How To Register ANY Car TAX-FREE!

Montana is widely known as one of the most accessible states in the Union, making it one of the freest places in the known universe. Instead of putting the onus on the driver to determine what was reasonable and prudent, they were the state that gave the finger to archaic speed limits. Even though this was a short-lived era, it still captured the ethos of the Montana driver, the rugged individualist living on the last frontier, the last vestiges of the Wild West. 

Only a short time later, those in other states would use Montana’s generous tax code and lax vehicle registration requirements. However, it was not as if the state of Montana was altogether that put out by it; Montana was making money on these deals just by existing basically. The only way to make it work is to have an asset-holding LLC in the state of Montana, which is a net gain to the Montana state coffers, as is the registration itself.

Generally speaking, this option has been employed mainly by owners of exotic cars interested in safeguarding their assets from the prying arms of their home state, of which California comes to mind. Why?

What’s the Draw?

California has more millionaire households than any other state and ranks seventh in terms of the ratio of millionaire households. But with over 1.1 million households, there is plenty of wealth going around to buy expensive things, like, exotic cars. For perspective, 1.1 million people is over twice as many people as the entire population of Wyoming (~500,000). It is about 300,000 more than South Dakota (800,000). It is over half of the inhabitants of Nebraska (~1.9 million).  

In short, that is a LOT of wealthy people concentrated in one state, and it is no wonder with Silicon Valley and Hollywood. So it is no mystery why there were so many exotic cars coming out of this area. Also, California has some of the nation's highest initial registration taxes and fees. So, for example, a brand new (2022) car costing $500,000 being registered in Burbank will run the owner a whopping $51,067.00. 

But what about the guys and gals out there who are not super-rich? How about the local plumber who started out using his pickup truck but now is purchasing a small fleet of trucks as his business grows? Think about this: if he buys ten fleet trucks at $50,000 each, he will be in for over $50,000 in registration fees. That’s the eleventh truck! Or it's the annual salary of an employee that he now cannot hire or has to get rid of. Or it might be the single mom or dad who decides to purchase a new car for once to ensure they can get to work and pick up their kids reliably. For a $30,000 new car, they will owe around three grand! That is easily a month's net wages for a middle-class family. 

The average person needs a way to reduce their financial burdens. The person who owns a small business in an expensive state is not necessarily going to be able to uproot their business on a whim, so why should they get stuck footing these insane bills?

What is a Montana LLC?

Thankfully, there are still states that respect your right to choose and won’t make your life’s saving just to put a tag on your car. For example, Montana is a great, free state that affords out-of-state registration to the everyman. 

Some states that Dirt Legal provides services do not require a physical presence in their state for registration. However, Montana does mandate a physical presence in the state. Of course, that does not necessarily mean that your primary residence has to be in Montana. 

So, in place of a physical residence in the state of Montana, you can instead establish a Montana LLC, which then serves as your proof of residence in Montana.

So, what about multiple assets? As we considered earlier in the article, what about the business owner with multiple assets? Well, that is no problem either. If you would like to register multiple vehicles (a fleet, for instance), we will gladly help you add those additional assets to your LLC. We can even help you establish an LLC if you don’t have one yet.

Why Should You Consider Montana Car Registration?

So, what is excellent about registering your car or truck in Montana? Like, why should you go to all the trouble of establishing a Montana LLC before you can register the car?

First and foremost, it is not hard for you to set up a Montana LLC with Dirt Legal. We have a team of experts who are well-versed in the process and are here to help you through every step of the process, including the in-residence portion. 

So, since we have already provided a means for the service, what benefits you, the blue-collar guy or gal with boots on the ground in the more unreasonable states?

The so-called “Ferrari Tax” is not actually a tax; it is an annual fee for luxury vehicles. Per the Montana Legislative Fiscal Division: “In the 2017 Regular Session, HB 650 implemented a new fee imposed on luxury vehicles and motorhomes registered in the state of Montana. The fee is $825 for luxury light vehicles with a retail value of greater than $150,000 and $800 for motorhomes with a retail value of greater than $300,000. The fee is in addition to the normal registration fees outlined on the first page above, and revenue from the fee is distributed into the motor vehicle administration state special revenue fund.” Straight from the horse's mouth.   

Dollars and Sense

So let’s compare notes with receipts: a nicely equipped F-250 XLT Lariat with the 6.7L PowerStroke diesel comes in at $63,690 in my neck of the woods. I decided to take it out of LA and figure it in more blue-collar Victorville, where taxes are a little lower. The total: a whopping $5,573.00 in sales tax for new registration. In Montana, you will be paying exactly $5,573.00 less in sales tax for that same truck. 

So let’s dive down a little deeper here. The fee for tagging your new truck in sunny and arid Victorville is $6,281.00. But if you choose to use our Montana Vehicle Registration Service, you will pay a flat fee of $1,595.00. Total savings? $4,686.00. Just like that, you are ahead by almost five grand. 

Ok, that’s great. It is nice to know you can update your farm and ranch truck and put your money towards something more important than state taxes. But let’s go back to that small business owner purchasing a fleet.  

The Ford Transit cargo van comes in at $35,270.00 per unit. Our entrepreneur is purchasing a fleet of ten units, which will be $352,700.00. The sales tax for each unit is $3,086.00, so the total sales tax of $30,860.00 for the fleet. Now, if our craftsman uses the Montana Vehicle Registration Service through Dirt Legal, he will hold onto that thirty grand and put it back into his business.  Our process includes the capability to register multiple assets under one LLC, with each additional vehicle costing $699 at the time of writing this article. So he will be in a total of $7,886.00 through Dirt Legal with a fully registered fleet of vans, rather than the $39,680.00 he would have spent registering that same fleet in California, with savings of $31,794.00. 

You can see how the Montana Vehicle Registration Service through Dirt Legal can benefit most car buyers out there. In 2020, the average price of a used car was $22,300.00, and since the used car market is booming due to supply chain blockages, with an average increase of 39.8% according to the U.S. Bureau of Labor Statistics Consumer Price Index. So that $22,300.00 used car will be more like $31,175.00. We can roughly estimate that California’s initial registration fees and taxes are approximately 10% of the purchase price, so around $3,100-$3,200 depending on the locale.

Montana car registration is not just for the super-rich; far from it. Suppose the average consumer will benefit from Dirt Legal’s Montana registration service. It will cost half of the standard fee to register your average-priced used car in California. 

Isn’t Montana Car Registration Just For Exotic Cars?

We have already touched on this, but it bears repeating: the Montana registration service is undoubtedly beneficial for the affluent owners of exotic supercars. But let's be very honest here: they are in more of a position to absorb the exorbitant registration fees posed on their toys than the single mom or dad. He is just trying to buy a reliable car to work and pay the bills. Or the young adult just starting who can finally afford to buy a decent car for the first time in their life but can't afford another ten percent on top of that. 

Of course, it’s most likely to be used by supercar owners who can save anywhere between $15,000.00 and $150,000.00 in taxes alone, which is why the Montana legislature addressed this issue and assessed a tax on cars over $150,000.00. 

What Else Is Covered?

A Montana LLC is not just for your cars, trucks, and RVs. You can also use the same LLC to put your motorcycles, boats, jet skis, snowmobiles, and just about anything else that you would want to register. Once you have established a Montana LLC, it is a breeze to add other items to it. Additional vehicles and other assets can be added at any time in the future, and there is no limit to the number of assets that can be added. 
Oh, and did we mention that the registration is permanent once the vehicle is at least eleven years old? That’s right, the registration will not have to be paid again after hitting that age.

How Can I Finance a Vehicle and Register it Out-of-State?

So here is where many car buyers might run into problems. You know about the advantages of registering your car in Montana. It is tax-free for cars less than $150,000.00. The tag is permanent for cars over ten years old.  But you cannot afford to buy your car with cash. But here is the problem: your local bank will probably give you the side-eye when you register it in Montana, but your home of record is in California, New York, etc. So, you are sunk. 

Not so fast. You can still finance through specific lenders, namely LightStream, who will issue lending with no appraisal and no age or mileage restrictions (we may be compensated by LightStream through this link). This excellent service will deposit funds straight into your bank account, making you a cash buyer. Additionally, since you are a cash buyer, you can register your car no questions asked, wherever you want to. Montana? No problem. We believe that the free market provides solutions to help you buy your car and that you should have the choice to live where you want and register your car where you want. Why should you have to miss out on the incredible beauty of the Golden State just because the taxes are insane?

The Montana Vehicle Registration Service is an excellent service for the affluent who want to register their supercars and save tens of thousands to hundreds of thousands. But it is also a service for the everyman, for the people who believe that their hard-earned cash is better suited in their possession than their DMVs. So we will do the leg work for you so you can sit back and watch your bank account grow, not shrink.