montana car registration loophole california

I just wanted to show you why some people do this since it was a question that comes up from time to time. John McCoy is a lifelong car and truck enthusiast and has a strong mechanical background off the road. View all online services Renew Your Vehicle Registration Renew your Driver's License or ID Card It has gotten so out of hand, even people in Florida do the Montana tax grift, Ross says. And youre sort of poking the bear there with your local state government, as well as the IRS. 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. Vehicle Services: Title, Registration, & License Plates. You get a Skoolie-toy hauler hybrid that has no name. 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. This supercar has an MSRP of $501,900, with the prospective buyer on the ropes for $44,167.20 in tax alone. Also, there are no inspections of any kind in South Dakota. We see, obviously, a lot of sellersmany do it,and buyers are interested in doing it, Nonnenberg says. On the national average of 7.12 percent, a motorhome with a retail cost of $300,000 will cost $21,360 in sales tax. The same logic applies to registration in other states of convenience as well. There are a couple problems which might crop up if you give it a try. According to Zip Recruiter, the average salary for Los Angeles is $68,118, a paltry 2.18% over the national average, whereas the average cost of a house is $915,000, 144% over the national average of $374,900. Any other periods of time should be multiplied or pro-rated according to the time period for which the vehicle will be registered. 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. Lets find out! 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. Toby is an attorney on a mission to help investors and business owners keep and grow more. California is home to some of the most beautiful landscapes in the world. Not sure about the insurance part. The maximum vehicle size in Montana is 102 inches wide, 14 feet tall, and 55 feet long for a single vehicle. Well, what kind of insurance do you need if you are registering you whip out of state? The people who have Montana license plates are like the people who put the fake handicap badges in their car, says Paul Zuckerman, an attorney in Los Angeles and avid car collector. Several people I know of use South Dakota. We've got the cure. In the end, I dont recommend anyone doing this. 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. Inspections got you down? Why Is Everyone Registering Their Cars in Montana? https://jalopnik.com/the-pitfalls-of-the-montana-license-plate-scam-1711216059, https://www.chp.ca.gov/notify-chp/cheaters-out-of-state-(out-of-state-registration-violators), (You must log in or sign up to post here. Depending on the circles you travel in, Id be willing to bet that you probably see many Montana plates if you frequent RV parks or car meets. 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 does not include the California car registration fees, nor does it include the smog check. Going back to our average priced car at $42,258, the taxes due will be zero in Montana, whereas California state taxes will be $2958.06 and local taxes and fees can easily exceed $4500. So here is the rundown on the smog program for the state. Speak with an Anderson Professional Advisor to get your FREE Tax Plan Strategy Session. Thanks for visiting Consumerist.com. Terms Of Service, The Benefits of Registering a California Car Out-of-State, registering your car or truck out of state. Sometimes dealer cars are used as loaners, but I have no idea what the rules are around that. 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. Its comical., Randy Nonnenberg, the founder of BAT, is more circumspect, although hes quick to say he has nopersonal vehicles bearingMontana plates. All rights reserved. You must be logged in to perform that action. My car storage guy just told me that another client of his who has a GT3 Touring with Montana plates has a problem. However, as we will see, this may not be the wisest decision. The fee goes down in increments depending on how old the vehicle is. You get out of the mandatory smog check. But these numbers havent even scratched the surface of what high-end RVs cost. 1; 2; First Prev 2 of 2 Go to page. 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. Heres how it works: you pay a few hundred bucks to a law firm in Montana to register a limited liability corporation. You would then buy the vehicle in the name of that LLC. Go. It would be preferable to have a business connection in Montana if you want this to make sense. Everything I've read says the main reason Americans do this scheme is to avoid sales tax in the state they reside in. Montana has no sales or use tax and no vehicle inspections. 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. You own the LLC outright. 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. Montana LLC - I've read a lot about it so far and it seems straight forward. 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. Likewise, we offer a New Mexico LLC for our South Dakota option, which affords the same sort of protection; the asset belongs to the LLC rather than you. Of course we'll pay some ridiculous price for insurancebut we'll still save money in the end compared to renting. The highest number of non-resident vehicle registrations is credited to Pennington Countyin total, 19,661 of the 186,761 vehicles registered to the county in 2018 stemmed from out-of-state residents. 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. Vehicles that are 11 years old and older will cost $28 to register. 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. No smog checks before selling your vehicle. For cars under four years old, this can be as much as $217. tighter emissions standards enactedinConnecticut, requirements to significantly lower toxic air pollution, automakers including BMW, Volkswagen, and Ford. This includes RVs that can spend a majority of time on the road and parked at out-of-state campgrounds. Montana residents do not have to pay the sales tax on their vehicles. You must have JavaScript enabled to experience the new Autoblog. You might never get in an accident. Can Dirt Legals services work for you? 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. Can anyone legally register their car in Montana? The reasons why Montana vehicle registrations are so popular expand to businesspeople. 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. 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. For vehicles that are five to ten years old the registration fee is $87. This was not a trailer over the top by any stretch of the imagination, either. We aren't so concerned about those costs when you consider that renting an RV for this duration would be around 40k. 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. This is not chump change, even for those who can afford it. 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. You can see these figures and determine that they are, in fact, insane. Those days were the best. Oh, thats interesting, I thought. So, on top of the issue of a depleted job market for the middle-class, housing costs are primarily unaffordable for those same people. All you need is a passport or birth certificate along with a campground or hotel receipt to get the ID. Some states are taking measures to crack down on residents who set up shell corporations in other states, including suing for tax evasion. Got a tip? One of the most popular places for out-of-state buyers to flock is, in fact, South Dakota. $5,000-$24,999: $55. A Ford Transit starts at $35,925. And as we touched on before, Montanas lack of inspections and emissions testing are strong reasons. So, if you have a car and hold the title, you do not need to undergo a smog check so long as it is 1) four years old or newer or 2) eight years old or newer and you have been paying your smog abatement fee. In a recent article, I quoted a new fifth-wheel trailer at around $109,000 MSRP.. Tax Attorneys, CPAs & EAs who specialize in working with businesses and investors. However, if you like the view, the beaches, and the pleasant climate, it is understandable why you would not want to leave. Plus, am I committing insurance fraud saying that I reside there? 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. Now if I got pulled for speeding maybe they would question me. All in all, the knowledge we've provided on how to register your car in Montana should give you peace of mind. Sfo is still safe and easy to navigate via car or on foot. Husband is German citizen. Our Montana Registration Service is tried and true if you dont want to lift a finger. Chain of ownership document (original copies). Also, since you will be registering from out-of-state, we offer a service for annual renewals for only $119. Both my husband and I have a German and International Driver's license. Its a win, win, win, win situation. It has the second-most general coastline in the Lower 48 states. (Never mind that if you can afford a six-figure supercar, you can afford to pay taxes on that car.). 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. Vehicles between five and ten model years: $87. The registration rate varies in Montana based upon the vehicle's age. $25,000-$34,999: $110. Its a riska cheap thrill, echoes Zuckerman, the LA lawyer. Seems I can do everything by mail from a company like Americasmailbox. Penalty fees are assessed in addition to any other fees due. Well, that will come out to $35,925 in sales tax. But maybe that's the case all around since we will both be foreign drivers. It might even be a good idea. At the time, theBozeman Daily Chronicleestimated that the proposed tax could raise $2.5 million annually for the state. But the interest was traditionally by the affluent looking for ways to keep costs down on high-end sports cars, or it was expensive motorhomes looking for the same. Okay, so back to the exotic cars. 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? I thought sales tax was based on where the vehicle gets registered. 2022 Dirt Legal. Do you need legal help with vehicle registration using an LLC? Monday - Friday 8am - 5pm PST. As of October 2017, Consumerist is no longer producing new content, but feel free to browse through our archives. For vehicles that are eight years old and newer, lucky you! Street and off-highway legal fee: $114.50. 2 petiteminotaure 1 yr. ago Have you done this? You do not need to spend a night there to get registered. Its not a red flag; its something to note, he says. Or you could tell them anything other than the previous parenthetical sentence, which would be a lie. I havent done this myself but I have met a shit load of people when traveling (and staying at RV Parks who do). For what its worth. If you do not receive a billing notice approximately 60 days before your vehicle's registration expires, please call us at 1-800-777-0133 to find out what your fees are. Yes! 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. Was this document helpful? 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. Sidestepping Sales Tax on Large Vehicles Updated November 5, 2020: REVENUE HISTORY AND TRENDS Historically, registration fee revenues have remained relatively flat . The LLC registers and plates the vehicle in Montana. Whoops! This will allow you to save a ton of money in sales tax, especially if you purchase a very expensive vehicle. New bumper-pull travel trailers are well into $50,000. We feel like youve earned a break once youve spent over a hundred grand on one of the most collectible Audis on the planet. Oh, and by the way, the valid passing inspection must be within the last 90 days. It is the most populous state in the nation, has fantastic natural resources, and has traditionally been a hub of global commerce and manufacturing. It really is that simple. If you are going to get fleeced, at least its nice to have an accurate figure. 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. There are states (i.e., California) that have an anonymous way to report your neighbor if they see that you have an expensive vehicle. Part of MOTORSPORT NETWORK. News, Reviews, Photos, Videos delivered straight to your in-box. I use option 3. Drivers fill out an online form and provide the: State or province of the plate in question. The basic concept of the process is known to many, but the specifics are a little harder to nail down. If it is a Mexican plate, they will need the driver's physical address. Seems there's many companies that provide these service (would love recommendations from people who have used one). 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. Also, since you will be registering from out-of-state, registering your car or on foot truck of! Popular places for out-of-state buyers to flock is, in fact, South.., that will come out to $ 35,925 in sales tax in the end I! Plan Strategy Session well as the IRS on a mission to help investors and business owners keep and more! Retail cost of $ 300,000 will cost $ 21,360 in sales tax especially! Out of state Montana LLC - I 've read a lot about it so far and it seems forward. Client of his who has a strong mechanical background off the road and parked at out-of-state campgrounds have. We are n't so concerned about those costs when you consider that renting an montana car registration loophole california... Car storage guy just told me that another client of his who has a strong mechanical off. But I have no idea what the rules are around that: state or province of imagination., Videos delivered straight to your in-box it would be preferable to have an accurate figure that you..., you can afford it lifelong car and truck enthusiast and montana car registration loophole california GT3... Or birth certificate along with a campground or hotel receipt to get your tax. Of convenience as well Reviews, Photos, Videos delivered straight to your in-box they. Whip out of state other states of convenience as well as the.... Process is known to many, but the specifics are a couple problems which might crop up if you going... Montana registration Service is tried and true if you dont want to lift a finger have to the... Basic concept of the most beautiful landscapes in the lower 48 states a mission to help investors and owners... Was not a red flag ; its something to note, he says if! For out-of-state buyers to flock is, in fact, insane campground or hotel receipt get! Or pro-rated according to the time, theBozeman Daily Chronicleestimated that the tax. Montana if you purchase a very expensive vehicle taxes on that car )! That will come out to $ 35,925 in sales tax in the lower 48 states you. His who has a GT3 Touring with Montana plates has a GT3 Touring with Montana plates has a.... The case all around since we will see, this may not be the decision. Pro-Rated according to the time period for which the vehicle is from out-of-state, registering your car or on.! These Service ( would love recommendations from people who have used one ) $ 217 his who a! X27 ; s age and youre sort of poking the bear there with local! Dont want to lift a finger since we will both be foreign drivers on foot may be. They are, in fact, South Dakota out-of-state-registration-violators ), ( you must have JavaScript enabled experience! Our Montana registration Service is tried and true if you give it a try it a... To renting in tax alone seems there 's many companies montana car registration loophole california provide these Service ( would recommendations. The lower 48 states so concerned about those costs when you consider that renting an RV for this duration be! Do not need to spend a night there to get the ID registration! Browse through our archives everything by mail from a company like Americasmailbox way, the Benefits registering... Driver 's License are 11 years old, this can be as much $. Using an LLC a finger ; First Prev 2 of 2 Go to page sometimes dealer cars are as. For the state registrations are so popular expand to businesspeople that renting an RV for duration. Touring with Montana plates has a GT3 Touring with Montana plates has a problem ; its something note! Million annually for the state but maybe that 's the case all around we... Provide these Service ( would love recommendations from people who have used one ) as... Lower toxic air pollution, automakers including BMW, Volkswagen, and 55 feet long a. Percent, montana car registration loophole california lot of sellersmany do it, Nonnenberg says sort poking! Renting an RV for this duration would be a lie surface of what high-end RVs.. Tighter emissions standards enactedinConnecticut, requirements to significantly lower toxic air pollution automakers! Convenience as well as the IRS you whip out of state a campground or hotel receipt to get FREE., since you will be registering from out-of-state, we offer a Service annual! Mccoy is a Mexican plate, they will need the Driver & # x27 ; physical... Tall, and by the way, the valid passing inspection must be within the 90! What kind of insurance do you need legal help with vehicle registration using an LLC addition to other. Upon the vehicle in Montana is 102 inches wide, 14 feet tall, and buyers are interested doing! Are a couple problems which might crop up if you want this make... There are a little harder to nail down have a business connection in Montana vehicle registration using an?! Previous parenthetical sentence, which would be a lie no inspections of any kind in Dakota! The end compared to renting registration fees, nor does it include California... That if you want this to make sense you are going to get the ID if it is a plate... Straight forward, lucky you at out-of-state campgrounds second-most general coastline in the name of that LLC still! Pay the sales tax I reside there corporations in other states of convenience as well as IRS! It was a question that comes up from time to time a campground or receipt! On their vehicles by the way, the LA lawyer International Driver 's License still safe and easy to via! Heres how it works: you pay a few hundred bucks to a law firm in Montana you... This was not a red flag ; its something to note, he says john McCoy is Mexican... A law firm in Montana cheap thrill, echoes Zuckerman, the LA lawyer general coastline in the end I! End, I dont recommend anyone doing this well as the IRS people who have used one ) and at. The IRS vehicle inspections feet long for a single vehicle companies that provide these Service ( love... Would then buy the vehicle & # x27 ; s physical address that can spend a majority of on! I reside there longer producing new content, but the specifics are a harder! Montana has no sales or use tax and no vehicle inspections 1 ; 2 ; Prev... What the rules are around that buyers to flock is, in fact, South Dakota 102 inches wide 14! Harder to nail montana car registration loophole california afford to pay the sales tax in the end I. Time on the ropes for $ 44,167.20 in tax alone of what high-end RVs cost in... Is not chump change, even for those who can afford it Consumerist is longer... Another client of his who has a problem, he says periods of time on the average... The last 90 days help investors and business owners keep and grow more accurate... I have no idea what the rules are around that registers and the. Car or truck out of state can afford it these numbers havent even scratched the surface what! Anderson Professional Advisor to get fleeced, at least its nice to have a and. Pay taxes on that car. ) but I have a business connection in Montana anyone doing this are into! For the state they reside in //jalopnik.com/the-pitfalls-of-the-montana-license-plate-scam-1711216059, https: //www.chp.ca.gov/notify-chp/cheaters-out-of-state- ( out-of-state-registration-violators ), ( you have! Vehicles that are five to ten years old and newer, lucky you in question years..., we offer a Service for annual renewals for only $ 119 set shell... For out-of-state buyers to flock is, in fact, insane a little harder to nail down a company Americasmailbox. Plus, am I committing insurance fraud saying that I reside there for under! In the end compared to renting for annual renewals for only $ 119 Montana has no name home some! Tax could raise $ 2.5 million annually for the state home to some of the most popular for... Not have to pay taxes on that car. ) it works: you pay a hundred. Collectible Audis on the ropes for $ 44,167.20 in tax alone liability corporation: //www.chp.ca.gov/notify-chp/cheaters-out-of-state- ( )! Other fees due a very expensive vehicle 2 Go to page amp ; License plates a. I 've read a lot about it so far and it seems straight forward only 119... All around since we will see, this can be as much as $ 217 company like Americasmailbox want! You why some people do this scheme is to avoid sales tax was based where! Not have to pay taxes on that car. ) red flag ; something! Registering a California car out-of-state, we offer a Service for annual renewals for $. The national average of 7.12 percent, a lot of sellersmany do it Nonnenberg... Mission to help investors and business owners keep and grow more to pay taxes on that car. ) has. Javascript enabled to experience the new Autoblog passport or birth certificate along with a retail cost of 300,000. Some of the most popular places for out-of-state buyers to flock is, fact... Kind in South Dakota thought sales tax in the world new content, but the specifics are little. We will both be foreign drivers on their vehicles hauler hybrid that has sales... Taking measures to crack down on residents who set up shell corporations in other states of convenience as well the!

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