We get it — between licensing and registration fees, annual inspections, and sales tax, buying and maintaining a car can be quite a hassle and a significant strain on your bank account.
Depending on where you live, the sum of these pesky vehicle fees can equate to the price of a whole person’s annual income. And with the increasing rate of inflation, these fees will only become more expensive. But what if there was a way you could pay no sales tax on your car, RV, or motorhome, forgo annual inspection costs and cut down on those pesky fees …
And all at once?
Fortunately, a lot of car owners are doing exactly this by obtaining a Montana car registration — even if they don’t live in-state. Many exotic car owners have been using this tactic for years. When you see a luxury vehicle on the highway, you assume it belongs to a wealthier owner.
This assumption comes from not just the knowledge of the price of the car, but the additional fees and taxes that come with such multi-million dollar purchases. So it should come as no surprise that car owners would want to avoid making all those extra payments.
But how can that be that legal? Why Montana? And how do I register my car in Montana if I live out-of-state? We’re sure you have a lot of questions, so here’s everything you need to know about registering your out-of-state vehicle in Montana.
The Montana Government’s Stance On Out-of-State Car Registration
First, let’s understand the legality of Montana car registration.
According to both federal and state governments, “It’s illegal to intentionally alter, falsify, or forge the registration on your vehicle, pink slips, or license plates.” Also dubbed “the wobbler offense,” falsifying your address of residency is completely illegal; this misdemeanor could result in fines of up to $10,000, and potentially prison.
However, it’s perfectly legal to open a Montana-based limited liability company (LLC), purchase your new vehicle through that LLC, obtain a Montana car registration, and operate your car in a different state. Of course, there is more to it than just that, and most car owners consult with a professional attorney before taking any such action.
How Car Owners Are Registering Their Cars In Montana
As stated above, the first step to legally obtaining a Montana license plate is by opening an LLC, or in this case, a shell company. A shell company is a legally established business that possesses no significant assets or operating business actions.
While shell companies themselves are not illegal, they can be used for illegal purposes, such as the concealment of illicit business activities or the owners of a business from law enforcement. A legal shell company should exist to protect the assets of the corporation’s owner — like a newly purchased vehicle.
Outside of out-of-state car registration, there are legitimate reasons why people set up shell companies. It can help an individual avoid paying high taxes, gain greater access to foreign markets, and protect the owners’ identity.
To set up a shell company, you must select a name for the company and then resister the company in the state of your choosing, which in this case, would be Montana.
This brings us to the next question: why choose Montana to register your vehicle?
The Biggest Benefit of Registering Your Car In Montana
It’s no secret that major cities like Los Angeles, Seattle, Chicago, and New York City have extremely high sales tax rates. If you own a luxury car, this tax can drastically increase the total price of a vehicle.
For example, let’s assume you just relocated to the hustling and bustling city of Seattle, Washington, whose current sales tax rate is a whopping 10.25%. You decide its time to treat yourself to a new ride and purchase a souped-up Ferrari LaFerrari Aperta for its retail price of $2.2 million.
That means you’d have to pay a colossal sales tax fee of $225,500, resulting in a total cost of $2,425,500. Now, we know that’s an extreme example, but it goes to show just how much of a burden sales tax can inflict on your total purchase.
It’s understandable that a car owner would want to avoid this extra fee as much as possible, which leads us to the biggest benefit of registering your car in Montana: there’s no sales tax.
Montana is one of five states that does not impose a general sales tax, which makes it a tax haven for home and car owners. Instead, the state draws its funding from wealthy property owners and energy producers — which, luckily, shouldn’t affect you if you live out of state.
This tax-free advantage makes Montana what the Washington Post calls the “best state” to register your vehicle for this reason. Using the Ferrari LaFerrari Aperta example above, this means someone can purchase their luxury supercar and not have to pay a single penny in sales tax.
Of course, this advantage has drawn some negative attention from both Montana lawmakers and Montana residents. In 2017, Montana legislation attempted to pass a proposed tax bill, which would specifically target out-of-state car owners. The bill states that owners of luxury cars valued at over $150,000 would have to pay 0.08% to 1% in sales tax.
Fortunately, this bill faced a lot of backlash from car and RV dealerships, and a committee of Montana legislators decided to forgo the proposition. As of today, there is still no legitimate law that says car owners cannot purchase their car out-of-state and register it under their shell company in Montana.
Affordably License and Register Your Car
In addition to being a tax haven, Montana has several additional benefits that prove to be advantageous for out-of-state car owners. Perhaps one of the biggest dreads of buying a car is all the extra licensing and registration fees one must pay.
Being a car owner today is more complicated than just preaching a car and driving it around town. Car owners must pay what’s called “tag, title, and tax” fees upon buying a vehicle.
Depending on where you live, these fees can range anywhere from $30 to $300; and while that might not be considered expensive for some, it becomes just another statement you don’t want to pay. However, Montana generously offers car owners affordable options for licensing and registration.
To view these options, you can visit Montana’s vehicle title and registration page. The state does offer a one-time flat-rate fee for car owners, but only if the vehicle is over 11 years old. For owners of newer vehicles, the renewal and registration options are varied, but you can typically expect to pay a significantly lower rate when compared to other states.
Say Goodbye to Pesky Inspection Fees …
While we’re on the subject of burdensome fees, it’s worth mentioning that Montana does not enforce an annual car inspection and emissions testing. The 1990 Clean Air Act introduced an effort to control air pollution in the United States and enforced auto emission standards to promote a “clean air” policy.
However, Montana was relieved of this act. According to the Emissions Organization, “Montana does not have any vehicle emissions test requirements at this time because the state does not have any populated areas that the federal government classifies as ‘non-attainment’ status for meeting the Clean Air Act’s air quality regulations.”
Especially for luxury car owners, inspection fees can be quite pricey, totaling up to $300 or more — and that doesn’t even begin to cover all inspections. Plus, most states require that this testing be conducted annually, which means you must include that extra cost when searching for a car to purchase.
Registering your car in Montana and being rid of this requirement essentially means that car owners don’t have to worry about paying extra auto emissions testing fees — a financial blessing for your vehicle.
Register Your Next Car In Montana — Today!
While registering your car in Montana offers its fair share of benefits, there are a few legal hoops you must jump through. We’re sure you have additional questions on how to register your car in Montana. The best piece of advice we can offer is to consult with an experienced lawyer before taking any steps.
Your lawyer should walk you through the process of setting up your LLC, or shell company, in Montana. Then, you can go about legally purchasing your car, RV, or motorhome, obtaining a Montana license plate, and registering it under your shell company.
The process isn’t overly complicated, but it’s wise to have the protection of a legal professional helping you out. Avoid any “fast-acting web agents,” as these claims will throw suspicion on your purchase and could land in legal trouble. Insurance companies will be more likely to refuse claims if they can prove that your car was purchased under shady circumstances.
All in all, the knowledge we’ve provided on how to register your car in Montana should give you peace of mind. 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.
Need your Montana License Plate or Montana LLC contact us today
