Montana / Out-of-state reg
12-26-2022, 01:57 AM
#1
Montana / Out-of-state reg
Any of you guys have any experience with the Montana LLC/plates? Not trying to drive on them in CA.
If I recall, CA won't charge sales tax as long as car was out of state > 1y prior to purchase. Was thinking about buying it on a Montana LLC and keeping it out of state for a year before bringing it back to register.
If I recall, CA won't charge sales tax as long as car was out of state > 1y prior to purchase. Was thinking about buying it on a Montana LLC and keeping it out of state for a year before bringing it back to register.
12-28-2022, 02:04 PM
#2
IIRC sales tax would apply once the out of state entity transfers the vehicle to the in state entity, your LLC to yourself. Of course, it's based on the selling price, if there is one, as there would be no sales tax applied to a gift for instance. Depending on the size of the gift, it may need to be reported the IRS.
From my understanding, CA is starting to pay attention to this with Oregon and Montana. I know your intention is to keep it in Montana, but many enthusiasts register cars there when they're really here and do so for tax and emissions benefits.
Best bet is to consult with a place that does DMV services, alot of notary places do those services now I'm sure you can find one close by, they handle out of state transfers and such, much easier to deal with than actually going to the DMV, but they typically charge $20-$80 to do work.
From my understanding, CA is starting to pay attention to this with Oregon and Montana. I know your intention is to keep it in Montana, but many enthusiasts register cars there when they're really here and do so for tax and emissions benefits.
Best bet is to consult with a place that does DMV services, alot of notary places do those services now I'm sure you can find one close by, they handle out of state transfers and such, much easier to deal with than actually going to the DMV, but they typically charge $20-$80 to do work.
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mosesbotbol (01-03-2023)
12-29-2022, 11:01 PM
#3
IIRC sales tax would apply once the out of state entity transfers the vehicle to the in state entity, your LLC to yourself. Of course, it's based on the selling price, if there is one, as there would be no sales tax applied to a gift for instance. Depending on the size of the gift, it may need to be reported the IRS.
From my understanding, CA is starting to pay attention to this with Oregon and Montana. I know your intention is to keep it in Montana, but many enthusiasts register cars there when they're really here and do so for tax and emissions benefits.
Best bet is to consult with a place that does DMV services, alot of notary places do those services now I'm sure you can find one close by, they handle out of state transfers and such, much easier to deal with than actually going to the DMV, but they typically charge $20-$80 to do work.
From my understanding, CA is starting to pay attention to this with Oregon and Montana. I know your intention is to keep it in Montana, but many enthusiasts register cars there when they're really here and do so for tax and emissions benefits.
Best bet is to consult with a place that does DMV services, alot of notary places do those services now I'm sure you can find one close by, they handle out of state transfers and such, much easier to deal with than actually going to the DMV, but they typically charge $20-$80 to do work.
I was under the impression that transfer from single member LLC to myself would just be a transfer of title and not a gift...similar to income on single member LLCs being just treated as a pass through/disregarded entity. Hopefully should not trigger a tax/sale situation but sounds like something I need to look into.
Last edited by ThreeD; 12-29-2022 at 11:05 PM.
12-30-2022, 07:15 AM
#4
Interesting idea (and fun math exercise).
In the Montana scheme the car is owned, titled, and licensed to a Montana corporation (LLC) -- it can be driven and garaged anywhere and by anyone. As far as I can tell it never needs to even enter the state of Montana. The LLC is "resident" in Montana. I think the S2000 gets a permanent (non expiring?) plate 'cuz every one of them is over 11 years old. There seen to be several minor annual expenses involved but companies in MT specifically set up to handle them.
How does this compare to CA sales/use tax? For a $500,00 exotic it makes sense and maybe for a $30,000 S2000? At 7.5% a $30,000 S2000 has a $2200 California sales tax.
One website I glanced at had this information:
$300 for a Montana LLC
$500 for us to get the plates, registration and title,
$90-$220 (annually)to the Flathead DMV,
$20 annually to the State of Montana for the LLC, and
$49 a year for us to be your registered agent and for you to use our address.
________________________
$1000ish up front. Plus that $159 to $289 annual expense that's probably offset by CA annual registration.
But like most things that seen too good to be true there's gotta be a catch here or half the cars in the US would be titled and licensed to a Montana LLC.
-- Chuck
In the Montana scheme the car is owned, titled, and licensed to a Montana corporation (LLC) -- it can be driven and garaged anywhere and by anyone. As far as I can tell it never needs to even enter the state of Montana. The LLC is "resident" in Montana. I think the S2000 gets a permanent (non expiring?) plate 'cuz every one of them is over 11 years old. There seen to be several minor annual expenses involved but companies in MT specifically set up to handle them.
How does this compare to CA sales/use tax? For a $500,00 exotic it makes sense and maybe for a $30,000 S2000? At 7.5% a $30,000 S2000 has a $2200 California sales tax.
One website I glanced at had this information:
$300 for a Montana LLC
$500 for us to get the plates, registration and title,
$90-$220 (annually)to the Flathead DMV,
$20 annually to the State of Montana for the LLC, and
$49 a year for us to be your registered agent and for you to use our address.
________________________
$1000ish up front. Plus that $159 to $289 annual expense that's probably offset by CA annual registration.
But like most things that seen too good to be true there's gotta be a catch here or half the cars in the US would be titled and licensed to a Montana LLC.
-- Chuck
12-30-2022, 08:43 AM
#5
Any of you guys have any experience with the Montana LLC/plates? Not trying to drive on them in CA.
If I recall, CA won't charge sales tax as long as car was out of state > 1y prior to purchase. Was thinking about buying it on a Montana LLC and keeping it out of state for a year before bringing it back to register.
If I recall, CA won't charge sales tax as long as car was out of state > 1y prior to purchase. Was thinking about buying it on a Montana LLC and keeping it out of state for a year before bringing it back to register.
01-01-2023, 10:13 PM
#6
Interesting idea (and fun math exercise).
In the Montana scheme the car is owned, titled, and licensed to a Montana corporation (LLC) -- it can be driven and garaged anywhere and by anyone. As far as I can tell it never needs to even enter the state of Montana. The LLC is "resident" in Montana. I think the S2000 gets a permanent (non expiring?) plate 'cuz every one of them is over 11 years old. There seen to be several minor annual expenses involved but companies in MT specifically set up to handle them.
How does this compare to CA sales/use tax? For a $500,00 exotic it makes sense and maybe for a $30,000 S2000? At 7.5% a $30,000 S2000 has a $2200 California sales tax.
One website I glanced at had this information:
$300 for a Montana LLC
$500 for us to get the plates, registration and title,
$90-$220 (annually)to the Flathead DMV,
$20 annually to the State of Montana for the LLC, and
$49 a year for us to be your registered agent and for you to use our address.
________________________
$1000ish up front. Plus that $159 to $289 annual expense that's probably offset by CA annual registration.
But like most things that seen too good to be true there's gotta be a catch here or half the cars in the US would be titled and licensed to a Montana LLC.
-- Chuck
In the Montana scheme the car is owned, titled, and licensed to a Montana corporation (LLC) -- it can be driven and garaged anywhere and by anyone. As far as I can tell it never needs to even enter the state of Montana. The LLC is "resident" in Montana. I think the S2000 gets a permanent (non expiring?) plate 'cuz every one of them is over 11 years old. There seen to be several minor annual expenses involved but companies in MT specifically set up to handle them.
How does this compare to CA sales/use tax? For a $500,00 exotic it makes sense and maybe for a $30,000 S2000? At 7.5% a $30,000 S2000 has a $2200 California sales tax.
One website I glanced at had this information:
$300 for a Montana LLC
$500 for us to get the plates, registration and title,
$90-$220 (annually)to the Flathead DMV,
$20 annually to the State of Montana for the LLC, and
$49 a year for us to be your registered agent and for you to use our address.
________________________
$1000ish up front. Plus that $159 to $289 annual expense that's probably offset by CA annual registration.
But like most things that seen too good to be true there's gotta be a catch here or half the cars in the US would be titled and licensed to a Montana LLC.
-- Chuck
The way I think it'll work - after the year mark, transfer it to my name, and then bring it back to CA and register in CA for road use there. At that point, I'll still pay registration for CA, but I won't have to pay the use (sales) tax on it.
Have since looked on Rennlist and it seems like it works.
Thinking about this for a 991.2 GT3, ~$180-200k would be $16-18k in sales tax (use tax is state + city/county which is ~9.5%) offset by the $3-5k in Montana LLC registration/fees/etc + transport fees, overall savings of ~$10-13k.
Downside: I probably have to tie the cash up in the car at least for a year until car is in my name, since it's hard to get a regular loan to the Montana LLC. So what is that tied up cash worth...plus the inconvenience of not having the car locally for a year.
Upside: $10-13k not given to the mismanaged CA system
Last edited by ThreeD; 01-01-2023 at 10:40 PM.
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mosesbotbol (01-03-2023)
01-02-2023, 10:18 AM
#7
It may be different for non-residents, but a layperson can set up a MT LLC in well under an hour on the state's website. I thought it was $100. Incredibly cheap and easy in this state either way. Annual registration fees here are high for the first 5 years on a new vehicle ($600-ish trickling down to $300), and permanent plates are optional for 11 yr old and older vehicles (~ $200 to register for life). Insurance is cheap if you can avoid the hail zip codes. Fuel quality is poor statewide. No E85. No inspections or emissions testing.
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mosesbotbol (01-03-2023)
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01-03-2023, 05:06 AM
#8
I know someone who has about 15-20 cars in NH that are all registered to Montana. They are classic or seldom driven cars. His "daily drivers" are registered in NH.
01-04-2023, 11:21 AM
#9
you see a lot of exotics and people who flip cars use the Montana LLC approach. A $53k corvette costs $595 to register in montana including all taxes an fees..... here in TN that car would cost $4,500 ish with registration and our high sales tax..... downside..... need corporate insurance.... i kind of doubt a regular policy would cover a car that was in an LLC name if somerthing were to happen to the car..... so you pay a little more for the insurance but still worth the savings......
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mosesbotbol (01-05-2023)
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