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. 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. But hey - you saved thousands of dollars! The broader answer to this question is no, registering a vehicle in Montana is not just for the super-rich. Thismeans that someone who spends $500,000 on a new Lamborghini need not pay an additional $36,000 or so in taxes toacquire. Let your Montana LLC buy it! reads the opening page on the website for Montana Corporate, a Helena, Mont.-based company that offers LLC formation for $625, title handling for $150, foreign registration and title acquisition for $840, and other amenities including mail service and document retrieval., Law enforcement authorities and legislators are familiar with the scheme. The owner of a light vehicle (passenger cars, pickup trucks one-ton and under, vans and sport utility vehicles) may choose one of the following renewal period options, 61-3-311, MCA: Note: Light vehicles cannot be permanently registered if they display a license plate that requires recertification or a yearly donation fee. But what about when you live in the vehicle full-time (digital nomad) and use it for business as well? So, you would be legally obliged to pay a tax equivalent to $4,200, which is quite a lot. The fees below include the 3% Administrative Fee during the transactions: If youre registering permanently, youd be required to pay the following fees: Based on the manufacturers suggested retail price, counties may impose a county option tax. To register them elsewhere is to effectively cheat the system that California officials set in place to help reduce air pollution for all. One of the most common questions when registering a vehicle under an LLC in Montana is about vehicle inspections. Technically, the practice is legal. Montana Llc For Car Registration. You must renew your registration by the end of the following month, which is indicated on the registration decal on the rear license plate. This was not a trailer over the top by any stretch of the imagination, either. Companies help facilitate it. Your exotic or expensive car or RV is purchased by your LLC. However, if you want to be exempt from the sales tax, you must register your vehicle under your Montana LLC. I just wanted to show you why some people do this since it was a question that comes up from time to 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). 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, Writing off Your Vehicle Under a Montana LLC. Can you still write it off under Section 179? 5-10 years old. Along those lines, your first thought might be rich people taking advantage of Montanas complete lack of sales tax. He resides on a small farm in Eastern Kansas where he (sometimes) enjoys fixing ancient farm equipment. Otherwise, you might receive a new proof of registration that you must keep with your vehicle until you get your new plates. If this option is chosen, the vehicle cannot be sold unless first registered in the owners name or the owner is a Montana dealership. There is also the misconception that only rich people can get a Montana registration or benefit from having one. 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 apply for a duplicate Montana registration decal or license plate, visit your local MT county treasurers office in person and: Provide your MT license plate number (or show your vehicle Are state sales taxes and use taxes too high? Dealerships will send paperwork for a newly-purchased vehicle to your County Treasurer's office. There are states (i.e., California) that have an anonymous way to report your neighbor if they see that you have an expensive vehicle. 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. Be prepared to pay title and security interest/lien filing fees. The exact name of your LLC has to be listed as the buyer. In certain circles, Montana registration is a touchy subject. Seems I can do everything by mail from a company like Americasmailbox. For example, the age of a 2005 model year sport utility vehicle registered in 2004 would be -1 year, resulting in a depreciation multiplier of 100%. 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. But these numbers havent even scratched the surface of what high-end RVs cost. And youre sort of poking the bear there with your local state government, as well as the IRS. Your vehicles registration certificate is absolutely essential. Tax Attorneys, CPAs & EAs who specialize in working with businesses and investors. These states are Alaska, Delaware, New Hampshire, and Oregon. Of course not! Security Interest Filing Fees $8.24 for a security interest on all motor vehicles, including boats, trailers and snowmobiles. Montana has long been a bastion of tax freedom for many years, so it was one of the original havens for supercars. Oh, thats interesting, I thought. Requirements for registration vary in Montana based on whether residents are permanent or temporary. New residents must apply for a Montana vehicle title and register their vehicles within 60 days of establishing residency. The single decal for trailers is the same as the decal for permanently registered light vehicles. First, Montana has long been known for its lax approach to driving laws, most memorably the brief period where the interstate had no speed limit. TaxFreeRV can eliminate sales taxes at your time of purchase. Can be from a hotel or campground. Under 61-3-321(10)(a)(i), MCA all boats, personal watercraft and motorized pontoons must be permanently registered. This fee is in addition to: Fee Schedule for Buses, Heavy Trucks and Truck Tractors. You may order presentation ready copies to distribute to your colleagues, customers, or clients, by visiting https://www.parsintl.com/publication/autoblog/. Next, you are required to have a Montana Registered Agent. 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 treasurers office. So, my suggestion would be: Dont do it. Have you done this? You'll sign your name as the manager acting on behalf of your LLC. HELOC Taxes and What Does It Mean for Your Wallet? 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. First, it does not charge sales tax on personal property. Register Recreation Vehicles, Trucks, Cars, Trailers, Motorcycles, Boats, and Snowmobiles; Help you purchase or transfer your vehicle (s) into your Montana LLC; Forward your LLC Permanent registration (if all criteria are met), Registration certificate from the former state for temporary residents (if applicable), Vehicle registration fees (depends on the age of the vehicle), County option tax (based on the Manufacturers Suggested Retail Price (MSRP)), License plate fees if custom plates are ordered, $10.30 replacement fee (new plate number), $15.45 duplicate plate fee (transferring existing number and plate type to a new one), $25 for personally plates initially, and $10 at renewal, $10 Salary of Montana Highway Patrol and Retention Fee, the gross vehicle weight (GVW) fees for light vehicles. A legal loophole Technically, the practice is legal. Turns out, you dont have to pay the sales tax on your vehicle if youre a resident. Tightening rules could send the practice into overdrive. (Ritholtz also hosts the Masters in Businessshow on Bloomberg Radio. Montana offers two significant benefits. Once the title process has been completed, you must pay all taxes and fees, and your vehicle will be registered and. Then, once a year, you will be required to pay directly to the DMV the following fees: 0-4 years old. Its a $750 value, and youll walk away with a custom tax reduction plan designed specifically for you. 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. The same four percent tax on a $300,000 motorhome rings up to a stout $12,000. General Registration Fees| Boats, Personal Watercraft and Motorized Pontoons | Commercial & Heavy Vehicles | Light Vehicles (cars, vans, pickups & SUVs) | Light VehiclePermanent Registration |Motor Homes | Motorcycles & Quadricycles | Snowmobiles | Special Mobile Vehicles | Trailers | Travel Trailers |Registration Reinstatement| Mobile Home Transport | Reference Guides & Online Services. Please renew your license plates during the month shown on your license plates at the county treasurers office in the county you reside in. Some people want to avoid paying the thousands of dollars in sales tax when they purchase an RV. The bigger question is why haven't they passed laws to close the loophole rather than doing "high profile scare tactic raids"? Montana residents will receive their license plates upon registration, where the expiration date and registration period are displayed. Many see it as asmart move. 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. 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. 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. Do you plan on insuring your vehicle? Have you ever wondered why you see so many expensive cars with Montana license plates on them? It must be with you at all times of driving. How about the blue-collar guy who has grown his business over the years, has a fleet of work trucks, and is buying more? The current registration and plates remain active until the registration expires. Depending on where youre at, it might seem like you see a disproportionate amount of Montana license plates. Theres a couple of reason why you shouldnt do this: The IRS knows about this scheme and will say, Nice try, but no.. They said that lots of expensive cars have Montana plates, and its all part of a tax scheme. 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. Renew your registration online today. Non-residents have to first set up an LLC and purchase the vehicle under the LLC to be exempt from paying the sales tax. We are your Anytown experts! Only U.S. funds are accepted. And an insurance adjuster, scrutinizing your claim might wonder what false statements you made on your insurance application. Virginia is one of the most aggressive States chasing Montana plates because they have the dreaded yearly "car tax" which gives the owner the opportunity to pay for the car again over time in property taxes. Customer Identification Numbers Under the Montana Enhanced Registration & Licensing Information Network (MERLIN) system, all titling and registration transactions are recorded as part of a customers unique account: For individuals, the customer account number is the driver license or state or tribal identification card number. Then there are the tax issues. Robert L. Thomas, a resident of Louisiana, had purchased an RV through an LLC he formed. If youve ever driven around town, and said, You know, thats a nice Ferrari. 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. Sorry, I dont know the insurance company nameI was sort of interested in the conversationbut I owned my 5th wheel outright. The Montana Department of Transportations Motor Carrier Safety Program producedthis brochure for owners and operators of special mobile equipment to help the owner or driver understand how safety laws and regulations may apply when operating vehicles stickered as special mobiles on state roadways. Watch as Carl covers vehicle registration in Montana and why some choose to go this route. For example, a 2006 Porsche 911 in 2022 would be 16 years. 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. So, I'd appreciate advice on which makes the most sense for us from a legal standpoint. 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