This post is part of our Out of State Series explaining the benefits of using our Montana LLC Program to register your vehicles out-of-state. The basic concept of the process is known to many, but the specifics are a little harder to nail down. We are your Anytown experts! Our goal is to broaden your understanding of this process and whether or not it is right for you. Enjoy!
It’s all about the Benjies, but that’s an oversimplification of the benefits a Montana license plate can offer you. There is also the misconception that only rich people can get a Montana registration or benefit from having one. Last but not least, there is the idea that this process has to be highly complicated.
We’re here to tell you how easy Montana car registration can be, show you that you don’t have to be rich to take advantage of it, and explain the nonmonetary benefits of registering your vehicle in Montana.
Depending on where you’re at, it might seem like you see a disproportionate amount of Montana license plates. Well, this might not just be your imagination. Depending on the circles you travel in, I’d be willing to bet that you probably see many Montana plates if you frequent RV parks or car meets. This is odd for a remote state of only one million residents. You may also have noticed quite a few South Dakota license plates, which is not a coincidence.
There are a few key reasons why Montana plates keep popping up, and it is not your imagination. First, Montana has long been known for its lax approach to driving laws, most memorably the brief period where the interstate had no speed limit. Those days were the best.
In recent years, Montana has made a name as a hub for exotic cars, although very few of them reside there. Why? Along those lines, your first thought might be rich people taking advantage of Montana’s complete lack of sales tax.
Are Montana Plates Just for Rich People?
If the prime movers for Montana license plates on cars that don’t live in Montana are exotic cars, then it’s got to be for the super-rich, right? Not so fast, Slick. Out-of-state Montana car registration has never been easier, and as the price of new and used cars continues to skyrocket, it makes sense for all consumers to consider it. It is particularly beneficial for anyone living in heavily taxed states, not just the super-rich.
It is no coincidence that the states with the highest car taxes also have the strictest inspections and emissions testing, which Montana doesn’t have. Food for thought.
Montana license plates and Montana vehicle registration are not just for the super-rich, although they do benefit significantly. So how much can the affluent benefit from a Montana car registration?
That question depends on a lot of variables. For example, you reside in New York City, which has an 8.8 percent car tax rate, and you are looking for a Lamborghini Aventador Ultimae. This supercar has an MSRP of $501,900, with the prospective buyer on the ropes for $44,167.20 in tax alone. Maybe somebody in the position to buy a Lambo in the first place is better poised to shell out almost fifty grand for tax, but that doesn’t mean that dropping that kind of cash won’t sting just a little even if you are.
The broader answer to this question is no, registering a vehicle in Montana is not just for the super-rich. Although, of course, they benefit from it in more staggering monetary amounts. Still, proportionately the benefit is the same for everyone: Montana vehicle registration is not just about the wealthy individual saving taxes on his fifth Porsche Roadster. It’s for the parents trying to get by who are tired of their hard-fought pay going up in smoke. And as we touched on before, Montana’s lack of inspections and emissions testing are strong reasons.
Can Anyone Legally Register Their Car in Montana?
Can anyone legally register their car in Montana? Yes! Our Montana Registration Service is tried and true if you don’t want to lift a finger.
Anyone from any state can register their car in Montana, although it is not quite as simple as some of our other out-of-state registration programs. There are a few extra steps, but they are worth it in the long run to secure the kind of savings and benefits on offer.
Is the Montana Registration Process Limited to Cars?
The big question is this: is the Montana registration process limited to just cars? Of course not! The fine people of Montana drive and register all kinds of vehicles, all of which are sales tax-free to register.
RVs are a highly desirable item to register in Montana because they are high-ticket items. In a recent article, I quoted a new fifth-wheel trailer at around $109,000 MSRP.. This was not a trailer over the top by any stretch of the imagination, either. New bumper-pull travel trailers are well into $50,000. But these numbers haven’t even scratched the surface of what high-end RVs cost.
Class A motorhomes are high-end luxury vehicles that start in the $100k range (often more like $150k) and go up to seven figures. So think about this: if you live in a state with sales tax in the ballpark of six percent and purchase a brand new Jayco Embark (MSRP $384,150), your tax burden will be around $23,050. And if your tax rate is around ten percent, that tax bill will punch through $38,000.
But this is not limited to fast cars and expensive motorhomes. The reasons why Montana vehicle registrations are so popular expand to businesspeople. Examples? We’ve got plenty of those.
How about the blue-collar guy who has grown his business over the years, has a fleet of work trucks, and is buying more? A Ford Transit starts at $35,925. Suppose he is purchasing ten units and owns a business in LA. Well, that will come out to $35,925 in sales tax. That’s a whole truck!
Why Are So Many Exotic Cars Registered In Montana?
Okay, so back to the exotic cars. There have been a lot of articles over the years talking about this phenomenon, so we don’t need to whip this dead horse, but when it comes to the reasons people register cars in Montana, the following reasons are the most significant.
No Sales Tax
Montana has no sales tax. It really is that simple. Montana has long been a bastion of tax freedom for many years, so it was one of the original havens for supercars. Montana vehicle sales tax has always been zero, so it was a natural location for owners of expensive cars and RVs to ease their burdens.
It’s wild to think about, but there are plenty of cars that easily MSRP over half a million dollars, and if you are in a state that collects, say, seven percent in sales tax, you are looking at a staggering tax bill of $35,000 or more. On the other hand, if you live in the land of ten percent tax rates, that will be fifty grand in taxes!
Of course, there is a difference between the supercar driving Silicon Valley technopreneur with a Lambo or Ferrari and a retirement-aged couple who wishes to spend their savings on a high-end luxury car or, as we mentioned before, a high-end RV. Still, the effect is the same across the board.
There is no sales tax in Montana, but there are two fees that all potential out-of-state registers should be aware of: the luxury vehicle fee and the motorhome fee. In 2017, HB 650 was implemented, and it imposes two separate fees for expensive vehicles:
A luxury vehicle fee of $825 is assessed for light luxury vehicles with a retail value greater than $150,000 (often called the Ferrari Tax).
A fee of $800 is assessed for motorhomes with retail values over $300,000.
These two fees are an absolute bargain compared to paying sales tax on these vehicles in other states. Even in a very modest state with a four percent sales tax, the tax bill for a $150,000 light luxury vehicle is still $6,000. The same four percent tax on a $300,000 motorhome rings up to a stout $12,000. A nominal fee of $800 looks appealing compared to shelling out twelve grand in tax, which is still very low.
According to AARP, the national average state and local sales tax comes in at 7.12 percent. So let’s run the numbers according to these:
The $150,000 light luxury car sales tax at 7.12 percent will cost $10,680.
On the national average of 7.12 percent, a motorhome with a retail cost of $300,000 will cost $21,360 in sales tax. Ouch.
No Inspections or Emissions Requirements
One of the most common questions when registering a vehicle under an LLC in Montana is about vehicle inspections. People from states usually have staggering sales taxes and oppressive inspection requirements to contend with just to get on the road.
Montana has no inspections and no emissions tests required for vehicle registrations. That’s correct; no nagging smog checks. No compulsory annual safety inspections. Whatever your views are on smog and emissions (we all think smog is gross), we all know that smog gear on cars makes them less reliable and less efficient, and smog gear is always failure-prone. Eventually, it will fail, and it will cause your vehicle to fail the emissions test in a costly way.
Once it fails, you have to fix it to pass emissions testing, which is not cheap. Moreover, you cannot sell the vehicle in California unless you have a passing smog check. So your best bets are to pay for repairs to get it to pass, or you can sell it to the state, which will dismantle it.
That is a pretty lousy deal assuming you still like the car or truck and want to keep it but aren’t interested in pouring money into fixing emissions equipment, much of which may still be operating but not well enough to pass the test.
This is particularly important when buying a newer used vehicle. You might be passing for the first year or two, and it still might be a reasonably expensive used vehicle, and you end up flunking the smog check while you are still making payments, and you had a big tax bill laid on you when you bought it. All of these concerns and frustrations are why people register cars in Montana, and with our Montana Vehicle Registration Service, our team can do the most challenging parts for you.
Permanent Registration & Montana License Plate
One other advantage to a Montana vehicle registration is that it will appeal to people buying used or who intend to hold onto their Montana-registered vehicles for a long time.
A provision in the Montana Code allows owners of a light vehicle that is eleven years old or older to permanently register the vehicle for only $87.50. Once the vehicle is permanently registered, it is covered for life, with no more registration renewals.
The Montana vehicle registration process has been generating buzz for years; it is nothing new. But the interest was traditionally by the affluent looking for ways to keep costs down on high-end sports cars, or it was expensive motorhomes looking for the same.
However, with the recent rapid increase in average vehicle prices, with new car prices rocketing toward an average of $50,000, the demand for car registration in a state with no sales tax promise only to go up. Dirt Legal’s Montana Vehicle Registration Service is just right for you if you are looking for a new car, truck, motorhome, or even a used one. You can save a bundle of cash and ditch those smog checks, inspections, and possibly renewals. It’s a win, win, win, win situation.
It’s clear why people register vehicles in Montana. The only question left is, what will you do? Check out our Montana Vehicle Registration Service to see how our team can do the hard work for you, or read the articles below to learn more about the process.
Get your Montana registration done the easy way
If you have a financed vehicle and want to register it out of state, you have two main options: South Dakota or a Montana LLC (with your bank's permission). South Dakota offers a straightforward registration with no residency requirement and a low sales tax, making it accessible for financed vehicles. Alternatively, a Montana LLC can save you on sales tax entirely, but typically requires you to own the vehicle outright, or get explicit permission from your lender.