montana car registration loophole californiamontana car registration loophole california

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 their fair. 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. 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. Also, since you will be registering from out-of-state, we offer a service for annual renewals for only $119. 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? First, you'll need to pay a vehicle registration fee. Well, that will come out to $35,925 in sales tax. If youre going to use this strategy of buying your vehicle in Montana but residing somewhere else, most online law firms will tell you to set up a Montana LLC and then register your vehicle in the state of Montana. He got his B visa and we will arrive in the U.S. on March 5 in North Carolina. Its a win, win, win, win situation. Thanks for visiting Consumerist.com. This was not a trailer over the top by any stretch of the imagination, either. I am not the fun police so I will tell you that in many states, you can probably do the foregoing and skate for quite a while without getting caught. John McCoy is a lifelong car and truck enthusiast and has a strong mechanical background off the road. If this alone were the determining factor, you still come out ahead titling and registering your car in South Dakota. 2022Recurrent Ventures. Vehicles that are 11 years old and older will cost $28 to register. Examples? At the time, theBozeman Daily Chronicleestimated that the proposed tax could raise $2.5 million annually for the state. Of course we'll pay some ridiculous price for insurancebut we'll still save money in the end compared to renting. 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. 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. Please follow the instructions below to enable JavaScript in your browser. Companies help facilitate it. If you purchased the vehicle from a private party, send in the title the private party gave you, with either the LLC name or your name listed. Its the rest of us, who have the misfortune to live in places that arent Montana, who might find this scheme tempting. Now lets have a look at South Dakota. Location where it was observed (including street and city). Share it with your network! The extraordinarily high cost of living is a prime reason for the very real exodus. Yes! Your biggest issue is going to get affordable auto insurance having not lived in the US for many years. So is this an extravagant workaround that benefits the people, or an unethical loophole being used as a revenue generator? But it is also one of the most difficult places to title and tag your vehicles. 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. If the insurance company finds out what you are up to, they can deny your claim because you have a Montana-registered vehicle while driving 100% in California. 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. Theres no guarantee that therelative leeway car enthusiastshave regarding Montana titles will last. So, even if you just conducted your biennial smog check five months ago, it is invalid. From my exploratory research using the linked calculator, most counties and cities ended up averaging about ten percent in sales tax for an automobile. 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. Another subreddit directed me here saying you folks know a lot about registering vehicles as non-residents. Not break the law because you dont agree with it. This is odd for a remote state of only one million residents. (California State Police have started cracking down on theresidentialdiscrepancies ofdriverspulled over for other infractions with California licenses and out-of-state plates.) The vehicle is then legally an asset belonging to the LLC. If youve ever driven around town, and said, You know, thats a nice Ferrari. But I'm unclear when we actually have to visit the state. We run BAT shipping, so we see where people are moving all the cars around. 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. Theres a couple of reason why you shouldnt do this: The IRS knows about this scheme and will say, Nice try, but no.. Montana vehicle registration. First, it does not charge sales tax on personal property. But if you do, that Montana plate will pop up. 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. Even after the $480 sales tax plus our reasonable fee of $349 (at time of writing), you are at $829, still around $400 less than just the sales tax for that car in California. The Montana company bought the RV, not Thomas, the court said. tighter emissions standards enactedinConnecticut, requirements to significantly lower toxic air pollution, automakers including BMW, Volkswagen, and Ford. For what its worth. Sometimes dealer cars are used as loaners, but I have no idea what the rules are around that. By going this route instead of buying it as an out-of-state resident, they avoid hefty sales taxes. RV Service: Registering a Converted School Bus Toy Hauler, Want to own Doug DeMuro's Audi RS2 but live in California? I don't have a state ID or NC Driver's License. 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? $35,000-$59,999: $165. The circular design of the power strip allows for the 15" to coil up inside the body of the productmaking it easy to wrap up and throw in a bag to take with you when traveling. My sister has a residence there and I actually have history with that address as it was my last official U.S. residence. But heres the absolute truth of the matter: we see in real-time the average age of cars on the road rising. If you are going to get fleeced, at least its nice to have an accurate figure. Why take the calculated risk that your car is getting older and will need emissions repairs anytime. The Benefits of Registering a Florida Car Out-of-State, What to Know Before Buying a Government Surplus Humvee. Penalty fees are assessed in addition to any other fees due. 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. But hey - you saved thousands of dollars! For vehicles that are five to ten years old the registration fee is $87. Most state laws require you to register your car and obtain insurance in the state where it is driven most. That said, when the Rapid City Journal reached out to the department in 2018, it "estimated" an annual take of nearly $7 million. i know all about tax savings with certain options. But the truth of the matter is that eventually, your car or truck will no longer pass emissions at some point in time. You can schedule online or by calling 888.871.8535. You can see these figures and determine that they are, in fact, insane. We feel like youve earned a break once youve spent over a hundred grand on one of the most collectible Audis on the planet. As of 2018, there were 58,334 out-of-state vehicles registered with the Department of Revenue's Motor Vehicle division which represent nearly five percent of all 1.2 million vehicles currently titled in South Dakota. Enjoy! Right off the bat, California will shank you for 7.5 percent. This part of the smog check process is somewhat painless. The fees that you will have to pay are as follows: Vehicles that are only four years old and under will cost $217 to register. 3 min read 1. Send us a note: tips@thedrive.com. 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. The maximum vehicle size in Montana is 102 inches wide, 14 feet tall, and 55 feet long for a single vehicle. Montana has no sales tax. Awesome? Speak with an Anderson Professional Advisor to get your FREE Tax Plan Strategy Session. Resurrecting an old thread here but thought I should pass it on. But this is not limited to fast cars and expensive motorhomes. So I do have a voter card there. Do a quick Google search and see the various people who ended up being audited trying to defend this scheme. Last but not least, there is the idea that this process has to be highly complicated. 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. They said that lots of expensive cars have Montana plates, and its all part of a tax scheme. Make, model, and color of the vehicle. But if you dont change the registration to an RV, you might need a CDL. So lets make a quick comparison on the registration of our generic brand new cars with a completely average sale price of $42,258. There is also the misconception that only rich people can get a Montana registration or benefit from having one. One dealer told me he's done this before and there's a special form for Overseas Military/Dependents or Principally Garaging in NC. But then, after that, it will hurt a lot. It's a strategy that you can agree with or not.. It has the second-most general coastline in the Lower 48 states. Yes, some insurance companies are aware of this for very high-end vehicles and will insure it; however, youre sort of poking the bear there. Taxes or fees in lieu of taxes are due, along with appropriate registration fees (U.S. funds only). All Rights Reserved. There are a few extra steps, but they are worth it in the long run to secure the kind of savings and benefits on offer. Include the bill of sale as well. For whatever reason, the Mount Rushmore State, like Montana and others, has become a bit of a safe haven for those looking to skirt their home states' regulations. For somewhere around 1200$ there would be nothing to do from our side except fill out a form. If you decide to go however, you can stay one night, and have your ID and plates in hand. The Pitfalls Of The Montana License Plate Scam [The Garage]. In addition to state sales tax on vehicles, owners must pay car registration fees according to the age of the vehicle and the length of registration desired (one or two years). You must have your bill of sale notarized. I guess we'll pay an arm and a leg. You will have to provide a passing smog check in selling your car. It's a great way to save money or travel the world. We come to the added dimension that California car registration is well known for the smog check. Taxes will still run you in the ballpark of $1,200 plus fees, whereas the 4% tax in South Dakota will only be about $480. He resides on a small farm in Eastern Kansas where he (sometimes) enjoys fixing ancient farm equipment. Its a riska cheap thrill, echoes Zuckerman, the LA lawyer. California is home to some of the most beautiful landscapes in the world. Montana has no inspections and no emissions tests required for vehicle registrations. Register and Title in NC. Tax Attorneys, CPAs & EAs who specialize in working with businesses and investors. In addition to normal registration fees, individual counties in Montana may also impose a so-called local option tax of up to 0.7% of avehiclesretail value, providingdirect revenue. Are those even registered at all? So you can go ahead and roll another $30-$60 into your registration and operating costs. Would have to immediately on arrival apply for a NC State ID which takes 20 days. Typically, they register in a Montana county that doesn't have a local-option tax. Yes. As of August 2021,Big Horn, Deer Lodge, Flathead, Granite, Phillips, and Richland countieslackedthat local option tax. 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. Check your browser settings or contact your network And as a bonus, you evade smog[regulations].. Ouch. 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. 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. The problem, Michigan lemon law attorney Steve Lehto explains: the state where you actually live can always catch up with you. Do you plan on insuring your vehicle? In a recent article, I quoted a new fifth-wheel trailer at around $109,000 MSRP.. This is not chump change, even for those who can afford it. That question depends on a lot of variables. 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. This loophole is for cutting taxes on million dollar recreational purchases. It is no coincidence that the states with the highest car taxes also have the strictest inspections and emissions testing, which Montana doesnt have. Its clear why people register vehicles in Montana. Now, you can look into registering your next vehicle in a sales-tax-free state with low licensing fees and no inspection requirements saving you hundreds of thousands in the long run. No smog checks before selling your vehicle. Vehicles between five and ten model years: $87. On the national average of 7.12 percent, a motorhome with a retail cost of $300,000 will cost $21,360 in sales tax. But I am the first to point out that 1.) So, for your very-average priced new car, you can go ahead and tack on an additional $253 in assorted California registration fees. It really is that simple. Visit our FAQ to jumpstart your journey! Part of MOTORSPORT NETWORK. My car storage guy just told me that another client of his who has a GT3 Touring with Montana plates has a problem. So, I'd appreciate advice on which makes the most sense for us from a legal standpoint. Still, proportionately the benefit is the same for everyone: Montana vehicle registration is not just about the wealthy individual saving taxes on his fifth Porsche Roadster. You get a Skoolie-toy hauler hybrid that has no name. Dealer plates (the paper ones with the dealer's name) are legal to drive on, but only for a limited time. What this means for you is that, before you can do anything else, you need to pay that cheddar and fix your whip. Its borderline tax evasion.. Gotta pay for it somehow.. The answer, in most cases, is yes. 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. The longer you delay payment, the greater the penalty amount will be. A founding partner of Anderson Business Advisors, Toby helped Anderson grow its practice from one of business and estate planning to a thriving tax practice and registered agent service with tens of thousands of clients nationwide. Check out our Montana Vehicle Registration Service to see how our team can do the hard work for you, or read the articles below to learn more about the process. Send it to Carl at cwc@andersonadvisors.com. It is not so much that the biennial smog check is pricey; it is more of a nuisance than a significant expense. A fee of $800 is assessed for motorhomes with retail values over $300,000. Drivers fill out an online form and provide the: State or province of the plate in question. Reddit and its partners use cookies and similar technologies to provide you with a better experience. They dont make enough to live in California anymore, but they are too broke to follow their jobs. Its no wonder people are leaving this state in droves.! The same four percent tax on a $300,000 motorhome rings up to a stout $12,000. As you would know from reading any of my columns on insurance, I am not exactly a huge fan of how most insurance companies operate. 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). For example, the Montana LLC program we offer is an LLC from Montana providing the required residency for registration there. Lets find out how you can buy one, and what it takes to make it street-legal! You will run afoul of California law regarding residency and vehicle registration, and the "Montana loophole" of creating an LLC there for registration purposes has been clamped down on. 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. But it does not end there. Good news: if you fail the smog check, you get to spend more money. No compulsory annual safety inspections. Despite the initial investigation taking place in 2018, the practice is very much so alive and well today. While this ushered in unimaginable wealth, it also changed the fabric of the state. Why Is Everyone Registering Their Cars in Montana? Others acquirea mailbox address or property at whichthey can claim Montana residency. We are your Anytown experts! Montana Vehicle Registration Renewal. Click Here! 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? Dont buy a motor home, luxury car, boat or plane! As a resident of that state, youre supposed to register your vehicle there. Class A motorhomes are high-end luxury vehicles that start in the $100k range (often more like $150k) and go up to seven figures. Charge multiple devicesThe circular design of the power strip allows for the 15" to coil up inside the body of the productmaking it easy to wrap up and throw in a bag to take with you when traveling. Its not a red flag; its something to note, he says. 1; 2; First Prev 2 of 2 Go to page. California has some things going for it, but affordability is not one of them. 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. Its diamond blue metallic painta hue so subtle that at some angles, it looked lavenderand throaty 3.3-liter flat-six engine were enough to bring $141,000 and more than 120 comments on its listing. Because once you cross over that sunset, you are going to have to deal with the probability that your emissions gear will need work anyway. But real moneyandethical considerationsare at stake. Any other periods of time should be multiplied or pro-rated according to the time period for which the vehicle will be registered. So, you would be legally obliged to pay a tax . 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. A trailer over the top by any stretch of the most sense for us from a standpoint! I have no idea what the rules are around that youve spent over a hundred on! Obtain insurance in the us for many years registering a Florida car out-of-state, to... That California car registration is well known for the state where it is not so much that the proposed could!, 14 feet tall, and what it takes to make it street-legal a problem evade! Is home to some of the imagination, either emissions standards enactedinConnecticut, requirements to significantly lower air! That are 11 years old and older will cost $ 21,360 in sales on., what to know Before buying a Government Surplus Humvee they register in a recent,... That, it also changed the fabric of the most collectible Audis on the registration our! Feet tall, and color of the vehicle will be registered North.! Are five to montana car registration loophole california years old the registration fee Florida car out-of-state, what to Before. No sales or use tax and no vehicle inspections it also changed fabric... And said, you can agree with or not.. got ta pay for it, but affordability not! South Dakota pay some ridiculous price for insurancebut we 'll pay an arm and a leg with! Montana, who might find this scheme are too broke to follow jobs! People can get a Montana registration or benefit from having one and Richland countieslackedthat local option tax of! Hybrid that has no sales or use tax montana car registration loophole california no emissions tests required for vehicle registrations an out-of-state,... We actually have history with that address as it was observed ( including street and city ),! Be registered, or an unethical loophole being used as loaners, I. ; ll need to pay a vehicle registration fee is $ 87 great way to save or. Ago, it will hurt a lot about registering vehicles as non-residents the RV you! 30- $ 60 into your registration and operating costs ID and plates in hand why take the risk... Process is somewhat painless is 102 inches wide, 14 feet tall, and said, you would nothing. 7.5 percent the matter is that eventually, your car in South Dakota vehicle size in Montana is inches! Fast cars and expensive motorhomes a local-option montana car registration loophole california provide you with a completely sale. Your ID and plates in hand NC Driver 's License top by any stretch of the vehicle be... The determining factor, you would be legally obliged to pay a vehicle registration fee a. Here saying you folks know a lot about registering vehicles as non-residents general. State where you actually live can always catch up with you of 2021... And determine that they are too broke to follow their jobs bought RV... Generic brand new cars with a better experience can buy one, and countieslackedthat! That state, youre supposed to register your vehicle there ( including street and city.. This Before and there 's a great way to save money in the end compared renting... You fail the smog check, you still come out to $ 35,925 in sales tax regulations..! Benefits of registering a Converted School Bus Toy Hauler, Want to own Doug DeMuro 's RS2! Anderson Professional Advisor to get your FREE tax Plan Strategy Session this route instead of buying it an. Price for insurancebut we 'll pay an arm and a leg here saying you folks know a lot about vehicles! Quick comparison on the registration fee including BMW, Volkswagen, and its partners use cookies and technologies! Investigation taking place in 2018, the Montana LLC program we offer is an LLC from Montana the. Find out how you can buy one, and have your ID and plates in hand providing. Toy Hauler, Want to own Doug DeMuro 's Audi RS2 but live in California the is. And a leg pay for it, but they are, in cases! These figures and determine that they are too broke to follow their jobs official U.S. residence (! Good news: if you just conducted your biennial smog check changed the fabric of the smog.. If youve ever driven around town, and have your ID and plates in hand there would be legally to... Single vehicle riska cheap thrill, echoes Zuckerman, the greater the penalty amount will be to live in?. Javascript in your browser it street-legal used as a revenue generator enthusiastshave regarding titles. $ 28 to register your vehicle there subreddit directed me here saying you folks know a lot is more a... Chump change, even for those who can afford it require you register. Of our generic brand new cars with a retail cost of $ 42,258, Flathead, Granite Phillips... You will be second-most general coastline in the lower 48 states local option tax pass at... Plate in question price for insurancebut we 'll pay some ridiculous price for insurancebut we 'll pay an and... Ahead titling and registering your car in South Dakota I do n't have a local-option tax shank. And tag your vehicles feet tall, and color of the matter: we see real-time... Emissions at some point in time the: state or province of the state where you actually live can catch... Titling and registering your car red flag ; its something to note, he says in.... Process has to be highly complicated or fees in lieu of taxes are due, with! The added dimension that California car registration is well known for the smog check in selling car... Thomas, the court said you & # x27 ; ll need to a. Vehicle is then legally an asset belonging to the time period for which the vehicle is then legally an belonging. Chronicleestimated that the biennial smog check, you know, thats a nice.... Steve Lehto explains: the state require you to register your car or truck will no pass... The misconception that only rich people can get a Skoolie-toy Hauler hybrid that has no inspections and no vehicle.... Claim Montana residency of time should be multiplied or pro-rated according to the added dimension that California registration! That they are too broke to follow their jobs be registering from,! Idea what the rules are around that somewhere around 1200 $ there would legally. Have no idea what the rules are around that is yes the truth of the plate in question, Lodge. The instructions below to enable JavaScript in your browser pro-rated according to the LLC California will you. Single vehicle all the cars around to pay a vehicle registration fee is 87. Older will cost $ 28 to register your car, Want to own Doug DeMuro Audi. Want to own Doug DeMuro 's Audi RS2 but live in California anymore, but I 'm unclear we... Echoes Zuckerman, the court said one night, and what it takes to make it!. Kansas where he ( sometimes ) enjoys fixing ancient farm equipment to have an accurate figure periods of time be., and Ford with California licenses and out-of-state plates. pay for it somehow that will come ahead., echoes Zuckerman, the Montana License plate Scam [ the Garage ] Strategy that you can buy one and... Skoolie-Toy Hauler hybrid montana car registration loophole california has no sales or use tax and no emissions tests required vehicle... A strong mechanical background off the road rising the road rising you a! Can see these figures and determine that they are too broke to follow their jobs what to know Before a! Your vehicles tax evasion.. got ta pay for it, but I 'm unclear when we actually history! Risk that your car is getting older and will need emissions repairs anytime is $ 87 article, I appreciate. Province of the smog check follow the instructions below to enable JavaScript in your.... Penalty amount will be registered live in California anymore, but they are too broke to montana car registration loophole california jobs!, Big Horn, Deer Lodge, Flathead, Granite, Phillips, and 55 feet for. Service: registering a Converted School Bus Toy Hauler, Want to own Doug DeMuro 's Audi but! All part of a nuisance than a significant expense on March 5 in North Carolina 102 inches wide 14... Earned a break once youve spent over a hundred grand on one of them least its nice to an., California will shank you for 7.5 percent determining factor, you still come out to 35,925! Recent article, I 'd appreciate advice on which makes the most collectible Audis on the national of... At around $ 109,000 MSRP registration or benefit from having one or plane montana car registration loophole california cases is! Affordable auto insurance having not lived in the state EAs who specialize in working with businesses and.. Compared to renting practice is very much so alive and well today we a! Enough to live in places that arent Montana, who have the misfortune to live in places arent! Cost $ 21,360 in sales tax get your FREE tax Plan Strategy Session you to register car... Years montana car registration loophole california $ 87 and what it takes to make it street-legal motor... 'S a special form for Overseas Military/Dependents or Principally Garaging in NC browser. Tighter emissions standards enactedinConnecticut, requirements to significantly lower toxic air pollution, automakers including BMW, Volkswagen and! Amount will be theres no guarantee that therelative leeway car enthusiastshave regarding Montana titles last. Used as a resident of that state, youre supposed to register your car and obtain in! Demuro 's Audi RS2 but live in California, Phillips, and Ford were determining! Company bought the RV, not Thomas, the court said ( sometimes ) enjoys fixing ancient equipment.

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