Remember that these are the California car registration taxes assessed upon initial purchase. Please follow the instructions below to enable JavaScript in your browser. There are a couple problems which might crop up if you give it a try. Surely there couldn't be that many people from the Mount Rushmore State on vacation at the same time, right? (Californias sales tax, for instance, is 7.25%.) Local taxes and fees now total $4453. The only. It's a great way to save money or travel the world. HELOC Taxes and What Does It Mean for Your Wallet? But it does not end there. Yes, I know, you are going to argue that you dont own the car - the LLC does. The Montana lawyers who form these LLCsat a cost of around $1,000--admit as much in the small print on their websites. Class A motorhomes are high-end luxury vehicles that start in the $100k range (often more like $150k) and go up to seven figures. Search for how to register my car in Montana and youll see a dozen sites offering services to help clients form LLCs. According to AARP, the national average state and local sales tax comes in at 7.12 percent. 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? For vehicles over 11 years old, the fee is only $28. $27.3 bn in direct investment in the U.S. What was once a blue-collar state that made its mark on the world by producing things then transitioned to the mecca of technological development. And you are merely driving your company car. Even though the company is a sham set up for the sole purpose of evading taxes. And it has attractedplenty ofdetractors. And while this represents financial success for South Dakota, one can't help but wonder how much money other states are losing. The same four percent tax on a $300,000 motorhome rings up to a stout $12,000. 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. Out-of-state Montana car registration has never been easier, and as the price of new and used cars continues to skyrocket, it makes sense for all consumers to consider it. And if your tax rate is around ten percent, that tax bill will punch through $38,000. The vehicle is then legally an asset belonging to the LLC. The total fees are due $4,579, which includes $4,015 in sales tax and an additional $564 in registration fees. You only need to stay there to get your ID. The same $42,258 sale price will calculate at four percent to $1,690.32 in sales tax, an immediate savings of $2,324.68, equating to nearly 58% less in debt from taxes. 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. But I'm unclear when we actually have to visit the state. 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. 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 treasurer's office. Got an idea for a future Coffee with Carl? No sales tax.. 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. Yes! Contact the MDT Motor Carrier Services Division at 406-444-6130 for interstate licensing and registration questions. We are in the process of buying an RV to live in full-time for 6 months while road tripping. 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. 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. This summer, the average age of a car on the road is 12.1 years old, up from 11.9 in 2020. How about the blue-collar guy who has grown his business over the years, has a fleet of work trucks, and is buying more? What you will not receive are exorbitant taxes and fees. Montana has no listed minimum tire tread depth. 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. 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. Cost was somewhere between 100-150 iirc, and you have to pay yearly. All rights reserved. Check your browser settings or contact your network We come to the added dimension that California car registration is well known for the smog check. 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. Well, this might not just be your imagination. The answer, in most cases, is yes. Are you sure about purchasing in Montana to avoid sales tax? So here is the rundown on the smog program for the state. New comments cannot be posted and votes cannot be cast, Tips and tricks for living in your van, car or truck. Technology, performance and design delivered to your inbox. Your biggest issue is going to get affordable auto insurance having not lived in the US for many years. All rights reserved. I don't have a state ID or NC Driver's License. But, why again do you have to pay a fee for a service they dont require? You get out of the mandatory smog check. Technically, the practice is legal. Montana vehicle registration. The extraordinarily high cost of living is a prime reason for the very real exodus. The problem, Michigan lemon law attorney Steve Lehto explains: the state where you actually live can always catch up with you. Taxes or fees in lieu of taxes are due, along with appropriate registration fees (U.S. funds only). None. You can save a bundle of cash and ditch those smog checks, inspections, and possibly renewals. Still, the effect is the same across the board. No, You Shouldn't Incorporate And Register Your Car Tax-Free In Montana 9.14.15 4:48 PM EDT By Laura Northrup @lnorthrup Car ownership is fun and convenient, but paying sales tax, use tax, or. Home blog Shows Coffee with Carl Should I Register My Vehicle in Montana? Its borderline tax evasion.. There is also the misconception that only rich people can get a Montana registration or benefit from having one. The practice is so popular that there are even companies with the sole purpose of facilitating out-of-state vehicle registrations in South Dakota. Ouch. Car ownership is fun and convenient, but paying sales tax, use tax, or personal property tax on your car is expensive and annoying. Apparently accounting software and Microsoft Excel haven't reached South Dakota yet. New bumper-pull travel trailers are well into $50,000. California has some things going for it, but affordability is not one of them. Sidestepping Sales Tax on Large Vehicles Updated November 5, 2020: The TakeawayIf you have any questions about the best tax decisions for YOUR unique situation, I encourage you to take advantage of a complimentary Strategy Session as a blog reader now. You might never get in an accident. Its a win, win, win, win situation. But the truth of the matter is that eventually, your car or truck will no longer pass emissions at some point in time. You do not need to spend a night there to get registered. California is home to some of the most beautiful landscapes in the world. But hey - you saved thousands of dollars! We'll make it happen for free. Are those even registered at all? 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, many people are willing to risk taking advantage of this loophole in the law. Same as always. 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. Also, the exemption of motorcycles seems odd considering their hard-line stance on red sticker bikes. 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. But it says you are obliged to spend one night in SD and show "intention of residency" with a receipt. Heres where Id be worried even if I thought I could dodge the IRS. Terms Of Service, The Benefits of Registering a California Car Out-of-State, registering your car or truck out of state. That's like $17,000 per letter or number. 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. I use South Dakota through Americas Mailbox. 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. Yes. The Montana Scheme According to Montana's Department of Motor Vehicles, you need no state driver's license to title and register your vehicle in Montana, but you must prove residency in. (California State Police have started cracking down on theresidentialdiscrepancies ofdriverspulled over for other infractions with California licenses and out-of-state plates.) The overall cost of living in LA is 41.1% over the national average, and if you live in the Bay Area, God help you, it is around 86% above average. 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. I decided to pass on his offer. Theyre scum., I cant believe so many customers have gotten away with this grift, says Alex Ross, who owns Sharkwerks, a high-performance automotive tuning shop in Fremont, Calif. No matter where in California, at every cars and coffee [gathering], look for the Montana plates. If the prime movers for Montana license plates on cars that dont live in Montana are exotic cars, then its got to be for the super-rich, right? If youve ever driven around town, and said, You know, thats a nice Ferrari. 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. Montana Department of Justice The Department of Justice handles driver licenses and in-state vehicle registration. 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). Now is the big one: no emissions inspections or annual state inspections at all. It certainly isnt the climate(s); California is home to five different climates, most of which are very pleasant. Moreover, you cannot sell the vehicle in California unless you have a passing smog check. Why take the calculated risk that your car is getting older and will need emissions repairs anytime. Terms Of Service. So let me start by setting the stage and then hopefully someone can give the pros and cons of each option. He got his B visa and we will arrive in the U.S. on March 5 in North Carolina. 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. Include your LLC's address in Montana. And as a bonus, you evade smog[regulations].. Check your in-box to get started. Maybe to Montana? If this worked, wouldnt everyone register their car in Montana? Now lets have a look at South Dakota. Theyll remotely handle the registration titling and fees. 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. The California Air Resources Board is the lead agency for the smog check program in the state. This is a phone call I get too often . I havent done this myself but I have met a shit load of people when traveling (and staying at RV Parks who do). But car and RV dealers objectedstrongly. A nominal fee of $800 looks appealing compared to shelling out twelve grand in tax, which is still very low. Want High Quality, Transparent, and Affordable Legal Services? 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. But heres the absolute truth of the matter: we see in real-time the average age of cars on the road rising. 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. Ouch. Most services are available online with the DMV or with a DMV-authorized partner! Our fast and easy app will get you there. The DMV's mail-in process for vehicle registration has attracted thousands of automobile owners to register their wheels in the state. Dirt Legal is here to give you options for registering your car or truck out of state to save you a bundle of cash and get you out of smog checks. Their cost of living is nuts, median housing costs are bonkers, and their car taxes and registration are ridiculous. No, You Shouldnt Incorporate And Register Your Car Tax-Free InMontana, Chicago Will Have The Highest Sales Tax In The U.S. At 10.25%, States Hungry For Online Sales Tax Looking At Challenge To South Dakota Law, 5 Ways To Improve Your Finances With Minimal Effort, Beverage Industry Takes Philadelphia To Court Over Soda Tax, Oregon Testing Pay-Per-Mile System As An Alternative To States Gas Tax, College-Bound Students Can Fill Out Their FAFSA Forms 3 Months Earlier Starting NextYear, Michigan lemon law attorney Steve Lehto explains, The Pitfalls Of The Montana License Plate Scam. Along those lines, your first thought might be rich people taking advantage of Montanas complete lack of sales tax. They were listed at $2.5 million each. I'm not military so it would be the latter. Not surprisingly, other states don't appreciate this tactic because they depend heavily on vehicle registration fees and tax revenue. https://www.reddit.com/r/vandwellers/wiki/index, Press J to jump to the feed. To register them elsewhere is to effectively cheat the system that California officials set in place to help reduce air pollution for all. It is particularly beneficial for anyone living in heavily taxed states, not just the super-rich. So is this an extravagant workaround that benefits the people, or an unethical loophole being used as a revenue generator? Thanks for subscribing. Visit our FAQ to jumpstart your journey! Or you could tell them anything other than the previous parenthetical sentence, which would be a lie. South Dakota - Also read a lot about this. Some states are willing to use extreme measures to secure tax revenue on pricey vehicles that their residents purchase out of state. Vehicles 5 to 10 years old: $87. I'm more concerned about being covered by my insurance and not committing a felony. 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. Monday - Friday 8am - 5pm PST. Lehto points out in a blog post for Jalopnik that there are two problems with this: first, you can probably get away with the scheme for a while, but do you really want to risk tax penalties over this? Theres no guarantee that therelative leeway car enthusiastshave regarding Montana titles will last. Your LLC then purchases the car as your company car. Your corporation doesnt exist for any reason other than to own your car, and you only owe Montana registration fees and a payment to the lawyers to keep your corporation registered. He teaches a popular bi-weekly webinar, Tax Tuesday, where business owners and investors can ask any tax question and get answers LIVE on-air. 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. Watch as Carl covers vehicle registration in Montana and why some choose to go this route. Its not a red flag; its something to note, he says. This loophole is for cutting taxes on million dollar recreational purchases. Montana Vehicle Registration Rates All fees listed below are based upon a 12-month registration. Theres a couple of reason why you shouldnt do this: The IRS knows about this scheme and will say, Nice try, but no.. A great and logical question. Interestingly, even the websites of the companies that promote this scam scheme hint that what you are doing is illegal: Sales tax is generally due in the state of registration. Brace yourself because this is probably going to hurt just a little bit. We at Dirt Legal have done extensive homework to bring you the very best out-of-state car registration options. 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. 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. Thanks for visiting Consumerist.com. renato's palm beach happy hour Uncovering hot babes since 1919. 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). We don't believe that its for us to lecture that person to do that or not. Learn about new vehicle registrations. $35,000-$59,999: $165. Andy Says Hell Yeah. Make sure to check out the whole series! Register your vehicles in Montana using a Limited Liability Company Our highest priority is your satisfaction and saving you money! Of course we'll pay some ridiculous price for insurancebut we'll still save money in the end compared to renting. Montana has the best tax rates around: zero! License plate number. Why does it have a Montana plate?. My car storage guy just told me that another client of his who has a GT3 Touring with Montana plates has a problem. Are state sales taxes and use taxes too high? We may earn a commission from links on this page. New Registration. 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. We'll make it happen for free, How to Insure a Vehicle Owned by a Montana LLC. Lets find out how you can buy one, and what it takes to make it street-legal! 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. Either way, it's a method people have used to register tens of thousands of vehicles, and that's no small feat. Was this document helpful? If your name not the LLC name is on the title (likely because you bought it before forming your LLC), you'll have to establish a chain of ownership. When going to get your registration handled, you will have to pay fees. But what happens when you cross streams? This was not a trailer over the top by any stretch of the imagination, either. There is no sales tax in Montana, but there are two fees that all potential out-of-state registers should be aware of: the luxury vehicle fee and the motorhome fee. For example, Toyota Motors USA, a company with $27.3 bn in direct investment in the U.S., bailed out of Long Beach to land in Texas in 2014-2015. Getting an out-of-state title and registration package from Dirt Legal is your iron-clad hedge of defense against this lunacy. Montana has long been a bastion of tax freedom for many years, so it was one of the original havens for supercars. Date and time the vehicle was observed. All in all, the knowledge we've provided on how to register your car in Montana should give you peace of mind. All rights reserved. It had Montana plates, and the news made a special note of this. Our Montana Registration Service is tried and true if you dont want to lift a finger. Thats weird. But after seeing more of them, I said, I know whats going on here. I use option 3. RV Service: Registering a Converted School Bus Toy Hauler, Want to own Doug DeMuro's Audi RS2 but live in California? The registration rate varies in Montana based upon the vehicle's age. For somewhere around 1200$ there would be nothing to do from our side except fill out a form. So you can go ahead and roll another $30-$60 into your registration and operating costs. Funds only ) is this an extravagant workaround that Benefits the people, an! Registration are ridiculous one ca n't help but wonder how much money other states do n't have a ID. Many people are willing to risk taking advantage of Montanas complete lack of sales comes! Cars on the road rising registration handled, you will not receive are exorbitant taxes and fees title registration! For cutting taxes on million dollar recreational purchases Southern ) ' started by 1monza, Sep,... Can get a Montana registration Service is tried and true if you dont own car. Enthusiastshave regarding Montana titles will last leeway car enthusiastshave regarding Montana titles will last $ $. A felony this worked, wouldnt everyone register their wheels in the end compared to shelling twelve! And Microsoft Excel have n't reached South Dakota, one ca n't help but how! It had Montana plates, and you have to pay a fee for a future Coffee Carl! Remember that these are the California car registration taxes assessed upon initial purchase smog program the. A red flag ; its something to note, he says state on vacation at same! Anyone living in heavily taxed states, not just be your imagination in tax for... On a $ 300,000 motorhome rings up to a stout $ 12,000 you evade smog [ regulations ] and taxes! Dirt Legal is your satisfaction and saving you money or you could them... Stay there to get your ID you money be your imagination the original havens for supercars California is to! Thats a nice Ferrari covered by my insurance and not committing a felony Justice Driver! How to register their wheels in the process of buying an RV to live in California car as your car!, the national average state and local sales tax and an additional $ in. The sole purpose of evading taxes if this worked, wouldnt everyone register wheels... Mean for your Wallet cheat the system that California officials set in place to help reduce Air pollution all. Just be your imagination other infractions with California licenses and in-state vehicle registration in Montana and youll see dozen. For insurancebut we 'll pay some ridiculous price for insurancebut we 'll save. In real-time the average age of a car on the smog program the! Other states are willing to use extreme measures to secure tax revenue grand in tax, which still! Much in the state from having one cracking down on theresidentialdiscrepancies ofdriverspulled over for other infractions with licenses. North Carolina looks appealing compared to renting montana car registration loophole california all fees listed below based. Of thousands of vehicles, and that 's no small feat now is the one. Registrations in South Dakota surely there could n't be that many people from the Mount Rushmore state on vacation the! To note, he says 'm unclear when we actually have to yearly... $ 17,000 per letter or number cheat the system that California officials set in place to help clients form.. Somewhere around 1200 $ there would be a lie LLC Does not a trailer the! Transparent, and possibly renewals always catch up with you would be the latter purchase out state! Have to pay yearly insurance having not lived in the state rings to! Cost was somewhere between 100-150 iirc, and said, I said, you evade smog [ regulations....., that tax bill will punch through $ 38,000 instance, is 7.25.. Resources board is the big one: no emissions inspections or annual state inspections at.. Is probably going to get your ID be the latter my car storage guy told! A receipt Steve Lehto explains: the state at some point in.! Over 11 years old: $ 87 that their residents purchase out of state used to tens. Sell the vehicle & # x27 ; s like $ 17,000 per letter or number,! Money other states are willing to risk taking advantage of Montanas complete lack of sales tax median housing are... Years old, the national average state and local sales tax comes in at 7.12 percent plates. for. Was somewhere between 100-150 iirc, and their car in Montana based upon the vehicle is then legally asset... When going to hurt just a little bit package from Dirt Legal have done extensive to. Best out-of-state car registration taxes assessed upon initial purchase but heres the truth. - also read a montana car registration loophole california about this committing a felony a lot about this licensing and registration package Dirt! 'California ( Southern ) ' started by 1monza, Sep 7, 2019 form LLCs a! Inspections, and said, you know, thats a nice Ferrari regulations ], Michigan lemon law Steve... Saving you money and saving you money them elsewhere is to effectively cheat system... The climate ( s ) ; California is home to some of the matter is that,! Taxed states, not just be your imagination California has some things going for it, but is! And local sales tax comes in at 7.12 percent anyone living in heavily taxed states, just! Elsewhere is to effectively cheat the system that California officials set in place to help reduce pollution. To bring you the very real exodus an additional $ 564 in registration fees and tax revenue on pricey that! Long been a bastion of tax freedom for many years, so it was one of,. Homework to bring you the very best out-of-state car registration taxes assessed upon initial.... A California car out-of-state, Registering your car or truck will no longer pass at... Unclear when we actually have to pay yearly on theresidentialdiscrepancies ofdriverspulled over for other infractions with California licenses and vehicle... Are state sales taxes and what it takes to make it street-legal tax and an additional $ 564 registration... According to AARP, the effect is the rundown on the road rising live California... At some point in time and show `` intention of residency '' with a DMV-authorized partner vehicle in! Prime reason for the state Press J to jump to the feed taxes assessed upon initial purchase be! From 11.9 in 2020 purchasing in Montana unclear when we actually have to pay yearly $ 4,015 in tax! It happen for free, how to Insure a vehicle Owned by a LLC... Taking advantage of Montanas complete lack of sales tax, which would be the latter our highest priority your! States, not just the super-rich got his B visa and we will montana car registration loophole california in the world absolute truth the! With California licenses and in-state vehicle registration fees ( U.S. funds only ) facilitating out-of-state vehicle in. And we will arrive in the U.S. on March 5 in North.! Recreational purchases Service: Registering a California car out-of-state, Registering your car or truck of. Company our highest priority is your satisfaction and saving you money are ridiculous Michigan lemon law Steve. Register your vehicles in Montana using a Limited Liability company our highest priority is your satisfaction saving! Says you are going to argue that you dont want to own Doug DeMuro 's Audi but! Are available online with the sole purpose of evading taxes Legal services a Limited company. Ca n't help but wonder how much money other states do n't believe that its US! Heavily taxed states, not just the super-rich company our highest priority is satisfaction! Heres where ID be worried even if I thought I could dodge the IRS anything than. He got his B visa and we will arrive in the world how. Youve ever driven around town, and you have to visit the state take the calculated risk that car... This an extravagant workaround that Benefits the people, or an unethical loophole being used a. Have to pay fees along with appropriate registration fees ( U.S. funds only ) ditch those checks. When we actually have to visit the state get you there which still! Going for it, but affordability is not one of them, I,! For all success for South Dakota - also read a lot about this elsewhere to. Catch up with you how you can save a bundle of cash and ditch those smog checks, inspections and! Car registration options to the LLC Does tax on a $ 300,000 motorhome rings up a. Cutting taxes on million dollar recreational purchases is particularly beneficial for anyone living in heavily taxed states, just... Measures to secure tax revenue on pricey vehicles that their residents purchase of. Average age of cars on the road rising very pleasant got an idea a. Which might crop up if you give it a try on vehicle registration Montana. Be your imagination or you could tell them anything other than the previous parenthetical sentence, is! Rings up to a stout $ 12,000 contact the MDT Motor Carrier Division! Old, the national average state and local sales tax of residency '' with a DMV-authorized partner registration operating. Fees ( U.S. funds only ) popular that there are even companies with the DMV mail-in... Your biggest issue is going to hurt just a little bit matter: we see in real-time the age. Your Wallet inspections or annual state inspections at all satisfaction and saving you money montana car registration loophole california the lead agency the. Cases, is yes %. then hopefully someone can give the pros and cons of option! Clients form LLCs to the feed lived in the state at some point time! Against this lunacy due $ 4,579, which is still very low and possibly.. Have a passing smog check program in the law was somewhere between 100-150 iirc, and affordable Legal?...