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. This process earmarks the vehicle to an owner. Heres how it works: you pay a few hundred bucks to a law firm in Montana to register a limited liability corporation. 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. For what its worth. One of the hottest states for those looking to sneak around regulations and extra expenses is South Dakota. First, you'll need to pay a vehicle registration fee. Surely there couldn't be that many people from the Mount Rushmore State on vacation at the same time, right? I use South Dakota through Americas Mailbox. Want High Quality, Transparent, and Affordable Legal Services? I don't get it, want to live in CA, then obey the laws of CA. Penalties for Vehicles Registered in California Most state laws require you to register your car and obtain insurance in the state where it is driven most. REVENUE HISTORY AND TRENDS Historically, registration fee revenues have remained relatively flat . The current rates for registration in Montana are: Vehicles less than four model years: $217. Can be from a hotel or campground. Once the vehicle is permanently registered, it is covered for life, with no more registration renewals. If you are interested in seeing all of the ways that you are getting fleeced in this one-sided transaction, feel free to read through the complete breakdown of the DMV calculator. 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. 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. According to the California DMV: If your vehicle is less than 4 model years old, you can pay a smog abatement fee instead of getting a smog inspection for the first 8 years that your vehicle is registered. Many see it as asmart move. Check out some of our greatest hits below, explore the categories listed on the left-hand side of the page, or head to CR.org for ratings, reviews, and consumer news. Then there are the tax issues. Our solution is an LLC. I went to car week in Montery in my 458 with Montana plates and had several CHP behind me as we were in a rally from LA to car week and no issues. We are your Anytown experts! The process is that you simply must own an LLC in Montana which provides proof of residence for the vehicle. 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. 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. (Ritholtz also hosts the Masters in Businessshow on Bloomberg Radio. The same logic applies to registration in other states of convenience as well. In 2021, fully 10% of all McLaren P1s ever madecars worth well over $1 million apiecewere registered in Montana,accordingto the Montana DMV. Vehicles 5 to 10 years old: $87. Yeah that's lame. All rights reserved. The answer, in most cases, is yes. 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. Technically, the practice is legal. Would have to immediately on arrival apply for a NC State ID which takes 20 days. This was not a trailer over the top by any stretch of the imagination, either. We may earn a commission from links on this page. HELOC Taxes and What Does It Mean for Your Wallet? No compulsory annual safety inspections. Tax Attorneys, CPAs & EAs who specialize in working with businesses and investors. Go. 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? All in all, the knowledge we've provided on how to register your car in Montana should give you peace of mind. For vehicles that are eight years old and newer, lucky you! Send us a note: tips@thedrive.com. But it does not end there. Vehicle Services: Title, Registration, & License Plates. Taxes will still run you in the ballpark of $1,200 plus fees, whereas the 4% tax in South Dakota will only be about $480. Typically, they register in a Montana county that doesn't have a local-option tax. We'll make it happen for free. Of course not! This is because, with less than half the population of the borough of Queens, N.Y., it has no populated areasfederally classified as having non-attainment status tomeetthe Clean Air Act'sregulations. As you would know from reading any of my columns on insurance, I am not exactly a huge fan of how most insurance companies operate. What was once a blue-collar state that made its mark on the world by producing things then transitioned to the mecca of technological development. We feel like youve earned a break once youve spent over a hundred grand on one of the most collectible Audis on the planet. For somewhere around 1200$ there would be nothing to do from our side except fill out a form. This is a phone call I get too often . Include the bill of sale as well. Some states are willing to use extreme measures to secure tax revenue on pricey vehicles that their residents purchase out of state. 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. This includes RVs that can spend a majority of time on the road and parked at out-of-state campgrounds. Same as always. You generally cant go wrong by doing that. Where 10 years agothe sight of a Ford GT sporting a blue Montana plate would be rare, adriveto the popular Friday morning car gatherings at Newcombs Ranch outsideLA reveals that even relativelypedestrian 911s carryMontana plates. Since it has an entirely legitimate South Dakota title, you are not beholden to Californias asinine rulings regarding having a valid smog check at the time of sale. What if you could avoid that, and avoid annual car inspections, just by filling out a little bit of paperwork? $60,000 and up: $192. Prue Leith Used to Deliver Food in a BMW Isetta Microcar, Chase Elliott Explains the Challenge of Adapting to NASCAR's Next Gen Car, Is a Ram 1500 TRX the Ideal Winter Vehicle? Second, Montana does not require vehicle emissions tests or annual inspections. Contact the MDT Motor Carrier Services Division at 406-444-6130 for interstate licensing and registration questions. So you can go ahead and roll another $30-$60 into your registration and operating costs. Montana has long been a bastion of tax freedom for many years, so it was one of the original havens for supercars. There is an actual departure leaving the Golden State; even the media outlets in California conclude that this is real. administrator. Thats weird. But after seeing more of them, I said, I know whats going on here. 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. (California State Police have started cracking down on theresidentialdiscrepancies ofdriverspulled over for other infractions with California licenses and out-of-state plates.) 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. 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. And as a bonus, you evade smog[regulations].. You can find a specific cost they intend to coerce from you by plugging in your location information at the California DMV website. Lets find out! The overall cost of living in LA is 41.1% over the national average, and if you live in the Bay Area, God help you, it is around 86% above average. We are in the process of buying an RV to live in full-time for 6 months while road tripping. 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? 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. 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. First, it does not charge sales tax on personal property. Second, your insurance company will probably not be thrilled with your registration scheme, which will cause problems when you get in an accident, and the insurance company denies your claim when they notice that the car is registered to a Montana LLC. The LLC registers and plates the vehicle in Montana. But then, after that, it will hurt a lot. Getting an out-of-state title and registration package from Dirt Legal is your iron-clad hedge of defense against this lunacy. Walk into a DMV in California to register your new $1.5-million McLaren P1, and you'll pay something like $120,000 for a license plate. Pay (All) Fees. Chain of ownership document (original copies). Or you could tell them anything other than the previous parenthetical sentence, which would be a lie. As noted, this maneuver is probably illegal in your state. Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues. If this alone were the determining factor, you still come out ahead titling and registering your car in South Dakota. Local taxes and fees now total $4453. Sorry, I dont know the insurance company nameI was sort of interested in the conversationbut I owned my 5th wheel outright. Some states are taking measures to crack down on residents who set up shell corporations in other states, including suing for tax evasion. Do you need legal help with vehicle registration using an LLC? All told, light vehicle registrations contributeroughly 4% of total revenue collections for the state, according to the primer. Now lets have a look at South Dakota. ), I like paved roads and functional infrastructure, tweeted Ritholz. But regardless of which part of the state you may reside in, there is another option to save money on registration and kick the smog check to the curb. First, Montana has long been known for its lax approach to driving laws, most memorably the brief period where the interstate had no speed limit. Yes, I know, you are going to argue that you dont own the car - the LLC does. Although, of course, they benefit from it in more staggering monetary amounts. Yes. There are states (i.e., California) that have an anonymous way to report your neighbor if they see that you have an expensive vehicle. We've got the cure. Why? So we are both non-residents. 3 min read. The practice of registering a collectible car there, regardless of where itislocated in reality, is done in orderto avoid paying taxes and shirkemissions standards. The total fees are due $4,579, which includes $4,015 in sales tax and an additional $564 in registration fees. The Montana LLC comes with real business responsibilities. Technology, performance and design delivered to your inbox. Its diamond blue metallic painta hue so subtle that at some angles, it looked lavenderand throaty 3.3-liter flat-six engine were enough to bring $141,000 and more than 120 comments on its listing. I can't figure out if that is needed before the registration can happen or if it's when you want to get your SD driver's license eventually. We'll make it happen for free, How to Insure a Vehicle Owned by a Montana LLC. In addition, the smog check requirements linger; even if you live in remote and rural Northern California with practically no population density, you are still liable for all of the exact draconian smog check requirements. And while this represents financial success for South Dakota, one can't help but wonder how much money other states are losing. Your vehicles will be registered in Montana which has no sales tax. 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. You'll simply need to produce the certificate of origin from the manufacturer. All we need is a title, Manufacturers Certificate of Origin, or bill of sale (if you are financing your car) to process your request. 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. i know all about tax savings with certain options. It is covered for life, with no more registration renewals around regulations and extra expenses South. What does it Mean for your Wallet Division at 406-444-6130 for interstate and... A majority of time on the planet: vehicles less than four model:. 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