(Progressive already said they'd insure both of us as foreign drivers in N.C.). And guess what? Your vehicles will be registered in Montana which has no sales tax. $35,000-$59,999: $165. What if you could avoid that, and avoid annual car inspections, just by filling out a little bit of paperwork? Ready to ditch those crazy fees and taxes? A fee of $800 is assessed for motorhomes with retail values over $300,000. So what exactly makes California so offensive to the palate that tens of thousands are walking away from it? We come to the added dimension that California car registration is well known for the smog check. Its for the parents trying to get by who are tired of their hard-fought pay going up in smoke. You can choose Dirt Legals Vehicle Registration Service. Awesome? License plate number. No compulsory annual safety inspections. 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. Lets find out! First, it does not charge sales tax on personal property. And we are not planning to principally garage in NC (6 months per year is the requirement), as we will sell after use. Those days were the best. It's a great way to save money or travel the world. Weve got plenty of those. After doing a bit of research, he found a loophole that permitted him to register his vehicle in Clay County while living in Mexico. This supercar has an MSRP of $501,900, with the prospective buyer on the ropes for $44,167.20 in tax alone. The maximum vehicle size in Montana is 102 inches wide, 14 feet tall, and 55 feet long for a single vehicle. Montana has long been a bastion of tax freedom for many years, so it was one of the original havens for supercars. All we need is a title, Manufacturers Certificate of Origin, or bill of sale (if you are financing your car) to process your request. 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 $150,000 (often called the Ferrari Tax). 2023 MOTORSPORT NETWORK. For somewhere around 1200$ there would be nothing to do from our side except fill out a form. But this is not limited to fast cars and expensive motorhomes. DIRTLEGAL.COM IS A PRIVATELY OWNED WEBSITE AND IT IS NOT OPERATED BY ANYGOVERNMENTAGENCY. Its a $750 value, and youll walk away with a custom tax reduction plan designed specifically for you. They said that lots of expensive cars have Montana plates, and its all part of a tax scheme. Suppose he is purchasing ten units and owns a business in LA. New Registration. 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. 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. $25,000-$34,999: $110. My car storage guy just told me that another client of his who has a GT3 Touring with Montana plates has a problem. 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. 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. It is the most populous state in the nation, has fantastic natural resources, and has traditionally been a hub of global commerce and manufacturing. Articles may contain affiliate links which enable us to share in the revenue of any purchases made. So, if you have a car and hold the title, you do not need to undergo a smog check so long as it is 1) four years old or newer or 2) eight years old or newer and you have been paying your smog abatement fee. Montana has no sales or use tax and no vehicle inspections. Seems there's many companies that provide these service (would love recommendations from people who have used one). Look, tactical vehicles in the army (or any foreign army, for that matter) are designed from the ground up to take troops, supplies, cannons, missiles, food, fuel, and mail to the farthest ends of the earth. But regardless of which part of the state you may reside in, there is another option to save money on registration and kick the smog check to the curb. 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? Its the rest of us, who have the misfortune to live in places that arent Montana, who might find this scheme tempting. We feel like youve earned a break once youve spent over a hundred grand on one of the most collectible Audis on the planet. The practice is so popular that there are even companies with the sole purpose of facilitating out-of-state vehicle registrations in South Dakota. Can anyone legally register their car in Montana? Reddit and its partners use cookies and similar technologies to provide you with a better experience. The extraordinarily high cost of living is a prime reason for the very real exodus. Of course, there is a difference between the supercar driving Silicon Valley technopreneur with a Lambo or Ferrari and a retirement-aged couple who wishes to spend their savings on a high-end luxury car or, as we mentioned before, a high-end RV. An eight-year-old car, driving an average of 14,263 miles per year, will have around 114,000 miles on the odometer by year eight, so it is probably going to be due for some repairs soon, especially in exhaust and emissions. The same logic applies to registration in other states of convenience as well. It's $10,000 per inch of license plate. Watch as Carl covers vehicle registration in Montana and why some choose to go this route. Montana residents do not have to pay the sales tax on their vehicles. Have you done this? Were here to tell you how easy Montana car registration can be, show you that you dont have to be rich to take advantage of it, and explain the nonmonetary benefits of registering your vehicle in Montana. 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. Do you need legal help with vehicle registration using an LLC? Where 10 years agothe sight of a Ford GT sporting a blue Montana plate would be rare, adriveto the popular Friday morning car gatherings at Newcombs Ranch outsideLA reveals that even relativelypedestrian 911s carryMontana plates. 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? 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. 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. One of the most common questions when registering a vehicle under an LLC in Montana is about vehicle inspections. $60,000 and up: $192. Resurrecting an old thread here but thought I should pass it on. Chain of ownership document (original copies). And, yeah, theres meaningful movement., I advise my clients to establish a Montana LLC only when the odds for a sales tax audit are minimal, says Doug Trotter, the owner of Trotter, LLC, a firm that specializes in automotive consulting, acquisition,and financing. Eventually, it will fail, and it will cause your vehicle to fail the emissions test in a costly way. (Californias sales tax, for instance, is 7.25%.) Class A motorhomes are high-end luxury vehicles that start in the $100k range (often more like $150k) and go up to seven figures. Cost was somewhere between 100-150 iirc, and you have to pay yearly. Discussion in 'California (Southern)' started by 1monza, Sep 7, 2019. 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. It is particularly beneficial for anyone living in heavily taxed states, not just the super-rich. Thats the premise of companies that offer to help you incorporate in Montana, have your corporation own the vehicle, and pay no taxes. 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. So is this an extravagant workaround that benefits the people, or an unethical loophole being used as a revenue generator? I'm not military so it would be the latter. Make, model, and color of the vehicle. Youve heard of Skoolies. Then there are the tax issues. As it turns out, Barsketis was onto something. Thread starter LSUFan69; Start date Aug 30, 2022; Prev. 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. 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. 2022 Dirt Legal. There is an actual departure leaving the Golden State; even the media outlets in California conclude that this is real. Thats less time invested, less money spent, and more breathing room on your next check. Was this document helpful? Since it has an entirely legitimate South Dakota title, you are not beholden to Californias asinine rulings regarding having a valid smog check at the time of sale. It looks like portions of our site are being blocked! My sister has a residence there and I actually have history with that address as it was my last official U.S. residence. Catch more great investing & business tips on our YouTube channel, Build your customized strategy with a complimentary Strategy Session today, How to Start a Business Entity in Pennsylvania, How to Start Stock Investing Through Infinity Investing Part 3. Apparently accounting software and Microsoft Excel haven't reached South Dakota yet. Bill targets tax loophole for recreational vehicles By Emily Nitcher / World-Herald Bureau Feb 17, 2014 0 LINCOLN Recreational vehicles with Montana license plates started showing up at. Some states are taking measures to crack down on residents who set up shell corporations in other states, including suing for tax evasion. 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? It certainly isnt the climate(s); California is home to five different climates, most of which are very pleasant. Several people I know of use South Dakota. The debate about registering a car in Montana can seem like a lot of fuss overa piece of metal. We see, obviously, a lot of sellersmany do it,and buyers are interested in doing it, Nonnenberg says. 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. For vehicles that are five to ten years old the registration fee is $87. While this ushered in unimaginable wealth, it also changed the fabric of the state. The LLC registers and plates the vehicle in Montana. But I'm unclear when we actually have to visit the state. The California Air Resources Board is the lead agency for the smog check program in the state. your insurance will be in Montana, don't if they found out you always in California, will they still pay you . Our Montana Registration Service is tried and true if you dont want to lift a finger. 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. All rights reserved. Remember that these are the California car registration taxes assessed upon initial purchase. 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. Want High Quality, Transparent, and Affordable Legal Services? 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. Recreational vehicles, also known as RVs, can be quite expensive. Are those even registered at all? The answer, in most cases, is yes. It's easier to establish this chain of ownership if you form an LLC in Montana prior to purchasing a vehicle. But if you dont change the registration to an RV, you might need a CDL. 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. People from states usually have staggering sales taxes and oppressive inspection requirements to contend with just to get on the road. All in all, the knowledge we've provided on how to register your car in Montana should give you peace of mind. Create an account to follow your favorite communities and start taking part in conversations. 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. It's a strategy that you can agree with or not.. 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). California has some things going for it, but affordability is not one of them. Speak with an Anderson Professional Advisor to get your FREE Tax Plan Strategy Session. The big question is this: is the Montana registration process limited to just cars? UpCounsel accepts only the top 5 percent of lawyers to its site. Moreover, you cannot sell the vehicle in California unless you have a passing smog check. You generally cant go wrong by doing that. (Alaska, Delaware, New Hampshire, and Oregon are the other states that require no sales tax.) Typically, they register in a Montana county that doesn't have a local-option tax. 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. The Montana company bought the RV, not Thomas, the court said. 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 problem, Michigan lemon law attorney Steve Lehto explains: the state where you actually live can always catch up with you. So, even if you just conducted your biennial smog check five months ago, it is invalid. For vehicles that are eight years old and newer, lucky you! The Montana vehicle registration process has been generating buzz for years; it is nothing new. However, as we will see, this may not be the wisest decision. You can see these figures and determine that they are, in fact, insane. You'll simply need to produce the certificate of origin from the manufacturer. No need to spend hours finding a lawyer, post a job and get custom quotes from experienced lawyers instantly. Once we have proof of ownership through one of these means, we handle the rest. 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. Add the cars original price and 7.5% state tax for a grand total of $49,880.35, and suddenly youre paying 50 grand for a $42,000 car, and thats a significant difference for most people. Surely there couldn't be that many people from the Mount Rushmore State on vacation at the same time, right? . For example, some of these Ferrari 488 Pistas and a variety of Lamborghinis have been spotted cruising around in Mexico with South Dakota and Montana license plates recently. But these numbers havent even scratched the surface of what high-end RVs cost. Also, there are no inspections of any kind in South Dakota. This was not a trailer over the top by any stretch of the imagination, either. Some people want to avoid paying the thousands of dollars in sales tax when they purchase an RV. But hey - you saved thousands of dollars! Ready to hit the road? "My car was stolen and the insurance company won't pay me." Any other periods of time should be multiplied or pro-rated according to the time period for which the vehicle will be registered. It's a strategy made possible by a loophole in Montana law, and wealthy out-of-state residents have been using it for years . Drivers fill out an online form and provide the: State or province of the plate in question. 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, of course, exceptions to this rule. 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. There are a few extra steps, but they are worth it in the long run to secure the kind of savings and benefits on offer. Revenue generated from vehicle registration fees is a fairly stable and significant contributor to the state general fund, as it is the fourth largest general fund revenue source. Send us a note: tips@thedrive.com. Still, the effect is the same across the board. Essentially, it works like this: You form an LLC business in Montana. This does not create an attorney-client relationship and is not meant to constitute legal advice, so the good news is were not billing you by the hour for reading this. This process earmarks the vehicle to an owner. 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. Also, this is only a flat fixed rate for the state and does not include whatever fees the county and local municipality will pile up on you. There is also the misconception that only rich people can get a Montana registration or benefit from having one. You can schedule online or by calling 888.871.8535. Its a riska cheap thrill, echoes Zuckerman, the LA lawyer. So here is the rundown on the smog program for the state. It has gotten so out of hand, even people in Florida do the Montana tax grift, Ross says. You'll sign your name as the manager acting on behalf of your LLC. 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. But then, after that, it will hurt a lot. In recent years, Montana has made a name as a hub for exotic cars, although very few of them reside there. 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. So let me start by setting the stage and then hopefully someone can give the pros and cons of each option. 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