Why Form an LLC in Montana? These Are the Benefits

This article is part of a series of articles focusing on the Montana LLC registration process. Check out the whole series here!

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Montana has a tumultuous history surrounding driving. It is a vast state, one of the largest in the nation, yet it has one of the smallest populations. This has led to some crazy ideas along the way. For example, depending on who's talking, the best (or worst) was no established speed limit on the interstates. While this was short-lived, it was representative of the free-spirit feeling of the state. 

Might that have something to do with all the supercars, high-end luxury cars, and fancy RVs being spotted all over the nation sporting Montana license plates? Well, this is not an urban legend. It is accurate, and people have selected Montana as a place to register their cars for several years. Not just wealthy people, either.

We will look at how to get an LLC, the benefits of registering your vehicle to an LLC in Montana, Montana sales tax, and more!

Where It All Began

Montana is home to almost eighty mountain ranges, although they are all part of the greater Rocky Mountains. It is a cold state, not surprising when you consider it shares a nearly 550 miles border with Canada. 

Montana has no official nickname, but several seem to describe it well. My favorite is “The Last Best Place,” which is fitting and more widely known. It has a storied history that reads like a Larry McMurtry novel (yes, Lonesome Dove ends there) and relies heavily on the trades that made this country. 

We can’t forget about the booming tourist industry in the state, with over thirteen million annual visitors and revenue of over $3 billion from the industry. 

The Wild West

Montana was home to several indigenous tribes. It was home to some of the more notorious battles between native peoples and U.S. forces, most notably the Battle of Little Bighorn. General Custer was defeated and ultimately killed. 

But aside from skirmishes and battles between native tribes and settlers, Montana was one of the original homes of large cattle ranches, which can be traced back to the 1850s. 

Big Area, Few People

In terms of area, Montana is the fourth overall in size of all states, behind Alaska, Texas, and California. Interestingly, California is by far the largest in population, roughly thirty-nine times the population of Montana. The wildest trivia fact about Montana’s size is that it is a little larger than the entire country of Japan. 

Yet Montana possesses the seventh-lowest population of any state in the nation, ironically sandwiched between tiny Rhode Island and nearly as small Delaware. What a strange world. 

Montana has a population density of just over seven people per square mile. This ranks as the third-lowest population density, just behind its southern neighbor Wyoming (six people per square mile). It is a fine piece behind the number one spot, Alaska, averages just over one person per square mile. 

The Free State of Montana 

Let’s backtrack to the freedom factor in Montana. There is a simple truth about states with such low population density: it is hard to regulate them fully even if a government wanted to. How will you police a state that is primarily enormous farms and ranches, and most of the rest are mountains? 

Not surprisingly, our California and New York friends came in at forty-nine and fifty, respectively. So if you wonder why we talk about those two states an excessive amount, this is why. 

Montana was the beacon of freedom in this country back in the day. Big country, big trucks, and lots of fast cars. No speed limit? That was short-lived.

This Is About Vehicles, Right?

So now that you know what Montana is and what it is not, all of this begs the question: are all of the supercars with Montana plates running around relics from the days of the modern American autobahn? Does every ranch in sight have a ten-car garage packed with supercars? And why are so many Ferraris, Lambos, and McLarens with Montana plates spotted in places like California?

There are several reasons why you see so many Montana plates running around outside the great state of Montana. They all revolve around the idea of registering the vehicle to a Montana LLC.

Registering Vehicles to a Montana LLC

The Montana LLC itself is a simple concept, but the process of forming one is often cluttered with many red tapes. According to everyone’s friend, the IRS, an LLC is a “business structure allowed by state statute. Each state may use different regulations; you should check with your state if you are interested in starting a Limited Liability Company.” 

They explain that “Owners of an LLC are called members. Most states do not restrict ownership, so members may include individuals, corporations, other LLCs, and foreign entities. There is no maximum number of members. Most states also permit “single-member” LLCs with only one owner.” That second quote is vital for Montana vehicle registrations. It is no problem to have one person on the LLC, or a couple of people can easily be on one together. 

Montana requires proof of residence for all vehicle registrations, a statutory requirement that is not likely to be reversed. Because an LLC satisfies the residency requirement, vehicles can be registered in Montana through a Montana LLC even if the LLC’s members live elsewhere.

Several other states have no requirement for proof of residence. However, those states lack crucial factors in Montana: some require inspections, others require smog tests, and none are tax-free. On the other hand, Montana is completely tax-free when registering any vehicle, an important aspect to note when considering our Montana LLC Vehicle Registration Service.

An LLC as a Holding Company

There are many different kinds of LLCs, most of which pertain strictly to business ventures. In Montana, the type of LLC you will want is a holding company or an asset-holding LLC. As the name suggests, an asset-holding LLC's primary purpose is to protect the LLC owner from any damages that owners might incur legally or financially against the assets. In other words, it protects the owner of the assets from their finances being taken during legal action; the legal action is taken against the LLC rather than the person. Luckily, we’re not too concerned with that aspect of an asset-holding LLC for our purposes.

More important is that an asset-holding company is the de-facto owner of the assets inside of it. You, the purchaser of the vehicle, are not the owner, whatever that vehicle may be (and it can be more than one item). It belongs to your company in Montana. But, of course, it is perfectly legal to drive it as the owner of the LLC, and it is perfectly legal to do so in any state. This forms the complete picture of registering a vehicle to a Montana LLC, whether a car, truck, RV, UTV, motorcycle, or anything else with wheels.

How to Form An LLC In Montana

As one might expect, forming a Montana LLC is a daunting process to the uninitiated, especially if you live in another state. Fortunately for you, Dirt Legal has set up the infrastructure for the entire Montana LLC process, from the cradle to the grave, so you don’t have to get into the weeds with it. 

Why Montana?

This sounds like a few more pieces of the puzzle than you want to do, right? We get that completely. But here’s why you need to take a second look at why you should have an LLC in Montana for your car registration. 

Montana has zero sales tax on car purchases, a fact many other states do not replicate. Even our friends in South Dakota, another state we work with regularly, can’t make this claim. Their tax rate is a flat four percent, which is superior to many states (notably California and New York, which have rates as high as 10.5 percent and 8.8 percent, respectively), but still a long way from zero, and that difference can add up.

What Montana Tax Rates Really Cost You

Tax breaks afforded with Montana vehicle registration through an LLC are astonishing, especially for the affluent. For example, for a 2020 Ferrari 488 Pista Spider, with a base price of $350,000, the tax bill alone could be as high as $36,750 if you live in the LA area, and if you want to cruise NYC in the 488, your tax bill will still be $30,800. 

But what about savings for the everyday man and woman? The ones who have saved and worked in the middle class to afford a nice fifth-wheel rig and a decent truck to tow it with?

The invoiced price on a 2022 F-350 DRW Limited with the 6.7L turbo-diesel is a staggering $87,602. For this one, let’s take somewhere with a more moderate tax rate than California, like Texas. 

Texas has no state income tax, but they honestly make up for it in property and vehicle taxes. Auto taxes are set at 6.25 percent, so significantly better than California, but the bill will still be a substantial $5,475.13. There isn’t anyone I know who wouldn’t mind saving five grand on taxes. 

But you aren’t going to just drive that F-350 around for fun, not with gas prices where they are. This heavy tow rig is built for heavy trailers, like the Eclipse Attitude fifth wheel, MSRP $109,726. Between these two vehicles, the total value will be in the ballpark of two hundred grand—making the Texas-sized tax bill between the two roughly $12,333.

Montana Car Registration LLC

This unsightly tax bill does not exist with our Montana LLC vehicle registration service, and neither do the headaches involved in the process. We will do the legwork to set up the LLC; you just need to check your mailbox. Then, fill out our paperwork and return it to us.

Your LLC is not limited to one vehicle, but it's not limited to cars and trucks either. You can have anything you want under it. You name it, cars, trucks, RVs, boats, motorcycles, airplanes. Once it’s established, we can help you add additional items to the LLC. 

• One added benefit of auto registration in Montana is no inspections in the state.

• No smog checks and no annual safety inspections, either

• Oh, and did we mention permanent registration?

Once a vehicle is eleven years or older, it is eligible for permanent registration. You can pay a one-time fee and never worry about registering that vehicle again. This is not the same thing as your LLC, for which there is an annual fee to keep your LLC open to continue showing your proof of Montana residence.

So, why have an LLC in Montana? As car prices rise to historic highs, every dollar counts more than ever. Even in states where car registration tax is five to six percent, the tax on a ninety thousand dollar truck is thousands. But this isn’t just for those of you buying new trucks and RVs. A Montana LLC is there for everyone tired of their hard-earned money going up in smoke at their local DMV and tired of paying outrageous fees and getting pointless inspections. If I’m talking to you, then hit that button and get started on our Montana LLC registration process. It’s fast, easy, and will save you money and frustration right from the start.