16:35 | 05/08/2022 Print
|Fact-Check: Many Luxury Cars Have Montana License Plates Knowinsiders.com|
|Table Of Content|
A legal loophole lets owners of expensive cars avoid taxes and emissions standards in other states. Tightening rules could send the practice into overdrive.
Why do you see so many Montana license plates all over the country especially on motor homes RVs and sometimes high-end expensive vehicles? Well, the reason why is there are some advantages that people may use through titling and registering a car in the state of Montana that could be advantageous for an owner who may have a full-time RV or maybe has multiple houses and multiple addresses.
The two most common reasons are:
1.Sales tax advantages
Here is the fact-check on why many luxury cars have Montana license plates.
|Photo: Getty Images|
A vehicle registration plate, also known as a number plate (British English), license plate (American English), or licence plate (Canadian English), is a metal or plastic plate attached to a motor vehicle or trailer for official identification purposes.
All countries require registration plates for road vehicles such as cars, trucks, and motorcycles. Whether they are required for other vehicles, such as bicycles, boats, or tractors, may vary by jurisdiction.
|Photo: NBC Montana|
You need to successfully register your vehicle in your state to obtain a valid license plate. To register your vehicle, you'll need to show proof of ownership via your vehicle's title and then have a number of documents that vary by state. States typically require you to show some combination of the vehicle's title in your name, your driver's license, proof of insurance, and information about your vehicle, such as the Vehicle Identification Number, make and model, and odometer reading.
While you can purchase an auto insurance policy even if you don't own a vehicle, you may not be able to be cover the actual vehicle on your policy without registering it. And without registration, you won't have license plates or the required tags that mark a valid registration.
The temporary license plate comes as part of the registration process, most commonly when a vehicle is purchased from a dealership. Since you need to show proof of insurance as part of the registration process before you drive your newly acquired vehicle off the dealer's lot, your auto policy applies to a vehicle with temporary plates.
The state of Montana does not charge sales tax on vehicles. So if you have a vehicle that you’re purchasing and you can title it in Montana if it’s legal, you may be able to avoid having to pay sales tax, which you would have to pay if you title it in a different state.
Now you want to ensure you’re following all proper laws and regulations and not doing tax fraud or tax avoidance. But if you legitimately have a multiple-state residency, have a full-time RV, or you have some domicile in Montana, you may be able to title your vehicle in that state and not pay sales tax.
In order to do this, you will have to create a corporation in the state of Montana unless you’re a resident with a Montana license, but that’s not what most people do. Most people are residents of another state or multiple states. They form a corporation in Montana and title the vehicle in that corporate name. So you’ll have some corporation filing fees usually a couple of hundred bucks and you may have to pay a service to be a registered agent in Montana to title the vehicle in that state.
You also have to consider insurance issues because if you get vehicle insurance for a motor vehicle titled in Montana, you’re representing to your insurance company that the vehicle is domiciled in Montana. Also known as the location where the vehicle is garaged. So you want to make sure you’re not misrepresenting your garage location to your insurance company and here’s why. You might think that you could just tell them “Hey it’s in Montana”, but if you have any type of a claim for an accident or damage, whether it’s your fault or not, you may have issues where the insurance company wants to deny your claim because you’ve misrepresented on your application where it’s garaged.
Why do they do this? Well, if they’re giving you an insurance rate based on having your vehicle most of the time driving in Montana, it might be a lower rate because it’s a safer state. But if it turns out, you live in a big city downtown Seattle or downtown Chicago, and the rates would be higher there because of more theft, accidents, and more risk of damage, you might be accidentally unintentionally committing insurance fraud.
So you want to make sure you get good legal advice from an attorney and that you get good insurance advice from your insurance agent before you place insurance on the vehicle in Montana. You may be able to get insurance for your Montana title vehicle and still have a garage address elsewhere, just make sure your scenario matches the proper use of this process.
That’s the reason why there are so many exotic vehicles and high-end vehicles, and expensive motor homes that have Montana license plates on them. Next time you’re driving by an RV resort or an exotic car meet-up, look at the license plate and see how many are Montana. Even if you’re not anywhere near Montana, you may be surprised at how common it really is.
The debate about registering a car in Montana can seem like a lot of fuss over a piece of metal. But real money—and ethical considerations—are at stake.
Car owners from Mendocino, Calif., to Miami are titling collectible cars in Montana, even—especially, in fact—if they don’t live there. Some start an LLC in the state, which gets them a mailing address and residency status of sorts. Others acquire a mailbox address or property at which they can claim Montana residency.
In 2021, fully 10% of all McLaren P1s ever made—cars worth well over $1 million apiece—were registered in Montana, according to the Montana DMV. Four of the 100 Pagani Huayras ever made were registered in Montana. They were listed at $2.5 million each.
Montana offers two significant benefits. First, it does not charge sales tax on personal property. (Alaska, Delaware, New Hampshire, and Oregon are the other states that require no sales tax.) This means that someone who spends $500,000 on a new Lamborghini need not pay an additional $36,000 or so in taxes to acquire. (California’s sales tax, for instance, is 7.25%.) This is not chump change, even for those who can afford it. Many see it as a smart move.
Second, Montana does not require vehicle emissions tests or annual inspections. This is because, with less than half the population of the borough of Queens, N.Y., it has no populated areas federally classified as having “non-attainment” status to meet the Clean Air Act's regulations. In California, by contrast, owners must ensure that all vehicles made after 1975 meet emissions standards and can pass safety inspections.
Where 10 years ago the sight of a Ford GT sporting a blue Montana plate would be rare, a drive to the popular Friday morning car gatherings at Newcomb’s Ranch outside LA reveals that even relatively pedestrian 911s carry Montana plates.
|Montana currently offers at least 14 license plate designs. Photographer: Joe Sohm/Visions of America/Universal Images Group Editorial|
Technically, the practice is legal. Companies help facilitate it. Search for “how to register my car in Montana” and you’ll see a dozen sites offering services to help clients form LLCs. You needn’t even set foot in the state. They’ll remotely handle the registration titling and fees.
Law enforcement authorities and legislators are familiar with the scheme. (California State Police have started cracking down on the residential discrepancies of drivers pulled over for other infractions with California licenses and out-of-state plates.) In 2017, Montana legislators proposed a sales tax of up to 1% on cars and recreational vehicles worth more than $150,000; aimed at out-of-state enthusiasts, House Bill 650 was nicknamed the “Ferrari tax.”
At the time, the Bozeman Daily Chronicle estimated that the proposed tax could raise $2.5 million annually for the state. But car and RV dealers objected—strongly. Ultimately, an $825 “luxury” fee was added to ordinary registration costs for vehicles worth more than $150,000.
In addition to normal registration fees, individual counties in Montana may also impose a so-called local option tax of up to 0.7% of a vehicle’s retail value, providing direct revenue. As of August 2021, Big Horn, Deer Lodge, Flathead, Granite, Phillips, and Richland counties lacked that local option tax. Not surprisingly, Flathead, Granite, and Deer Lodge counties have the largest amount of luxury vehicle registrations, according to data in a vehicle registration primer for the Montana DMV. All told, light vehicle registrations contribute roughly 4% of total revenue collections for the state, according to the primer.
Unless and until it becomes outright illegal, the decision to title something like a $2.4 million Ferrari F40 in Montana falls to the individual car owner making personal ethical choices. Many collectable cars are denoted as “gross polluters” in the state of California and do not pass emissions tests. To register them elsewhere is to effectively cheat the system that California officials set in place to help reduce air pollution for all.
Then there are the tax issues. If you can’t afford the taxes to register your supercar in the state where you live, perhaps you can’t afford the car, says Barry Ritholtz, a proud vintage Corvette and Defender owner and chairman of Ritholtz Wealth Management LLC.
When you first visit the website of the Montana Motor Vehicle Division to peruse the state’s offerings and pick a plate of your own, you’re first shown the “standard plate” — but then you’re given the option for four more “standard plate” designs.
Below that, the website lays out another interesting provision: the requirements for registering original plates for your vehicle. Got a 1967 Ford Mustang that you want to register in Montana? Find a pair of 1967 Montana license plates and the Montana Motor Vehicle Division will allow you to re-activate them for use on your vehicle. These aren’t to be confused with “antique” plates, which are new plates featuring throwback designs from decades past — which, of course Montana also offers. Nonetheless, this throws another 50 or so potential designs into the mix.
Beyond that, provisions are outlined for military plates, veteran plates, amateur radio operator plates and so forth. But the real fun starts when you dive down the rabbit hole that is the “Available License Plate Designs” page and begin to look at all of the different sponsored plates offered. You’re taken to a screen showing 14 different license plates, all representing a different pastime or cause. But these are mere categories — each image serves only as an example of the madness that lies within when you actually dive into that category. A look into the “Agriculture and Forestry” section shows six different distinct designs to choose from, including those for the Montana Department of Livestock, the Montana Timber Legacy Foundation and the Montana Weed Control Association.
The Government and Communities section reveals 23 different options, representing many cities, towns and Native American reservations in the state, with some jurisdictions receiving multiple designs. The Montana Quilters get a plate in the Arts & Culture section, while the Montana Snowmobile Association and the Outlaw Baseball Club both have designs under the Sports & Recreation category. Two designs didn’t fit into any of these categories, and were thus given their own “Other” section, while the Service Organizations & Associations category houses 66 unique designs.
This massive variety is the result of Montana’s “Sponsored Plate” program, which allows organizations to submit their own designs, provided they complete an application and pay a $4,000 fee. Each of the unique sponsored plate designs requires drivers to make a yearly donation to the charity or cause at hand, making the litany of designs not only fun, but also a great fundraising method for each of the programs represented.
Before you ever go to the department of motor vehicles, the following are the key points of what you need to know in terms of where to go, what you will need and what to expect. New residents must register a new vehicle within 60 days of establishing residency, so don’t wait too long to take care of this or you run the risk of receiving a nasty fine of several hundred dollars.
There are 56 counties in Montana currently (here is a handy interactive map) and each one has its own county treasurer DMV office. Identify which one is closest to your location and consult their individual hours. Typically these offices open between seven to eight pm and close at five pm, but most do not process anything past 4:30 pm. Keep this in mind for when you decide to go, typically the earlier you can get to the office the better.
Initial registration transactions must take place at these physical offices. Renewals in some cases can take place online but for new registration, unfortunately there is no alternative to going in person currently available.
The vast majority of vehicles will fall under the category of “Light Vehicle” which includes passenger cars, pickup trucks (less than one ton in weight), vans and sport utility vehicles. There are three registration periods currently offered in Montana: 12-month, 24-month, and permanent. Individuals must bring their title and proof of vehicle sale to the county treasurer’s office for Montana car registration regardless of the desired registration period.
The registration rate varies in Montana based upon the vehicle’s age. New and vehicles up to four years old are required to pay $217 in total, those aged five to ten years $87 and all light vehicles aged 11 or more years $28. Notably, these fees include a three percent administrative fee that is incurred whenever the transaction is completed.
Another cost that bears mentioning is the county tax, which will vary depending on the area. Those in a hurry to receive their registration and Montana license plate can also opt for faster delivery for an additional charge at the discretion of the local treasury office.
For those applying for permanent registration, there is also a $10 fee for local law enforcement support and optional donations for state parks. If your vehicle falls outside the classification of “Light Vehicle” then you’ll need to be aware of a significantly different scale of payment, which largely has to do with size rather than age.
If for some reason you do not currently possess the title of your vehicle, then you must go through the titling process before you can properly register the vehicle. Often these require a separate appointment to assess and properly facilitate, so if this is something you are in need of, be sure to contact the office beforehand to explain your situation.
After you have successfully registered your vehicle in Montana and paid all associated fees and costs, you can then decide what type of license plate you wish to receive from the county treasurer’s office.
There are hundreds of different Montana license plate options currently available, everything from standard plates to highly specialized sponsored ones with all kinds of artistic designs. These cost more than the standard-issue plates, but the funds directly go in support of an incredibly wide variety of causes relevant to the state’s needs.
Here’s a complete listing of all the current Montana license plate offerings:
As you can see, there are plenty of options to find a license plate that not only fits your budget and the personal style of your vehicle but also supports a worthy cause.
If you decide to purchase a plate that is not currently available at the local county treasurer’s office nearest to you, the office will likely grant you a temporary permit that is good for up to 40-days.
To use these temporary tags simply put the paper tags in the plastic container provided by the office and place it towards the rear of the vehicle, either the back windshield or the normal location of a license plate. You will need to remove and responsibly dispose of these tags as soon as your permanent tags arrive.
If you wish to purchase personalized plates this will incur an additional fee of $25 for standard plates, and to do so on a sponsored plate will require further costs and a special application. Be prepared for a longer wait period for these plates to be created and mail, and in the interim time, temporary tags will be used in their place.
After reading through all this information Montana car registration might seem like a mountain of an obstacle to overcome, but the reality of the process is far more manageable than that. Services exist that can help individuals process their applications, and this can simplify things, but ultimately the least expensive option is to research the process, identify your needs and follow the steps outlined by the Montana state government.
With a little due diligence and patience, your Montana car registration process can be completed in just a few hours. Once you have this and your license plate firmly affixed to your bumper, you can then drive anywhere you please in the Treasure state throughout 2022 and beyond.
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