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. 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. Go. We may earn a commission from links on this page. Oh, thats interesting, I thought. Or you could tell them anything other than the previous parenthetical sentence, which would be a lie. Its clear why people register vehicles in Montana. Your vehicles will be registered in Montana which has no sales tax. But withtighter emissions standards enactedinConnecticuton July 22, Colorado legislators slated next month to discussrequirements to significantly lower toxic air pollutionby 2027, and a handful ofautomakers including BMW, Volkswagen, and Fordrecently backing the USEnvironmental Protection Agencysdecision to restore California's ability to set its own strict tailpipe and zero-emission vehicle standards, debate is heating up over how far to go to avoid restrictions. "My car was stolen and the insurance company won't pay me." Our fast and easy app will get you there. 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. We aren't so concerned about those costs when you consider that renting an RV for this duration would be around 40k. Enjoy! None. Thats correct; no nagging smog checks. Its a riska cheap thrill, echoes Zuckerman, the LA lawyer. In a recent article, I quoted a new fifth-wheel trailer at around $109,000 MSRP.. If this alone were the determining factor, you still come out ahead titling and registering your car in South Dakota. After doing a bit of research, he found a loophole that permitted him to register his vehicle in Clay County while living in Mexico. I don't get it, want to live in CA, then obey the laws of CA. As noted, this maneuver is probably illegal in your state. 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. The maximum vehicle size in Montana is 102 inches wide, 14 feet tall, and 55 feet long for a single vehicle. I'm more concerned about being covered by my insurance and not committing a felony. Montana has no listed minimum tire tread depth. Why Is Everyone Registering Their Cars in Montana? 5 Star Registration includes all these fees in our service. Recreational vehicles, also known as RVs, can be quite expensive. Motorcycle safety fee: $16. Yes! neil e dale likes this. Thats the premise of companies that offer to help you incorporate in Montana, have your corporation own the vehicle, and pay no taxes. Thismeans that someone who spends $500,000 on a new Lamborghini need not pay an additional $36,000 or so in taxes toacquire. The scam works like this: You hire a Montana law firm to form a corporation or limited liability company (LLC) for you. Those days were the best. REVENUE HISTORY AND TRENDS Historically, registration fee revenues have remained relatively flat . Depending on where youre at, it might seem like you see a disproportionate amount of Montana license plates. As of August 2021,Big Horn, Deer Lodge, Flathead, Granite, Phillips, and Richland countieslackedthat local option tax. 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. In California, by contrast, owners must ensure that all vehicles made after 1975 meet emissions standards and can pass safetyinspections. No sales tax.. This is particularly important when buying a newer used vehicle. The LLC registers and plates the vehicle in Montana. John McCoy is a lifelong car and truck enthusiast and has a strong mechanical background off the road. 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. But hey - you saved thousands of dollars! Most states would like that information. This process earmarks the vehicle to an owner and is necessary to score a license plate needed to traverse public roads. License plate number. You may also have noticed quite a few South Dakota license plates, which is not a coincidence. As of October 2017, Consumerist is no longer producing new content, but feel free to browse through our archives. This will allow you to save a ton of money in sales tax, especially if you purchase a very expensive vehicle. The basic concept of the process is known to many, but the specifics are a little harder to nail down. If you cant afford the taxes to register your supercar in the state where you live, perhaps you cant afford the car, says Barry Ritholtz, a proud vintage Corvette and Defender owner and chairman of Ritholtz Wealth Management LLC. We'll make it happen for free. We are in the process of buying an RV to live in full-time for 6 months while road tripping. You can save a bundle of cash and ditch those smog checks, inspections, and possibly renewals. It would be preferable to have a business connection in Montana if you want this to make sense. The big question is this: is the Montana registration process limited to just cars? For somewhere around 1200$ there would be nothing to do from our side except fill out a form. 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. 3 min read. Still, many people are willing to risk taking advantage of this loophole in the law. 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. 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. Same as always. This includes transferring ownership from you to your LLC by filling out a bill of sale. Oh, and by the way, if your car happens to smoke, heaven help you from the Cali Karens: the CARB has a series of hotlines set up for people to narc you. You will need to understand and comply with use tax laws in the states where the vehicles are located. HELOC Taxes and What Does It Mean for Your Wallet? $60,000 and up: $192. There are three registration periods currently offered in Montana: 12-month, 24-month, and permanent. Otherwise move. Maybe to Montana? The Montana company bought the RV, not Thomas, the court said. Technology, performance and design delivered to your inbox. I'm an American citizen but have lived abroad the past 7 years. 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? You must have your bill of sale notarized. Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues. That question depends on a lot of variables. This is a phone call I get too often . All in all, the knowledge we've provided on how to register your car in Montana should give you peace of mind. (California State Police have started cracking down on theresidentialdiscrepancies ofdriverspulled over for other infractions with California licenses and out-of-state plates.) Its not a red flag; its something to note, he says. 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. There is no getting around this, and with the average age of a car on the road cruising for the past twelve years, you will for sure fail and have to have repairs done at some point. Heres how it works: you pay a few hundred bucks to a law firm in Montana to register a limited liability corporation. No compulsory annual safety inspections. Learn about new vehicle registrations. Also, this is only a flat fixed rate for the state and does not include whatever fees the county and local municipality will pile up on you. Theyll remotely handle the registration titling and fees. Companies help facilitate it. But what happens when you cross streams? The fine people of Montana drive and register all kinds of vehicles, all of which are sales tax-free to register. 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. 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. (Still need to check with progressive if they'll insure an LLC and foreign drivers but I've read they will) Any cons to this plan? 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. By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. I always feel better having my cars registered in California., Fisker will begin delivering its EV flagship SUV this year see the $37,500 Ocean, Tesla Cybertruck's adjustable suspension is like a Skyjack, Toyota rethinks long-term EV strategy, calls Tesla Y a 'work of art,' report says, Nissan recalling more than 700,000 Rogue and Rogue Sport models, Genesis recalls over 65,000 cars for potential exploding seat belt pretensioners, Stellantis idles Belvidere plant as last Jeep Cherokee rolls off the line. You would then buy the vehicle in the name of that LLC. Montana has no inspections and no emissions tests required for vehicle registrations. 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. This is not chump change, even for those who can afford it. Ouch. Ultimately,an$825luxury fee was added to ordinary registration costs for vehicles worth more than $150,000. All you need is a passport or birth certificate along with a campground or hotel receipt to get the ID. Along those lines, your first thought might be rich people taking advantage of Montanas complete lack of sales tax. Thats weird. But after seeing more of them, I said, I know whats going on 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. 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. RV Service: Registering a Converted School Bus Toy Hauler, Want to own Doug DeMuro's Audi RS2 but live in California? Youve got to have it. Its a $750 value, and youll walk away with a custom tax reduction plan designed specifically for you. In most states, an LLC created solely for the purpose of avoiding sales tax will be viewed as a sham, and the state will assess sales taxes on the LLC's owners personally. 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. A nominal fee of $800 looks appealing compared to shelling out twelve grand in tax, which is still very low. If you wanna live in California you should abide by the law. Our solution is an LLC. 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. Others acquirea mailbox address or property at whichthey can claim Montana residency. Want High Quality, Transparent, and Affordable Legal Services? 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. All rights reserved. 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). Our Montana Registration Service is tried and true if you dont want to lift a finger. Youve heard of Skoolies. A great and logical question. Asking for a friend. Terms Of Service. He resides on a small farm in Eastern Kansas where he (sometimes) enjoys fixing ancient farm equipment. Check your in-box to get started. My sister has a residence there and I actually have history with that address as it was my last official U.S. residence.
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