Though we find it hard to believe, the report claims that there isn't an exact figure that shows how much extra money the South Dakota Department of Revenue has earned from this practice, as the registration fee varies based on vehicle age, type, and weight class. 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. 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. I use option 3. Still, many people are willing to risk taking advantage of this loophole in the law. Light vehicle registrations . I have no problem utilizing said loophole. Montana Vehicle Registration Renewal. From my exploratory research using the linked calculator, most counties and cities ended up averaging about ten percent in sales tax for an automobile. This is the typical structure of the Montana scheme where somebody creates an LLC in Montana for the sole purpose of owning and registering the car in Montana and has no other connection with the state. Montana has no listed minimum tire tread depth. 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. Why take the calculated risk that your car is getting older and will need emissions repairs anytime. It's $10,000 per inch of license plate. Once it fails, you have to fix it to pass emissions testing, which is not cheap. People from states usually have staggering sales taxes and oppressive inspection requirements to contend with just to get on the road. This is a lot of money, even if you have a McLaren P1. 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. If youve ever driven around town, and said, You know, thats a nice Ferrari. 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. Especially if you are using a Montana LLC? John McCoy is a lifelong car and truck enthusiast and has a strong mechanical background off the road. California is home to some of the most beautiful landscapes in the world. I have no sympathy for the State of California, as in the state government itself, but a significant amount to the blue-collar workers who have been left in the lurch for decades. The same four percent tax on a $300,000 motorhome rings up to a stout $12,000. We see, obviously, a lot of sellersmany do it,and buyers are interested in doing it, Nonnenberg says. 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. For vehicles over 11 years old, the fee is only $28. He got his B visa and we will arrive in the U.S. on March 5 in North Carolina. In summary: try being honest and paying the taxes you owe. Even in a very modest state with a four percent sales tax, the tax bill for a $150,000 light luxury vehicle is still $6,000. On top of this, you have to either be extorted with the smog abatement fee or have your car smog checked. 2 mtchalcedony 1 yr. ago Got an idea for a future Coffee with Carl? That question depends on a lot of variables. Lets find out. In 2017, Montana legislators proposed a sales tax of up to 1% on cars and recreational vehicles worth more than $150,000; aimed at out-of-state enthusiasts, House Bill 650 was nicknamed the. Can be from a hotel or campground. 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? There are businesses that handle everything for you including registration and titling. As the attorney in this relationship, I have to be the one to tell you the bad news, and its twofold bad news. Vehicle Services: Title, Registration, & License Plates. There are a couple problems which might crop up if you give it a try. Yeah that's lame. 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. Seems I can do everything by mail from a company like Americasmailbox. Montana LLC - I've read a lot about it so far and it seems straight forward. However, Montana isn't currently cracking down on shell corporations set up for the sole purpose of purchasing vehicles in the state because state law doesn't require someone to specify the LLC business purpose when they register the LLC. (California State Police have started cracking down on theresidentialdiscrepancies ofdriverspulled over for other infractions with California licenses and out-of-state plates.) Learn about new vehicle registrations. When you sign the bill, complete the buyer section the same as you would a Montana title application. This process earmarks the vehicle to an owner and is necessary to score a license plate needed to traverse public roads. 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? As of August 2021,Big Horn, Deer Lodge, Flathead, Granite, Phillips, and Richland countieslackedthat local option tax. 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. This part of the smog check process is somewhat painless. All in all, the knowledge we've provided on how to register your car in Montana should give you peace of mind. We aren't so concerned about those costs when you consider that renting an RV for this duration would be around 40k. This summer, the average age of a car on the road is 12.1 years old, up from 11.9 in 2020. Some states like California are poised to lose hundreds of dollars per vehicle if its residents register the vehicle outside of their home state. Send us a note: tips@thedrive.com. As a resident of that state, youre supposed to register your vehicle there. License plate number. A Ford Transit starts at $35,925. In 2017, Montana legislatorsproposed a sales tax of up to 1% on cars and recreational vehicles worth more than $150,000;aimed at out-of-stateenthusiasts,House Bill 650was nicknamed the Ferrari tax.. Re: your last statement move somehwere that isnt a shithole. Contact the MDT Motor Carrier Services Division at 406-444-6130 for interstate licensing and registration questions. But dont worry, you dont have to get to it immediately: the infinitely reasonable State of California will grant you a generous 60-day temporary operating permit (TOP), for a nominal fee of $50, of course. 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 basic concept of the process is known to many, but the specifics are a little harder to nail down. Theres a couple of reason why you shouldnt do this: The IRS knows about this scheme and will say, Nice try, but no.. 2023 MOTORSPORT NETWORK. The LLC registers and plates the vehicle in Montana. 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. Press question mark to learn the rest of the keyboard shortcuts. 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. This post is part of our Out of State Series explaining the benefits of using our Montana LLC Program to register your vehicles out-of-state. 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. This is not chump change, even for those who can afford it. In certain circles, Montana registration is a touchy subject. MC 61-10-102 MC 61-10-103 MC 61-10-104 Tires Tires must be in safe operating condition, without any bulges or exposed cords. 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. Ultimately,an$825luxury fee was added to ordinary registration costs for vehicles worth more than $150,000. Ouch. 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. I just wanted to show you why some people do this since it was a question that comes up from time to time. He wrote The Lemon Law Bible and Chryslers Turbine Car: The Rise and Fall of Detroits Coolest Creation. Hire the top business lawyers and save up to 60% on legal fees. You would then buy the vehicle in the name of that LLC. Heres how it works: you pay a few hundred bucks to a law firm in Montana to register a limited liability corporation. Thanks for visiting Consumerist.com. 2022Recurrent Ventures. 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. I was thinking, Huh, Montana. It didn't take long before he shared his secret with the world, even though he couldn't point out Clay County on a map. 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. FerrariChat.com has no association with Ferrari S.p.A. 2023 FerrariChat. 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. All rights reserved. In order to register your motorized scooter, you need to complete a title application and prepare yourself for the payment of the following fees: Permanent registration fee: Street-legal fee: $53.25. Dealer plates (the paper ones with the dealer's name) are legal to drive on, but only for a limited time. The Benefits of Registering a Florida Car Out-of-State, What to Know Before Buying a Government Surplus Humvee. The DMV's mail-in process for vehicle registration has attracted thousands of automobile owners to register their wheels in the state. Last but not least, there is the idea that this process has to be highly complicated. We at Dirt Legal have done extensive homework to bring you the very best out-of-state car registration options. Whoops! https://www.reddit.com/r/vandwellers/wiki/index, Press J to jump to the feed. The Drive reached out to the South Dakota Department of Revenue to see how this number has fluctuated since 2018 but did not receive a response at the time of writing. (Californias sales tax, for instance, is 7.25%.) It has gotten so out of hand, even people in Florida do the Montana tax grift, Ross says. In California, by contrast, owners must ensure that all vehicles made after 1975 meet emissions standards and can pass safetyinspections. It has the second-most general coastline in the Lower 48 states. A fee of $800 is assessed for motorhomes with retail values over $300,000. In 2021, fully 10% of all McLaren P1s ever madecars worth well over $1 million apiecewere registered in Montana,accordingto the Montana DMV. It is not so much that the biennial smog check is pricey; it is more of a nuisance than a significant expense. Penalty fees are assessed in addition to any other fees due. For vehicles that are five to ten years old the registration fee is $87. 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