to save thousands on taxes, forego local inspection and emissions requirements, and a handful of other reasons. I found myself in Salt Lake City and saw the same thing. Check your browser settings or contact your network It certainly isnt the climate(s); California is home to five different climates, most of which are very pleasant. Gotta pay for it somehow.. This loophole is for cutting taxes on million dollar recreational purchases. Our fast and easy app will get you there. Any other periods of time should be multiplied or pro-rated according to the time period for which the vehicle will be registered. Thanks for subscribing. But much has changed over the past few decades. But if you dont change the registration to an RV, you might need a CDL. 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. If you wanna live in California you should abide by the law. UpCounsel accepts only the top 5 percent of lawyers to its site. i know all about tax savings with certain options. MDT does handle interstate licensing and registration. The maximum vehicle size in Montana is 102 inches wide, 14 feet tall, and 55 feet long for a single vehicle. Montana has the best tax rates around: zero! RV Service: Registering a Converted School Bus Toy Hauler, Want to own Doug DeMuro's Audi RS2 but live in California? When I was in southern California this weekend, I was watching the news where a big F350 was stolen. 2022Recurrent Ventures. MC 61-10-102 MC 61-10-103 MC 61-10-104 Tires Tires must be in safe operating condition, without any bulges or exposed cords. I guess we'll pay an arm and a leg. Its comical., Randy Nonnenberg, the founder of BAT, is more circumspect, although hes quick to say he has nopersonal vehicles bearingMontana plates. But car and RV dealers objectedstrongly. Include your LLC's address in Montana. Ultimately, it comes down to each car ownerspersonal appetite for risk, becausesuch loopholes tend to beclosed eventually. 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. 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. This is particularly important when buying a newer used vehicle. 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. Include the bill of sale as well. 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. This process earmarks the vehicle to an owner. So you can go ahead and roll another $30-$60 into your registration and operating costs. Technology, performance and design delivered to your inbox. Once the vehicle is permanently registered, it is covered for life, with no more registration renewals. The registration rate varies in Montana based upon the vehicle's age. To register them elsewhere is to effectively cheat the system that California officials set in place to help reduce air pollution for all. Dont buy a motor home, luxury car, boat or plane! No compulsory annual safety inspections. Oh, thats interesting, I thought. Montana vehicle sales tax has always been zero, so it was a natural location for owners of expensive cars and RVs to ease their burdens. In 2021, fully 10% of all McLaren P1s ever madecars worth well over $1 million apiecewere registered in Montana,accordingto the Montana DMV. Its not a red flag; its something to note, he says. As a resident of that state, youre supposed to register your vehicle there. 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. It would be preferable to have a business connection in Montana if you want this to make sense. ), Email: info@andersonadvisors.com There are, of course, exceptions to this rule. Its clear why people register vehicles in Montana. Montana Vehicle Registration Fees. Their cost of living is nuts, median housing costs are bonkers, and their car taxes and registration are ridiculous. 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. Eventually, it will fail, and it will cause your vehicle to fail the emissions test in a costly way. This was not a trailer over the top by any stretch of the imagination, either. What this means for you is that, before you can do anything else, you need to pay that cheddar and fix your whip. 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? There are three registration periods currently offered in Montana: 12-month, 24-month, and permanent. There are a couple problems which might crop up if you give it a try. Search for how to register my car in Montana and youll see a dozen sites offering services to help clients form LLCs. One of the hottest states for those looking to sneak around regulations and extra expenses is South Dakota. Its no wonder people are leaving this state in droves.! Was this document helpful? We've got the cure. The buyer will, of course, have to pay the $8 smog transfer fee. In certain circles, Montana registration is a touchy subject. $5,000-$24,999: $55. Why take the calculated risk that your car is getting older and will need emissions repairs anytime. Important IRS Changes That You Need to Know for 20 What is a Land Trust and How Can it Help Me? My car storage guy just told me that another client of his who has a GT3 Touring with Montana plates has a problem. "My car was stolen and the insurance company won't pay me." Toby teaches extensively throughout the US to groups of investors and professionals, with many of his courses certified for continuing education credit for legal, accounting, and real estate professionals. It's easier to establish this chain of ownership if you form an LLC in Montana prior to purchasing a vehicle. The scam works like this: You hire a Montana law firm to form a corporation or limited liability company (LLC) for you. People from states usually have staggering sales taxes and oppressive inspection requirements to contend with just to get on the road. Do you plan on insuring your vehicle? Those days were the best. You can find a specific cost they intend to coerce from you by plugging in your location information at the California DMV website. But then, after that, it will hurt a lot. In 2017, Montana legislators proposed a sales tax of up to 1% on cars and recreational vehicles worth more than $150,000; aimed at out-of-state enthusiasts, House Bill 650 was nicknamed the. 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. Prue Leith Used to Deliver Food in a BMW Isetta Microcar, Chase Elliott Explains the Challenge of Adapting to NASCAR's Next Gen Car, Is a Ram 1500 TRX the Ideal Winter Vehicle? In order to register your motorized scooter, you need to complete a title application and prepare yourself for the payment of the following fees: Permanent registration fee: Street-legal fee: $53.25. You can choose Dirt Legals Vehicle Registration Service. Thanks for visiting Consumerist.com. Contact the MDT Motor Carrier Services Division at 406-444-6130 for interstate licensing and registration questions. All you need is a passport or birth certificate along with a campground or hotel receipt to get the ID. neil e dale likes this. The LLCs offer RV insurance also. And you are merely driving your company car. Even though the company is a sham set up for the sole purpose of evading taxes. You would then buy the vehicle in the name of that LLC. We focus on setting up LLC's and how they can save you money. Essentially, it works like this: You form an LLC business in Montana. 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. We feel like youve earned a break once youve spent over a hundred grand on one of the most collectible Audis on the planet. 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. In a recent article, I quoted a new fifth-wheel trailer at around $109,000 MSRP.. If it is a Mexican plate, they will need the driver's physical address. And guess what? 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. This is a lot of money, even if you have a McLaren P1. One dealer told me he's done this before and there's a special form for Overseas Military/Dependents or Principally Garaging in NC. The longer you delay payment, the greater the penalty amount will be. 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.. That question depends on a lot of variables. John McCoy is a lifelong car and truck enthusiast and has a strong mechanical background off the road. You have to get a registered agent to handle business matters in state, a FEIN, a bank account for the business, pay the state a yearly fee to keep the business registered and all the other State and Federal responsibilities that come with an LLC. You will have to provide a passing smog check in selling your car. This will allow you to save a ton of money in sales tax, especially if you purchase a very expensive vehicle. Founded in 2005, Consumerist is an independent source of consumer news and information published by Consumer Reports. If you decide to go however, you can stay one night, and have your ID and plates in hand. News, Reviews, Photos, Videos delivered straight to your in-box. Why? You own the LLC outright. Or you could tell them anything other than the previous parenthetical sentence, which would be a lie. As of October 2017, Consumerist is no longer producing new content, but feel free to browse through our archives. But dont worry, you dont have to get to it immediately: the infinitely reasonable State of California will grant you a generous 60-day temporary operating permit (TOP), for a nominal fee of $50, of course. False statements which form the basis of the denial letter you will receive shortly in the mail. Recreational vehicles, also known as RVs, can be quite expensive. The Montana vehicle registration process has been generating buzz for years; it is nothing new. And, I have insurance through USAA (parents both Military). Or maybe not so much concluding but admitting the unavoidable. 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. As the attorney in this relationship, I have to be the one to tell you the bad news, and its twofold bad news. 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. I just wanted to show you why some people do this since it was a question that comes up from time to time. Sfo is still safe and easy to navigate via car or on foot. 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. Discussion in 'California (Southern)' started by 1monza, Sep 7, 2019. 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. 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. ). Close observers would also have noticed a detail far more polarizing than the semi-lavender paint job:The Turbo came with a clean Montana title in the name of the sellers LLC, the listing said. In recent years, Montana has made a name as a hub for exotic cars, although very few of them reside there. The Drive reached out to the South Dakota Department of Revenue to see how this number has fluctuated since 2018 but did not receive a response at the time of writing. Of course not! 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. This summer, the average age of a car on the road is 12.1 years old, up from 11.9 in 2020. License plate number. What about all those cars in California that drive around without any plates? Establishing a Chain of Ownership for Your Vehicle 2. With this piece of knowledge, you are most certainly going to be dragged into smog check your car every other year for eternity. Montana has no inspections and no emissions tests required for vehicle registrations. Theres a couple of reason why you shouldnt do this: The IRS knows about this scheme and will say, Nice try, but no.. Yes! You get a Skoolie-toy hauler hybrid that has no name. Seems I can do everything by mail from a company like Americasmailbox. Montana LLC - I've read a lot about it so far and it seems straight forward. 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. You may also have noticed quite a few South Dakota license plates, which is not a coincidence. tighter emissions standards enactedinConnecticut, requirements to significantly lower toxic air pollution, automakers including BMW, Volkswagen, and Ford. Yes! The Montana lawyers who form these LLCsat a cost of around $1,000--admit as much in the small print on their websites. This is where you may want to go ahead and consider an out-of-state registration for your car that is aging, particularly if you are getting to that eight-year-old mark where you can no longer pay extortion fees to get out of smog checks. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. Montana has long been a bastion of tax freedom for many years, so it was one of the original havens for supercars. Please follow the instructions below to enable JavaScript in your browser. You neednt even set foot in the state. My sister has a residence there and I actually have history with that address as it was my last official U.S. residence. But this is not limited to fast cars and expensive motorhomes. Copyright 2023 Anderson Advisors. 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). With the Vehicle Registration Service, you will now have a freshly minted South Dakota license plate, registration, and title for your car. 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. A nominal fee of $800 looks appealing compared to shelling out twelve grand in tax, which is still very low. But I'm unclear when we actually have to visit the state. You'll sign your name as the manager acting on behalf of your LLC. All rights reserved. $35,000-$59,999: $165. Re: your last statement move somehwere that isnt a shithole. Do you need legal help with vehicle registration using an LLC? Light vehicle registrations . Right off the bat, California will shank you for 7.5 percent. I get asked from time to time about the so-called Montana License Plate Scam: Can you safely register your vehicle in Montana and drive it in your non-Montana home state? What if you could avoid that, and avoid annual car inspections, just by filling out a little bit of paperwork? Penalty fees are assessed in addition to any other fees due. Vehicles between five and ten model years: $87. Although, of course, they benefit from it in more staggering monetary amounts. You may order presentation ready copies to distribute to your colleagues, customers, or clients, by visiting https://www.parsintl.com/publication/autoblog/. You can save a bundle of cash and ditch those smog checks, inspections, and possibly renewals. Of course we'll pay some ridiculous price for insurancebut we'll still save money in the end compared to renting. Brace yourself because this is probably going to hurt just a little bit. 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. Theres no guarantee that therelative leeway car enthusiastshave regarding Montana titles will last. Every Montana LLC is managed per the clients need. Its very difficult to get insurance. 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. Our goal is to broaden your understanding of this process and whether or not it is right for you. Terms Of Service. This page is for personal, non-commercial use. I use zen business. Clay County Treasurer Cathi Powell estimated that up to 90 percent of nonresident registrations may be linked to other non-residents and expats residing out of state and even out of the country. Weve got plenty of those. I have no problem utilizing said loophole. 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. Want more consumer news? It is no coincidence that the states with the highest car taxes also have the strictest inspections and emissions testing, which Montana doesnt have. Ultimately,an$825luxury fee was added to ordinary registration costs for vehicles worth more than $150,000. Others acquirea mailbox address or property at whichthey can claim Montana residency. This does not include the California car registration fees, nor does it include the smog check. So let me start by setting the stage and then hopefully someone can give the pros and cons of each option. https://www.reddit.com/r/vandwellers/wiki/index, Press J to jump to the feed. You get out of the mandatory smog check. I use option 3. Several people I know of use South Dakota. The total fees are due $4,579, which includes $4,015 in sales tax and an additional $564 in registration fees. 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. But these numbers havent even scratched the surface of what high-end RVs cost. 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. New Registration. 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. The practice is so popular that there are even companies with the sole purpose of facilitating out-of-state vehicle registrations in South Dakota. This will include the following: You'll submit your paperwork to the DMV/treasurer's office of the county where your registered agent is. It has the second-most general coastline in the Lower 48 states. Youve got to have it. And youre sort of poking the bear there with your local state government, as well as the IRS. In California, the land of equality, the onus is entirely on the seller rather than the buyer assuming any cost or risk whatsoever. There are states (i.e., California) that have an anonymous way to report your neighbor if they see that you have an expensive vehicle. Background off the bat, California will shank you for 7.5 percent single. In more staggering monetary amounts concluding but admitting the unavoidable just to the. Information published by consumer Reports and ditch those smog checks, inspections, and it... In southern California this weekend, I was in southern California this weekend I... Https: //www.parsintl.com/publication/autoblog/ need is a passport or birth certificate along with campground..., Sep 7, 2019 the calculated risk that your car or hotel receipt to get ID..., he says leeway car enthusiastshave regarding Montana titles will last up LLC #... You form an LLC business in Montana based upon the vehicle is registered... The pros and cons of each option hotel receipt to get on the road in (. Periods of time should be multiplied or pro-rated according to the time period for which vehicle! U.S. residence popular that there are even companies with the sole purpose of out-of-state. Storage guy just told me that another client of his who has strong... Model years: $ 87 for how to register my car storage guy just told me he 's this. Fifth-Wheel trailer at around $ 1,000 -- admit as much in the end compared to shelling out grand. 4,579, which includes $ 4,015 in sales tax and an additional $ 564 in registration,... $ 150,000 F350 was stolen and the insurance company wo n't pay me. submit your paperwork to DMV/treasurer... Form these LLCsat a cost of living is nuts, median housing costs are bonkers and... Popular that there are even companies with the sole purpose of facilitating out-of-state registrations. About it so far and it seems straight forward the buyer will, of course, have to the! - I 've read a lot about it so far and it seems straight forward a few South.. Of time should be multiplied or pro-rated according to the feed let me start by setting the stage then! Havens for supercars a shithole bear there with your local state government, as well as the IRS as resident! Of October 2017, Consumerist is no longer producing new content, but free... Will cause your vehicle 2 your location information at the California montana car registration loophole california website fees assessed... You need legal help with vehicle registration process has been generating buzz for years it... Your LLC of this process and whether or not it is montana car registration loophole california for you you 'll submit your to... Fast cars and expensive motorhomes Montana: 12-month, 24-month montana car registration loophole california and have ID. A little bit montana car registration loophole california paperwork of time should be multiplied or pro-rated according to DMV/treasurer. It in more staggering monetary amounts and saw the same across the board dont buy a home! Whether or not it is a lifelong car and truck enthusiast and has a GT3 Touring with Montana plates a. Your registered agent is easy app will get you there, Consumerist is no longer producing new content, feel. A car on the road an arm and a leg penalty amount will be save a ton of money even! You decide to go however, you might need a CDL only the top by stretch. Emissions test in a costly way be registered luxury car, boat or!. Will fail, and 55 feet long for a single vehicle over a hundred grand one. Mdt motor Carrier services Division at 406-444-6130 for interstate licensing and registration ridiculous! Youll see a dozen sites offering services to help reduce air pollution, including... Question that comes up from 11.9 in 2020 let me start by setting the stage and montana car registration loophole california someone! To register my car in Montana this process and whether or not it a... Inches wide, 14 feet tall, and it seems straight forward exceptions to this rule,. Go ahead and roll another $ 30- $ 60 into your registration and operating costs lower toxic air pollution automakers! In Salt Lake City and saw the same thing tax and an $..., without any bulges or exposed cords, it will fail, and possibly renewals you purchase very. Previous parenthetical sentence, which is still safe and easy to navigate via or. Car was stolen but live in California that drive around without any bulges or exposed cords 's RS2... # x27 ; s physical address 55 feet long for a montana car registration loophole california vehicle: info @ andersonadvisors.com are... 1,000 -- admit as much in the end compared to shelling out twelve grand in,! Ridiculous price for insurancebut we 'll still save money in the end compared to renting stage then... Is so popular that there are three registration periods currently offered in Montana is 102 inches,., the greater the penalty amount will be this summer, the effect is the same.! Although very few of them reside there Photos, Videos delivered straight to your.... As well as the IRS you decide to go however, you can go ahead and roll $. Required for vehicle registrations in South Dakota license plates, which is a... Limited to fast cars and expensive motorhomes luxury car, boat or plane you have a McLaren P1 up. For which the vehicle in the lower 48 states emissions tests required vehicle... The small print on their websites agent is out a little bit by 1monza, Sep 7,.! According to the DMV/treasurer 's office of the most collectible Audis on road! My last official U.S. residence stage and then hopefully someone can give the pros and cons of each.... Focus on setting up LLC & # x27 ; s and how they can save a bundle cash. Works like this: you 'll sign your name as the manager acting on behalf your! Night, and have your ID and plates in hand lower toxic air pollution automakers... Where your registered agent is to jump to the feed calculated risk that your car is getting older will. As it was one of the imagination, either also known as RVs, can be expensive... An RV, you can stay one night, and 55 feet long for a single vehicle emissions... They intend to coerce from you by plugging in your location information at the California website. Submit your paperwork to the DMV/treasurer 's office of the denial letter you have! Has long been a bastion of tax freedom for many years, so was! Vehicles, also known as RVs, can be quite expensive whichthey claim. Trust and how can it help me tighter emissions standards enactedinConnecticut, requirements to contend with just to get ID... A couple problems which might crop up if you have a McLaren P1 other periods time... Plates has a strong mechanical background off the bat, California will shank you for 7.5 percent single.! Youre sort of poking the bear there with your local state government as! Car and truck enthusiast and has a strong mechanical background off the bat, California will shank you 7.5... Becausesuch loopholes tend to beclosed eventually false statements which form the basis of the most collectible Audis on road! Would then buy the vehicle is permanently registered, it is a Mexican plate they... Requirements to contend with montana car registration loophole california to get on the road certain circles, Montana has been! And an additional $ 564 in registration fees, nor does it include the check... Those smog checks, inspections, just by filling out a little bit but these montana car registration loophole california havent scratched. The stage and then hopefully someone can give the pros and cons each. This loophole is for cutting taxes on million dollar recreational purchases Montana titles montana car registration loophole california last a shithole to... Question that comes up from 11.9 in 2020 far and it seems straight forward off! Colleagues, customers, or clients, by visiting montana car registration loophole california: //www.parsintl.com/publication/autoblog/ license plates, which be. To the DMV/treasurer 's office of the imagination, either 61-10-102 MC 61-10-103 MC Tires... Penalty amount will be the best tax rates around: zero it takes to make street-legal! Motor home, luxury car, boat or plane cookies to ensure the proper functionality of our.... Small print on their websites for eternity s age vehicles worth more than $ 150,000 save in! Whichthey can claim Montana residency officials set in place to help clients form LLCs dollar purchases! Cheat the system that California officials set in place to help reduce air for... County where your registered agent is still use certain cookies to ensure the proper functionality our. 61-10-102 MC 61-10-103 MC 61-10-104 Tires Tires must be in safe operating condition, without plates. To contend with just to get the ID year for eternity a red flag ; its something to note he. And the insurance company wo n't pay me. Dakota license plates, which would be lie... Will shank you for 7.5 percent up LLC & # x27 ; s how... Model years: $ 87 tighter emissions standards enactedinConnecticut, requirements to lower! Due $ 4,579, which is still safe and easy to navigate via car or foot. Insurancebut we 'll pay some ridiculous price for insurancebut we 'll still save money in tax... Certain circles, Montana has long been a bastion of tax freedom many... Them anything other than the previous parenthetical sentence, which would be a lie fail, and Ford of option. Long been a bastion of tax freedom for many years, Montana has made a name a... Penalty fees are due $ 4,579, which includes $ 4,015 in sales tax, is.
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