Montana LLC registration

[ttvetdoc]

I was at a car meet recently and noticed a Montana plate (here in NC). The car owner went over the Montana LLC registration 'technique'. I've subsequently looked into this a little bit but I was curious what others think about this (pros/cons)? I know there are some insurance companies that are okay with the registration state being different than the 'garaged' state.

Here in NC I would save on the initial sales tax (3%) and the recurring annual property tax bill.

Just looking for input.

 

[KAR120C]

I was at a car meet recently and noticed a Montana plate (here in NC). The car owner went over the Montana LLC registration 'technique'. I've subsequently looked into this a little bit but I was curious what others think about this (pros/cons)? I know there are some insurance companies that are okay with the registration state being different than the 'garaged' state.

Here in NC I would save on the initial sales tax (3%) and the recurring annual property tax bill.

Just looking for input.

It's easy to do. Montana has built a cottage industry doing this. Perfectly legal to do per Montana laws. May be a crime in your state. Do your homework on North Carolina laws, then make your choice based on your personal risk tolerance.

 

[Lowtush]

It's a cool loophole and definitely adds some panache to the car for those who are 'in the know' about it.

The savings don't seem as enticing for a 'cheap' exotic like a Lotus, but still cool.

Here's a nice description of the manner in which to do it.

 

[Ryder]

It's a cool loophole and definitely adds some panache to the car for those who are 'in the know' about it.

The savings don't seem as enticing for a 'cheap' exotic like a Lotus, but still cool.

Here's a nice description of the manner in which to do it.

True however, you can register multiple vehicles, RV's etc and the savings is substantial.

 

[Porter]

If you are registering a vehicle in a place where it isn't physically located in order to avoid taxation, you should be aware that it's a very clear form of tax fraud. And will likely lead to criminal liability if your local jurisdiction finds out about it.

 

[2BIG2FAIL]

Please note that some U.S. dealerships (e.g., Galpin) will not sell you the car under a Montana LLC out of state.

 

[SPoivre]

I looked into it. I didn’t see anything particularly worthy about it. Looked like tax fraud to me.

I’ll also say that when I see a car with Montana plates in CT, where I live, the first thought through my mind is, “ oh another jackass”.

 

[Porter]

Please note that some U.S. dealerships (e.g., Galpin) will not sell you the car under a Montana LLC out of state.

Yep. Makes them an accessory to a crime.

 

[Ryder]

Yep. Makes them an accessory to a crime.

You maybe 100% correct. I was under the impression that you, an individual, would no longer own the vehicle. Said motor vehicle would now be owned by a Montana LLC. that was incorporated by an attorney in that state. It is my understanding that you may be the CEO, Chairman of the Board , corresponding officer , etc. I have seen lots of promotions in print and online that seem convincing . I need to ask some car guy lawyer in my state their take. on this so called "loop hole". Thanks for the heads up!

 

[KAR120C]

You maybe 100% correct. I was under the impression that you, an individual, would no longer own the vehicle. Said motor vehicle would now be owned by a Montana LLC. that was incorporated by an attorney in that state. It is my understanding that you may be the CEO, Chairman of the Board , corresponding officer , etc. I have seen lots of promotions in print and online that seem convincing . I need to ask some car guy lawyer in my state their take. on this so called "loop hole". Thanks for the heads up!

The promotions are usually from one of the companies in Montana which facilitate the process. They are happy to do it since they break no Montana laws. You would be ok as long as the vehicle lives in Montana. As soon as the vehicle ‘visits’ your state of residence, you run afoul of your states tax laws.

Do a tiny bit of research and you’ll find all sorts of interesting info on how serious some states are on prosecuting the tax evasion. Ranges from cross checking Montana LLC registered vehicles using Ez Toll and Fast Passes to cruising car shows and recording the Montana plates. Then it’s simple legwork to prove your LLC exists solely to cheat on taxes.

If you are lucky, you’ll just have to pay the tax and and a penalty. It could also lead to a conviction on Tax Fraud.

Oh, and if you have an accident or traffic violation, that is usually enough for a state to do a quick investigation and get you.

As I said in my original reply, it all comes down to your risk tolerance. Is saving the tax worth life long consequences?

 

[Porter]

You maybe 100% correct. I was under the impression that you, an individual, would no longer own the vehicle. Said motor vehicle would now be owned by a Montana LLC. that was incorporated by an attorney in that state. It is my understanding that you may be the CEO, Chairman of the Board , corresponding officer , etc. I have seen lots of promotions in print and online that seem convincing . I need to ask some car guy lawyer in my state their take. on this so called "loop hole". Thanks for the heads up!

If you're in possession of the vehicle, and it's garaged or held in a physical location that has a personal property tax law, it doesn't matter what the paper says, it's your vehicle and you're garaging it in that jurisdiction. The paper doesn't change the material fact.

Think of it this way: if it was a building rather than a car, and the building was owned by an out-of-state entity, that doesn't mean the building isn't subject to real estate taxes where it's located. It just means the out-of-state entity should be paying them. With a car, it's a lot easier to track down the beneficial owner because they tend to be the one with the keys.

 

[Porter]

Oh, and if you have an accident or traffic violation, that is usually enough for a state to do a quick investigation and get you.

It's not only that! Despite the insurance company's willingness to write you a policy, many will then use the out-of-state registration tax dodge as a basis for denying any subsequent claim. So they get your premium money every month, but then never have to pay you a dime in the event that you have an accident or a theft. They just cancel you on the spot, leaving you completely screwed with a destroyed asset and no insurance payout. And the courts let them do it.

 

[SPoivre]

Now for my little rant.

I’m not sure what irks me more. Seeing some asshat in a $300k car with Montana plates or seeing my personal property tax bill for my five cars. It’s a close call.

 

[VL3X]

I see MT plates all the time at C&C events. It makes sense for $1m+ exotics who'd be paying $40k+ in taxes just to register their vehicle. I looked into it myself and it seems easy enough, but I didn't really want to drive around on MT plates, so I just paid the 4.25% to have my fancy black and white Delaware plate.

Another nice thing to consider about the MT loophole is no inspections.. ever.

 

[digilotus]

We paid around $80K AUD in taxes down under just to buy an Emira.

 

[inverselian]

Vehicles are registered in Montana, but insurance has them garaged at the duty location. Wouldn't recommend trying to claim income and writing off "business expenses".

Might check this as well

 

[Totally Average]

I was at a car meet recently and noticed a Montana plate (here in NC). The car owner went over the Montana LLC registration 'technique'. I've subsequently looked into this a little bit but I was curious what others think about this (pros/cons)? I know there are some insurance companies that are okay with the registration state being different than the 'garaged' state.

Here in NC I would save on the initial sales tax (3%) and the recurring annual property tax bill.

Just looking for input.

To save 3%? Not worth it.

 

[squish]

If you are a California resident you must register any car you bring into the state within 20 days, and they encourage people to report cars with out of state plates that appear to be in violation:

California Highway Patrol Registration Enforcement and Guidance (CHP REG) Program

www.chp.ca.gov

If you have a home in California but claim residency in another state, I doubt they could do anything. But for CA residents they could hit you with some ridiculous fines and impound the car even if they don't pursue you for tax fraud.

 

[RoryBellows]

CA sucks. I just paid over 700 bucks for a 2022 Model 3 registration. I have no clue how they even assess the fees anymore. The day after I retire I'm moving out of state.

 

[cyanmauve]

I don’t get angry at someone who wants to test the law, as long as they don’t crow about it when a court finds them guilty.

Figure out a way to save tax money legally as the law is written? Cool! Don’t blame the guy that figured it out, blame the people that wrote the tax law. Doing something in the grey zone that, if caught, has a good chance of getting you in hot water? Ok, don’t get angry if you got burned. You knew the risk.