Why Montana LLCs for Cars Could Backfire

Is the money you save on sales tax worth forming what's essentially a shell corporation in Montana? I'm going to argue absolutely not. Do you really want to upset the government?

Listen to the full episode here:

Please visit our sponsors: 

Follow our socials:

[lilflip]

I can't blame people for trying when you see how misappropriated our taxes are.

[afhyoutube]

I recently switched my fleet to Montana. Not to skip taxes (I already paid them to my home state when I bought them) but because my state requires yearly inspections and emissions tests on cars I drive 500 miles a year and I know my cars much better than some random guy doing state inspections. It's a long-term time saver for me.

[silverfin]

It is your duty as an American citizen to avoid as many taxes as possible

[relentlessventures]

I don’t mess with the Montana thing BUT it’s insane how a vehicle is taxed repeatedly as it changes hands into perpetuity. Seems like after the initial purchase it should just be doc fees.

[NAVE]

I switched mine to Montana from California because of smog reasons. 353k mile Lexus is having some issues passing smog. And California is just totally tyrannical. Otherwise I’d be happy to pay the taxes in CA and have my home states plates.

I have several cars, and they are all registered here in California except for the one car that cannot pass smog. I ain’t doing it to avoid paying taxes, believe me I’d much rather do it legit and have my car registered in California. But I also just hate accepting defeat and paying this corrupt state thousands in taxes. Total overreach and theft, especially with the CARB and smog compliance bullshit.

[CalebsCars]

Eh I disagree on this one boys. I’m not publicly encouraging crimes but I’m not going to remind the teacher about the homework

[JKlein]

If I lived in Kentucky and owned a new 911, I might consider using the Montana LLC loophole. You don't pay tax at the point of sale on cars in Kentucky. You pay tax when you get your plates, and you pay tax every year based on the value of the car as it depreciates. But during covid used car prices went up. As a result, the yearly tax on my buddies beat to death 99 Lincoln Town Car went up. In Ohio, I pay sales tax once, and then $120 every two years for a new registration sticker.

[johnhufnagel]

I remember when Ed/VinWIKI had those videos on GA vs MT. Now that i'm thinking about it you might be right on it becoming a nothingburger, as there was no real follow up after the 1-2 videos on the subject. GA's sales tax regime, IIRC, is particularly nuts, as they apply MSRP for tax purposes ANY time the car changes hands, REGARDLESS of the selling price.
Maybe Doug could poke Ed to do a follow up GA/MT VinWIKI video?

I've been personally poking at the MT LLC concept, not because my cars are all that expensive #RamenNoodleBudget, but because I have a collection and I'd like to prevent any future hassles transferring them to my son or other heir(s), at the time of my passing. TECHNICALLY I'd save some cash every year on registration fees, as all of them are old enough to qualify for lifetime one-time registration, but the ROI is measured in decades for me.

[pathoyer]

It is not just Montana where car registration / tax issues occur. In the 90’s I was in a situation where two states required me to register my car in their state. My home state where my car was registered and insured along with having my drivers license, vote, and pay taxes. The other state is a high car tax state where I stayed while doing contract work the law required me to switch to their drivers license, car restriction, and insurance.

[SamamahBoy]

Makes sense to put your collection in a wyoming llc then register in your home state so attorneys can not see your assets. They will try to hit you with frivolous lawsuits.

[WoolfJ]

I've always thought unless you enjoy the thrill of wrestling with the Feds, just pay your damn taxes and if you can't afford the taxes don't buy it unless it's necessary...the Feds are scary as hell lol

[qxnexp]

Big corporations much bigger than government avoid taxes and exploit loopholes all the time.

I feel for individuals who try to save money, time, hassle, and avoid gov overreach in their own way.

[LoveMountainClips]

I know this is an old video but i was curious on your viewpoint regarding car sweepstakes winners. Those who live in a high-tax state are looking at forking up over $20, 000 in taxes. I'm positive sweepstakes companies with the additional cash on top still don't cover the insane Federal, State, and Sales tax of some states. The Montana LLC loophole could be a way to mitigate cost while operating in the legal grey area. Particularly for those individuals who aren't collectors who have money where they otherwise could afford the tax but are instead just a unfortunate winner who is unable to accept their prize due to taxes or have to sell it right away just to cover taxes.

[TheOriginalLugnuts]

I’ve had company cars that were registered in the home state of the business that I worked for. Never had an issue with it. I believe the insurance was a commercial policy.

[themancalledx]

B.S. technically legal is all that counts.

[chalachin]

This is useless video. Montana llc been going on for over 10 years. Its fully legal.

[glennmorris]

Just mailed my MT paperwork out today on a car thats been sitting with no other way to register it. If things go smoothly, I may switch my fleet. Lets see how this goes…

[cmatrickshots]

I do have a question on insurance. My purpose for wanting to do the llc is for insurance rate purposes as well as registration fees. Do you still have to insure the vehicles in the state you reside in? Or can you insure them in the state the llc is in? If you don’t have a physical address in that state.
Thanks

[DavidLeonm]

I did mine because i can get permanent tags/registration for my vehicles. Also the state that i had them registered in, did away with inspections but are charging for its replacement and i dont have to deal with lines and people. Also security in case family wants anything from me ... And my vehicles aint nothing fancy, just something that when i visit friends up in MT, i look like a local

[Vales.vergahomie]

I have to disagree bro in California if u just have intakes on a stock ass car u get state reffed id rather register my car in Montana and actually be able to enjoy MY own car 🤦🏽‍♂️