“My only assumption would be that they found other counties where they have lower taxes.”. /r/Cars is the largest automotive enthusiast community on the Internet. Laura Blackman, Motor Vehicle Supervisor for Gallatin Valley, explains how a loophole in Montana law allows out-of-state residents to avoid paying sales taxes by registering their vehicles in Montana. And nonresidents can get permanent plates for their “classic” collector cars, which might sell for tens or hundreds of thousands of dollars, for about $150, in part because the county’s local tax bottoms out at $2.50 after a vehicle hits 18 years old, she said. Managing a Montana LLC As Dianne drove through Washington State, she didn’t realize she was in a speed zone. Your vehicles will be registered in Montana which has no sales tax. If there is a lien on the vehicle, it must be released prior to sale in one of two ways:. Note: We've recently updated our online systems. Low 23F. This website may supply general information about the law but it is for informational purposes only. 2.2m members in the cars community. title 35. corporations, partnerships, and associations chapter 8. montana limited liability company act In fiscal year 2016, $5.7 million was collected in Gallatin County. As noted, this maneuver is probably illegal in your state. “It started off as motorhomes and now there are other vehicles in the mix.”. Does this harm Montana? An LLC is not a corporation nor is it a business. You might never get in an accident. Objectivism: A Philosophy for Life on Earth “But that’s not even the best part. The number of vehicles bearing Montana plates out of state is unknown but estimated in the thousands. It might not hurt Montana, but other states don’t like it and have taken action. We take the time to get to know your goals and provide strategically tailored advice to create a strategy unique to you. To see what else is happening in Gallatin County subscribe to the online paper. To start an LLC in Montana you will need to file the Articles of Organization with the Montana Secretary of State, which costs $70.You can apply online. Montana.gov. And her staff are strict in requiring the registrant to have “an interest in real property” in the county — but that could be something as small as a storage unit, boat slip, vacation home or an attorney’s office address. The same page reads: “It would massively disrupt the entire way corporations and LLCs work to not allow LLCs to be formed for the sole purpose of owning something and avoiding taxes.”. The scam works like this: You hire a Montana law firm to form a corporation or limited liability company (LLC) for you. We believe in keeping costs low and fees to a minimum. Like, in the police report. Montana’s LLC law dates back to 1991. A Montana LLC is considered a Montana resident and, like any other resident of Montana, won't pay a sales tax on any purchase. In Gallatin County, DMV supervisor Laura Blackman said there’s been a decrease in the number of LLC registrations but an increase in high-end sports car and collector car registrations. Two LLCs registrations later, we were talking to the secretary of a Whitefish law firm whose address was on file for an entity named RIME 55 Holdings. Email notifications are only sent once a day, and only if there are new matching items. The LLC registers and plates the vehicle in Montana. How pathetic do you have to be to pull something like this ? Cloudy skies. You don't buy the motor home, your LLC does. "My car was stolen and the insurance company won't pay me." Typically, they register in a Montana county that doesn't have a local-option tax. Online business name searches reveal the name of the LLC, the registered agent and office, and the principal business address. He wrote The Lemon Law Bible and Chrysler’s Turbine Car: The Rise and Fall of Detroit’s Coolest Creation. Forming an LLC does not create a business nor does it create a corporation. If you can't login please try resetting your password. If you didn’t know about it, then here is what it basically is, you set up an LLC in Montana, and register cars there through that, and pay no sales tax on the cars, RVs, Planes, whatever else. A Montana LLC is pretty anonymous to start with. Six of Montana's 56 counties do not collect a local option vehicle tax: Big Horn, Deer Lodge, Flathead, Granite, Phillips and Richland. Send a photo to this reporter at tcarter@dailychronicle.com. they can rightfully deny a claim in most states if it is shown that the underlying policy was obtained through fraud, even if the underlying fraud has nothing to do with your claim. “Say its a Maserati, if it were brand new in Gallatin County, you’re talking like $3,000. The secretary said they just receive the mail — a courier picks it up. LLCTLC can help you start an LLC in Montana, New Mexico, Wyoming, or Delaware, depending on your goals and needs. As I have noted in the past, the solution is to get the law changed. But the state of Georgia feels that this is … 1.4k votes, 761 comments. Please log in, or sign up for a new account to continue reading. Send us your thoughts and feedback as a letter to the editor. You have a choice: Tell the insurance company the truth (“I live in Michigan, drive the vehicle almost exclusively in Michigan, store it and park it in Michigan, but have Montana plates on it in the name of a sham LLC.”) If you tell them the truth, will they insure the car? Why? Introductory offer for new subscribers only. That’s it. We serve as … Not break the law because you don’t agree with it. For a modest fee, several Montana “registered agent” companies, which are listed on the secretary of state’s website, will use that law, helping out-of-staters in legal tax evasion. We hope that you continue to enjoy our free content. The Montana Vessel Bill of Sale is a legal document that will prove the legal sale and purchase of vessel/boat in the state of Montana.This document will also prove change of ownership. I get asked from time to time about the so-called Montana License Plate Scam: Can you safely register your vehicle in Montana and drive it in your non-Montana home state? 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. At Montana Registered Agent LLC, we provide Montana … In 2014, lawmakers there gave state officials a law that they could use to go after RV owners with Montana tags by giving them 30 days to register in Nebraska or pay a fine up to 50 percent of the unpaid taxes. 13.1k members in the Objectivism community. See our list of vendors and newspaper racks. “At the Office of the Secretary of State, we are tasked with following the law, not making the laws,” said Secretary of State Corey Stapleton in a statement. We actually formed a Montana LLC, but in reality, most states (including ours) have increased their scrutiny of out-of-state plates and know all about Montana LLC's as a vehicle to avoid certain DMV/registration and property taxes. Here’s where I’d be worried even if I thought I could dodge the IRS. Instead, it was bought by a Montana company, one formed for the sole purpose of buying the RV. Montana’s LLC law dates back to 1991. You own the LLC outright. That’s not the point. If, however, you establish a Montana LLC for the "sole purpose" of avoiding sales taxes (which is what the Montana lawyers and companies say you can do), the Delaware corporation comparison fails. Winds SSW at 5 to 10 mph. The term “shell corporations” is applicable here. You own the LLC outright. Election Results; File Your Tax Return or Where's my Refund; Free Tax Assistance at MontanaFreeFile.org; File Upload for W-2s, 1099s & MW-3s; Montana … League of Womens Voters 2020 Voting Guide, Out-of-state car buyers use Montana LLC's to evade taxes, lawmakers there gave state officials a law, Increasing number of Montana license plates reported on cars in California, Bozeman man arrested for meth possession, intent to sell at Three Forks motel, Forest Service considering heli-skiing operation in the Centennial Mountains, Loan, grant programs for Bozeman small businesses open Wednesday, Gallatin City-County Board of Health votes to continue suit against Rocking R Bar, Montana student lobbyists tracking budget, concealed carry and other key issues at the Legislature, Despite pandemic, city of Bozeman reports stable finances, Montana State's Bounty of the Bridgers sees expanded food insecurity due to pandemic, Gallatin City-County Health Board to review COVID-19 rules, Pop-up sculpture exhibit delights visitors at Story Mill Community Park, Man dies after crashing truck in Law and Justice Center, Wind downs power lines in Bozeman; outages reported in Livingston, Manhattan, Bozeman police monitoring government buildings for suspicious activity amid political tension. There are a couple problems which might crop up if you give it a try. Gallatin County collects a 0.5 percent local option vehicle tax that is distributed to the county and incorporated municipalities in it. Or you could tell them anything other than the previous parenthetical sentence, which would be a lie. … And the advantage that the aforementioned Whitefish company has is that it registers the vehicle in Flathead County, one of six counties in Montana that has no local-option vehicle tax. Single Member Limited Liability Company (SMLLC) An SMLLC is treated as a disregarded entity, whether formed in Montana or in another state or country. Troy Carter covers politics and county government for the Chronicle. The Montana license plate scam is back in the news. Do you plan on insuring your vehicle? But it wasn’t technically Thomas who made the purchase — a fact a court would later agree with. I have my motorcoach in a Montana LLC and this is the second one,I have saved about 10K per year in property taxes for 9 years ,I also have a trailer in the LLC and I never thought about a boat but I will do that next time.I use Bennett Law in Misoula,MT they are always on time with tags and the LLc renewal. In December 2007, a man named Robert Thomas bought a $351,800 RV at the Dixie RV Super Store in the city of Hammond in his home state of Louisiana. Montana is a great state for business. After the Montana Department of Revenue submitted a $1.35 million request for 20 full-time employees, office equipment and operating expenses, Rep. Bill … So, an industry has sprung up to assist people from other states who want to take advantage of Montana’s laws while living elsewhere. IRC § 761 Electing Partnership Do a quick Google search and see the various people who ended up being audited trying to defend this scheme. Your exotic or expensive car or … Low 23F. Government officials in Arizona, California, Colorado, Maryland, Nevada and Washington state have created tip lines to catch tax cheats. 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. Depending on your state’s sales tax rate, you can legally save $25,000 or more on your purchase. Not really. “Per Montana (law), the business purpose for an LLC is not required for registration with the office.”. Get full access to the Bozeman Daily Chronicle's award-winning news and sports coverage, as well as arts and entertainment, opinions and more. The bad news is that you shouldn’t act upon any of the information without consulting a qualified professional attorney who will, probably, bill you by the hour. It can only work with LLCs formed in Montana because Montana is the only state which imposes no sales tax on the purchase of vehicles by its residents, including resident LLCs. There are several threads on this site, and many on others, about the promises and consequences. You will need to understand and comply with use tax laws in the states where the vehicles are located. The first was parked in the driveway: a 2017 Mercedes-Benz G550 luxury SUV that lists for as low as $92,000 — used. Are state sales taxes and use taxes too high? Members (owners) of the LLC and its managers do not show up on the Secretary of State website. In Flathead County you would just pay the flat tax and state taxes so you’d pay like maybe $280,” Blackman said. : Title 35-8-107 talks about the powers of a Montana entity operating on its own, independent from the members and managers. California, Massachusetts and Iowa have passed laws aiming to prevent their residents from using the Montana loophole. As the attorney in this relationship, I have to be the one to tell you the bad news, and it’s twofold bad news. But state officials said they’re not taking any steps to help other states enforce their tax laws, because all of this is legal in Montana and has been for decades. I’m thinking about forming a technology startup (that will probably fail like other startups ) and was trying to decide between Delaware, Montana, New Mexico, Nevada & Wyoming to form an LLC. A foreign Montana LLC is any LLC formed outside of Montana but registered to do business in the state. Search the complete digital archives for all papers in the Pioneer News Group. Editor's note: Articles produced by the Bozeman Chronicle staff and related to the coronavirus outbreak are accessible without a subscription until further notice. Wednesday's Best Deals: Aukey Webcam, PlayStation Plus, Eastbay Athleisure, Dog Chew Toys, and More. Montana LLCs don’t have to buy their vehicles in Montana to not pay the sales tax.”, The website even features a photo of former Secretary of State Linda McCulloch posing with staff. Set up a “Acme, LLC Auto Rental” company and tell the police and tax agency that you are renting it. The downsides to a Montana LLC are few if you are a full timer. The Chronicle attempted to track down a person who had recently bought an RV using a Montana LLC. If you don't have an email associated with your account email. For example, if you formed an LLC in Idaho but wanted to conduct business in Montana as well, you would register as a foreign LLC in Montana. You have permission to edit this article. they are necessary and 2.) They saved me thousands of dollars,” said Ken G., a retired Tennessee man who praised $49 MONTANA Registered Agent. 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. The Montana company bought the RV, not Thomas, the court said. POLICE from Leeds North West Neighbourhood Police Team continued much-requested parking patrols on East Chevin Road in Otley at the weekend. And an insurance adjuster, scrutinizing your claim might wonder what false statements you made on your insurance application. They create an LLC in Montana and then buy and register the vehicle in the LLC's name. Nebraska, which has a 7 percent sales tax, is the most recent, according to the National Conference on State Legislatures. Subscribers get full, survey-free access to the Bozeman Daily Chronicle's award-winning coverage both on our website and in our e-edition, a digital replica of the print edition. Apparently Georgia isn’t messing around anymore. Yes, I know, you are going to argue that “you” don’t own the car - the LLC does. $45/year Montana registered agent service. You must login with an email address. No more. There was a problem saving your notification. ... and before state's crackdown, they used to help customers with Montana LLCs. Can you get it trouble for it? But I am the first to point out that 1.) This is a phone call I get too often –…. The lender can use a signature stamp in the "Security Interest" box that states a release of interest in the vehicle. But hey - you saved thousands of dollars! 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. Register a Vessel in Montana. Submit by email, by post to 2820 W. College St., Bozeman, MT 59718 or use our online form. He noticed the Montana license plate on the RV and the Texas plate on the Jeep. I am not the fun police so I will tell you that in many states, you can probably do the foregoing and skate for quite a while without getting caught. The only downside is that you have to put an ugly Montana plate on your vehicle. Now I would probably … Posting on Facebook a spokesperson for the Leeds North West NPT said: “ On17th January, officers from your local NPT continued the much-requested parking patrols on East Chevin Road, Otley. Montana LLC entity search, s corporation search, c corporation search, corporation entity search, business name search, company name lookup, name search, business EIN, business name availability, agent of record, incorporation date, corporate officers, legal … They make up the revenue shortfall with income, property and use taxes. Starting an LLC in Montana is easy. Montana LLC Asset Protection How a Basic Montana LLC Works. Two years later, when the Louisiana Department of Revenue caught up with Thomas, officials said he owed $49,509 in Louisiana sales tax and penalties, but Thomas appealed — and won. Follow the step-by-step guide below to start your Montana LLC … The Montana license plate scam is a way for owners of high-end luxury to avoid paying sales tax by simply opening an LLC in Montana—which doesn’t charge car sales tax—and registering cars there. The Montana LLC scheme used by the Louisiana taxpayer has been around for years and continues to be promoted by Montana-based lawyers. The second was the 2015 Cadillac Escalade alongside it, … False statements which form the basis of the denial letter you will receive shortly in the mail. Kim Buchanan, Gallatin County Treasurer, and Laura Blackman, Motor Vehicle Supervisor for Gallatin Valley, explain how a loophole in Montana law allows out-of-state residents to avoid paying sales taxes by registering their vehicles in Montana. Ever spotted a luxury sports car with Montana plates in a far off state? Please log in, or sign up for a new account and purchase a subscription to continue reading. Does it work? And you are merely driving your “company car.” Even though the company is a sham set up for the sole purpose of evading taxes. “At the Office of the Secretary of State, we are tasked with following the law, not making the laws,” said … The Montana license plate scam is a way for owners of high-end luxury to avoid paying sales tax by simply opening an LLC in Montana—which doesn’t charge car … RV Roamer summarized the pros and cons of the Montana LLC, and I only wanted to emphasize a point. “Professional, courteous help throughout the process and as needed on-going. For tax purposes an LLC is called a disregarded entity. And the number of nonresident vehicle registrations is growing, said Joann Loehr, Montana’s title and registration bureau chief. This does not create an attorney-client relationship and is not meant to constitute legal advice, so the good news is we’re not billing you by the hour for reading this. Steve Lehto has been practicing law for 23 years, almost exclusively in consumer protection and Michigan lemon law. The next thing she knew, she was being pulled over by a local DPS trooper. Oregon, Montana, Delaware and New Hampshire have no sales tax and are good places to register high-end cars. According to the Montana Limited Liability Company Act, an LLC must use a proper business identifier as part of its name as described by the statute: “limited liability company” or “limited company” or the abbreviations “l.l.c.”, “l.c.”, “llc”, or “lc”. Featured Resources. Montana LLC Law, Montana Code Annotated Title 35, Chapter 8 of the Montana Limited Liability Company Act. But if you do, that Montana plate will pop up. I’ve seen a post from previously (on LeaseHackr) regarding Montana LLCs. Thank you for reading! Subscribe now to support local journalism and stay in the know with a full access subscription. An LLC is an asset protection entity that has no tax standing. Corporate taxes are amongst the lowest in the country, and sales tax doesn’t exist. Kim Buchanan, Gallatin County Treasurer, explains how a loophole in Montana law allows out-of-state residents to avoid paying sales taxes by registering their vehicles in Montana. “If you’re going to buy a Ferrari, Lamborghini, or some other exotic vehicle, you can buy the car or truck of your dreams with a Montana LLC and not pay sales tax,” the website says. Subscribe today! The California Highway Patrol tells the Chronicle that in 2016 they received nearly six times the number of reports of potential scofflaws with Montana plates on their vehicles compared to 2010. All Delaware corporations must conduct legitimate corporate business and follow strict guidelines to be allowed the benefits of their laws. Find a copy of the Chronicle. We appreciate your support and if you have not purchased a digital subscription that is a more sustainable path in helping local journalism. The Articles of Organization is the legal document that officially creates your Montana Limited Liability Company.. Weird question from my side: Which is the best state to form an LLC? Exception: An SMLLC doesn’t need to file a Form DER-1 if it is owned by an individual who was a full-time Montana resident during the tax period. Selling a Montana-titled vehicle If you sell your Montana-titled vehicle, follow this step-by-step to make the process easy. One such company, called $49 Montana Registered Agent in Whitefish, specializes in vehicle registrations, according to its website. It’s a strategy made possible by a loophole in Montana law, and wealthy out-of-state residents have been using it for years — setting up limited liability companies in the state and avoiding paying thousands of dollars in sales taxes to their home states. This form will require notarization. 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