These states are Alaska, Delaware, New Hampshire, and Oregon. 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 In a recent article, I quoted a new fifth-wheel trailer at around $109,000 MSRP.. Online Registration Renewal. 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. In 2017, HB 650 was implemented, and it imposes two separate fees for expensive vehicles: A luxury vehicle fee of $825 is assessed for light luxury vehicles with a retail value greater than $150,000 (often called the Ferrari Tax). You would then buy the vehicle in the name of that LLC. This supercar has an MSRP of $501,900, with the prospective buyer on the ropes for $44,167.20 in tax alone. The car dealer or the owner can send the vehicles title work to your registered agent, who will then file the registration. Not surprisingly, other states don't appreciate this tactic because they depend heavily on vehicle registration fees and tax revenue. To wrap up, you must register your vehicle to own it and drive it legally. First, youll need to pay a vehicle registration fee. First, it does not charge sales tax on personal property. Under state law, all motor vehicles including motor homes; motorcycles and quadricycles; travel trailers; utility trailers; all-terrain vehicles; sailboats over 12 feet in length; motorboats, jet skis and other motorized vessels; and snowmobiles must be registered with the state. You will need to register your car with Montana Motor Vehicle Division (Vehicle Registration Bureau). The only downside is that you have to put an ugly Montana plate on your vehicle. Montana offers no sales tax on motor vehicles if youre a resident, so registering in this state can save you a lot of money. When you pay the ad valorem tax at your county treasurers office, they will issue a decal for your vehicle that indicates the tax was paid. You can be fined up to $500. Press question mark to learn the rest of the keyboard shortcuts. Individuals must present the following: If youre a resident, your car dealership will send the paperwork for a newly-purchased vehicle to the County Treasurers office. This page is for personal, non-commercial use. This is because Montana considers local LLCs as residents. You must be logged in to perform that action. Well, this might not just be your imagination. 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. 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. However, the Louisiana Department of Revenue found out about the purchase and claimed that Mr. Thomas owed the state money in terms of unpaid taxes. It's easier to establish this chain of ownership if you form an LLC in Montana prior to purchasing a vehicle. You may register a motorcycle or quadricycle for both highway and off-highway use by paying the fees for both uses. The big question is this: is the Montana registration process limited to just cars? This is perfectly legal. John McCoy is a lifelong car and truck enthusiast and has a strong mechanical background off the road. In 2017, Montana legislatorsproposed a sales tax of up to 1% on cars and recreational vehicles worth more than $150,000;aimed at out-of-stateenthusiasts,House Bill 650was nicknamed the Ferrari tax.. For somewhere around 1200$ there would be nothing to do from our side except fill out a form. Then, ensure the exact name of your LLC is listed as the buyer of the car. Not sure about the insurance part. 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). $262.00. All of these concerns and frustrations are why people register cars in Montana, and with our Montana Vehicle Registration Service, our team can do the most challenging parts for you. On the national average of 7.12 percent, a motorhome with a retail cost of $300,000 will cost $21,360 in sales tax. So, an industry has sprung up to assist people from other states who want to take advantage of Montanas laws while living elsewhere. I don't like the waiting time either as it's wasting time for us. One of the most common questions when registering a vehicle under an LLC in Montana is about vehicle inspections. And, I have insurance through USAA (parents both Military). For information about reinstating registration after a second or subsequent conviction for no insurance, see the Driver License Sanctions page. Copyright 2023 Anderson Advisors. The LLC registers and plates the vehicle in Montana. Are state sales taxes and use taxes too high? However, there is no legitimate law that states out-of-state car registration is an illegal practice. Include the bill of sale as well. It is no coincidence that the states with the highest car taxes also have the strictest inspections and emissions testing, which Montana doesnt have. Montana residents will receive their license plates upon registration, where the expiration date and registration period are displayed. This is a phone call I get too often . For more information, see the License Plates page. Montana brand tools. The Montana Luxury Vehicle Fee is an $825 fee assessed for high-end luxury and exotic cars at the time of registration in Montana. Thismeans that someone who spends $500,000 on a new Lamborghini need not pay an additional $36,000 or so in taxes toacquire. 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. Thats correct; no nagging smog checks. Your exotic or expensive car or RV is purchased by your LLC. You do not need to spend a night there to get registered. We run BAT shipping, so we see where people are moving all the cars around. Can anyone legally register their car in Montana? The best part about purchasing your vehicle in Montana is that they dont have sales tax. As I have noted in the past, the solution is to get the law changed. So we are both non-residents. At that time, the customer needs to renew their vehicle registration and update their address with their new county treasurers office. Can you still write it off under Section 179? 2022 Dirt Legal. He resides on a small farm in Eastern Kansas where he (sometimes) enjoys fixing ancient farm equipment. Create an account to follow your favorite communities and start taking part in conversations. I think this could work but there are mixed messages on the DMV website about whether a State ID or Driver's license is required. A Montana LLC (Limited Liability Company) combines aspects from other business entities: corporations, partnerships, and sole-proprietorships. Many states are actively looking for people who use this loophole to avoid paying taxes. 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 didnt think I would like Texas. tighter emissions standards enactedinConnecticut, requirements to significantly lower toxic air pollution, automakers including BMW, Volkswagen, and Ford. Gotta pay for it somehow.. This will include the following: You'll submit your paperwork to the DMV/treasurer's office of the county where your registered agent is. DM me if you have questions. They claim that the spirit of the law is not being protected and that the abuse of this law has resulted in a lot of sham LLCs, whose sole purpose is to avoid tax. Establishing a Chain of Ownership for Your Vehicle, 2. Its clear why people register vehicles in Montana. It is also required if you plan to sell your vehicle in the future. But real moneyandethical considerationsare at stake. Vehicle Registration for Montana Residents. You can schedule online or by calling 888.871.8535. Watch as Carl covers vehicle registration in Montana and why some choose to go this route. Got an idea for a future Coffee with Carl? Send it to Carl at cwc@andersonadvisors.com. Tax Attorneys, CPAs & EAs who specialize in working with businesses and investors. You may order presentation ready copies to distribute to your colleagues, customers, or clients, by visiting https://www.parsintl.com/publication/autoblog/. 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. Another subreddit directed me here saying you folks know a lot about registering vehicles as non-residents. To register, you must visit the County Treasurers Office with the documents mentioned in the Requirements section. 5 Star Registration includes all these fees in our service. The registration period and the expiration date shown on the license plates for light vehicles are determined when the vehicle is first titled and registered in Montana, 61-3-314, MCA. (Californias sales tax, for instance, is 7.25%.) This was not a trailer over the top by any stretch of the imagination, either. 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 neednt even set foot in the state. However, if you want to be exempt from the sales tax, you must register your vehicle under your Montana LLC. You can schedule online or by calling 888.871.8535. Hire the top business lawyers and save up to 60% on legal fees. And your RV, motorcycle, UTV, ATV, and more. Permanent registration does not transfer with the motor home when there is a change of ownership. However, as we will see, this may not be the wisest decision. Ultimately,an$825luxury fee was added to ordinary registration costs for vehicles worth more than $150,000. The Montana Department of Transportation (MDT) does not issue or control Montana driver licenses, in-state vehicle license plates, or in-state vehicle registration. US Legal Forms is a trustworthy resource of over 85k professional and up-to-date legal documents collected by states and use cases. Visit https://mt.vitu.com/vehicle to search the vehicle record, or contact the Vehicle Services Bureau with the Vehicle Identification Number and the registered owners name and address. If you form a Montana LLC and have it purchase and take title to a motorhome or RV, you won't owe any sales tax in Montana. The basic concept of the process is known to many, but the specifics are a little harder to nail down. Out-of-state Lienholders: If an out-of-state secured party is holding the title for your vehicle, it is still possible to transfer the title to Montana. To start an LLC, you must first come up with a unique business name. If law enforcement stops you, theyll demand to see it. Sorry, I dont know the insurance company nameI was sort of interested in the conversationbut I owned my 5th wheel outright. In California, by contrast, owners must ensure that all vehicles made after 1975 meet emissions standards and can pass safetyinspections. False statements which form the basis of the denial letter you will receive shortly in the mail. 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. According to Montana state law, falsifying your address or other personal information in the And as we touched on before, Montanas lack of inspections and emissions testing are strong reasons. That question depends on a lot of variables. The age is determined by subtracting the model year from the current year. And an insurance adjuster, scrutinizing your claim might wonder what false statements you made on your insurance application. This is odd for a remote state of only one million residents. With the help of some light mathematics, that means Americans are paying over $2,000 in sales tax for a used car priced at $33,341. 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 fee goes down in increments depending on how old the vehicle is. The single permanent decal for snowmobiles is white and includes the abbreviation PERM. Guide: How to Avoid Capital Gains Tax on Real Esta How to Invest in Real Estate with No Money, Why 2023 is the Year you Create a Land Trust. Montana requires every driver to register their personal vehicle for it to be driven legally. We all know the benefits of registering your vehicle under a Montana LLC, namely no sales tax. These two fees are an absolute bargain compared to paying sales tax on these vehicles in other states. It is particularly beneficial for anyone living in heavily taxed states, not just the super-rich. That is a pretty lousy deal assuming you still like the car or truck and want to keep it but arent interested in pouring money into fixing emissions equipment, much of which may still be operating but not well enough to pass the test. If you purchase a vehicle from someone and no record of the title can be found, you may apply for a bonded title in accordance with 61-3-208, MCA.
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