And youre sort of poking the bear there with your local state government, as well as the IRS. 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. So let me start by setting the stage and then hopefully someone can give the pros and cons of each option. 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. According to Montana state law, falsifying your address or other personal information in the You can schedule online or by calling 888.871.8535. On the national average of 7.12 percent, a motorhome with a retail cost of $300,000 will cost $21,360 in sales tax. Montana Uniform Laws. Technically, the practice is legal. Collateral Security Interests A lending institution files a security interest against a vehicle currently titled in your name through the Vehicle Services Bureau. 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. Theres no longer a need to spend money on attorneys to create your legal papers. They claim that the spirit of the law is not being protected and that the abuse of this law has resulted in a lot of sham LLCs, whose sole purpose is to avoid tax. 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. But real moneyandethical considerationsare at stake. Fill out the form for a free consultation. The bad news is that you shouldnt act upon any of the information without consulting a qualified professional attorney who will, probably, bill you by the hour. Then, ensure the exact name of your LLC is listed as the buyer of the car. 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. Montana has no sales or use tax and no vehicle inspections. This fee is in addition to: Fee Schedule for Buses, Heavy Trucks and Truck Tractors. But this is not limited to fast cars and expensive motorhomes. The scam works like this: You hire a Montana law firm to form a corporation or limited liability company (LLC) for you. If someone previously registered a vehicle in another state, the Montana DMV will require him or her to show a proof of sales tax payment. 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. Im not entirely sure if you need a SD address or not to get registered. The registered owner must submit the title or if the title is lost, the Application for Certificate of Title, a completed Notice of Security Interest/Lien Filing/Lien Release/Repossession form or the generic, a security interest/lien release on letterhead with a complete vehicle description and lien information. So how much can the affluent benefit from a Montana car registration? Application for Replacement Certificate of Title, Vehicle Identification Number Inspection Certificate, Boats, Personal Watercraft and Motorized Pontoons, Light Vehicles (cars, vans, pickups & SUVs). 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. Enjoy! You must have your bill of sale notarized. You must be logged in to perform that action. 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. 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. Robert L. Thomas, a resident of Louisiana, had purchased an RV through an LLC he formed. Fax: 702.664.0545, Office Hours However, the Louisiana Department of Revenue found out about the purchase and claimed that Mr. Thomas owed the state money in terms of unpaid taxes. Your agent might be able to speed this process up at some extra cost. This also includes our County DMV fees. 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. Not so fast, Slick. Pickup campers are an exceptionthey must be titled, but are not registered. This is odd for a remote state of only one million residents. 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. Fee Schedule The fees vary according to the Manufacturers Rated Capacitythe manufacturers rated gross vehicle weight for a bus or heavy truck or the manufacturers rated gross combined weight for a truck tractor. Since Montana is not a title holding state, the Montana title is mailed to the registered owner, and the lending institution receives a Notice of Security Interest/Lien Filing/Lien Release/Repossession form with which it can either release a security interest or apply for a repossession title. They create an LLC in Montana and then buy and register the vehicle in the LLC's name. However, Montana isn't currently Sorry, I dont know the insurance company nameI was sort of interested in the conversationbut I owned my 5th wheel outright. While it's legal to purchase pricey vehicles and avoid paying sales tax in Montana, other states frown upon the practice when their residents set up LLCs out of state for the sole purpose of avoiding these taxes. The basic concept of the process is known to many, but the specifics are a little harder to nail down. Permanent registration Under 61-3-321(3)(a-b), MCA all trailers must be permanently registered. 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. I use option 3. Yes! County Option Tax Counties may impose a county option tax based on the manufacturers suggested retail price, depreciated according to the schedule established in 61-3-503, MCA The age of the vehicle is determined by subtracting the model year from the current calendar year. At the time, theBozeman Daily Chronicleestimated that the proposed tax could raise $2.5 million annually for the state. A Montana LLC (Limited Liability Company) combines aspects from other business entities: corporations, partnerships, and sole-proprietorships. 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. Depending on where youre at, it might seem like you see a disproportionate amount of Montana license plates. Close observers would also have noticed a detail far more polarizing than the semi-lavender paint job:The Turbo came with a clean Montana title in the name of the sellers LLC, the listing said. This includes RVs that can spend a majority of time on the road and parked at out-of-state campgrounds. Montana requires every driver to register their personal vehicle for it to be driven legally. Fees below will include the 3% Administrative Fee when transaction is conducted. The practice of registering a collectible car there, regardless of where itislocated in reality, is done in orderto avoid paying taxes and shirkemissions standards. https://www.reddit.com/r/vandwellers/wiki/index. I don't have a state ID or NC Driver's License. Yes, submit to your county treasurers office. 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. Montana Highway Patrol Salary and Retention Fee $10.30, $10 Montana Highway Patrol Salary and Retention Fee, county tax, $9 optional state parks support, certain special plate fees and, for light trucks, the gross vehicle weight (GVW) fees, $5 insurance verification fee if existing plates are kept on the vehicle, $10.30 Montana Highway Patrol Salary and Retention Fee, $5.15 insurance verification fee if existing plates are kept on the vehicle when permanently registered. 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. According to AARP, the national average state and local sales tax comes in at 7.12 percent. Montana residents moving to another county may continue to use their current plates until their annual registration renewal is due. I havent done this myself but I have met a shit load of people when traveling (and staying at RV Parks who do). Montana Limited Liability Companies. The bureau then issues a clear title. 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. For example, if someone took out a title loan on a vehicle and did not meet the specified repayment schedule, the lender could collect its security interest by taking the vehicle. I found myself in Salt Lake City and saw the same thing. Motor homes must also pay: Motor homes that are used as commercial vehicles and are issued truck plates must also pay the gross vehicle weight (GVW) fee, 61-10-201, MCA. You may also have noticed quite a few South Dakota license plates, which is not a coincidence. Cost was somewhere between 100-150 iirc, and you have to pay yearly. Just ask your county treasurer. You would then buy the vehicle in the name of that LLC. 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? Snowmobiles that are used exclusively as rentals may be registered annually for the first two years, after which they must be permanently registered. Here youll need to include relevant information such as the LLCs name, duration, mailing address, information of the registered agent and members/managers, the structure of management, and lastly, the signature and title of the person filing the Articles. The fee goes down in increments depending on how old the vehicle is. Thats a whole truck! I thought sales tax was based on where the vehicle gets registered. Dont poke the bear! 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