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Against my better judgment I am posting what might be a controversial topic. I tried some NAGTROC contacts but couldn't find enough intel, so I am hoping the broader forum might be able to help.

Some of us live in high personal property tax counties and have to pay an annual tax on our cars. Through some sources I became aware of an option to form a Montana LLC and have the business own the car, thereby swapping your home state/county's tax rate for the tax in a particular county in Montana (which is far lower). There are regulations in each state that dictate whether or not this is feasible. I am not interested in opining on the legality or the regulations associated with this strategy.

I would be thrilled to hear from anyone who has undertaken, successfully or otherwise, this strategy. There are two law firms well known for providing this service. If you have any knowledge around this matter that you are willing to share, I am very appreciative for the help. Feel free to PM me if it's sensitive.

Thanks!
 

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Knowing what State you live in probably would be a good start.....And you're right, this is very controversial.....I won't get into a discussion about that but will say unless you have a fleet of exotic cars (which you may have) or plan on a fleet the legal costs and LLC costs far outweigh the benefit of your endeavour.....I know in some states, MA included, it is illegal....best of luck
 

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Discussion Starter · #3 ·
Thanks Gilly. I'm aware of the LLC annual maintenance costs and have computed the tax rate difference between my county and the Montana county of registration. It is economically advantageous to the tune of a few thousand a year. I'm aware of it also being targeted in Iowa. I have not read of any issues in my home state; moreso because I qualify due to my travel (and where the car is garaged for certain periods of the year) so I have no concerns about the legitimacy of the registration. I appreciate you highlighting the issues for others.
 

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Thanks Gilly. I'm aware of the LLC annual maintenance costs and have computed the tax rate difference between my county and the Montana county of registration. It is economically advantageous to the tune of a few thousand a year. I'm aware of it also being targeted in Iowa. I have not read of any issues in my home state; moreso because I qualify due to my travel (and where the car is garaged for certain periods of the year) so I have no concerns about the legitimacy of the registration. I appreciate you highlighting the issues for others.
It's advantageous for me as well....and also, it would save me thousands of dollars in MA motor vehicle excise taxes....if you're aware of it being targeted in IA why would you risk it to save a few grand a year?
 

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Discussion Starter · #5 ·
I'm not in Iowa, Gilly. I'm just sharing additional research, like your MA advice. I haven't seen any issue in my home/neighboring state(s). I'm happy to disclose what they are (metro-DC area). The reason I didn't disclose them in the OP is because I'm interested in others' experiences regardless of state. I hope that clarifies the matter and don't hesitate to point out anything I've missed. Thanks!
 

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Well I know DC has the dreaded Excise tax....much like Mass....don't know the rules there but I have a couple of friends that are MA troopers....I asked about this once and they told me of someone that they pulled over a couple of years ago in a high end exotic....MA driver's license and Montana tags.....After the state got done with him the excise tax was cheap compared to what it cost him in fines and attorney's fees.....Excise tax money stays in the State and for the most part makes up a large part of their transportation budget....they don't take kindly to people trying to circumvent the system....again, best of luck....
 

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Discussion Starter · #7 ·
Thanks Gilly. You remind me to point out that this strategy works best when you're acquiring the car and if you're paying cash. Once the car is financed, very few lenders will permit title transfer to a corporation (they have to offer business lending to consider it). So if you already own your car and have a lien, you'll need to check with your lender. If you own the car outright, then this strategy is still in play. If you're buying and plan to finance, corporate lending is higher than personal lending, so be prepared for a higher rate. It could still make sense depending on the annual tax savings in your circumstance.
 

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Thanks Gilly. You remind me to point out that this strategy works best when you're acquiring the car and if you're paying cash. Once the car is financed, very few lenders will permit title transfer to a corporation (they have to offer business lending to consider it). So if you already own your car and have a lien, you'll need to check with your lender. If you own the car outright, then this strategy is still in play. If you're buying and plan to finance, corporate lending is higher than personal lending, so be prepared for a higher rate. It could still make sense depending on the annual tax savings in your circumstance.
It does make sense but as I said before we won't get into a discussion on if this is right or wrong on a personal level....honestly if you can afford an expensive car you can afford the taxes that go along with it that support the roads you drive on....
 

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I just meant in time and effort expended in doing it. Financially, it makes complete sense. There is no state sales tax on cars in Montana either which is huge.

Honestly, I don't ever see how the police could get involved. I could see your county or state get involved, but unless there is a lot of press in your area, or there is a lot of documented revenue loss there, I doubt they would spend money investigating and pursuing it. As long as you do it all right through a lawyer you should be covered legally. I'm not a lawyer though and probably the last person you should listen to for legal advice though
 

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Discussion Starter · #12 ·
LOL - your insight (not legal advice) is greatly appreciated. From the two law firms with whom I've spoken and are regarded as the experts in this area, the setup time and effort is fairly low. I won't get into details because I don't want to raise any additional ire. In my case I already paid the sales tax.
 

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You're right it really isn't much effort if you do it up front and have time. When you're at the dealership and you want to drive the car off the lot right now, it looks like a lot more work than it is
 

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I have a bunch of Italian exotics reg'd to my Montana LLC....huge savings compared to CA taxes and reg

I don't Montana reg my daily drivers, I keep those CA reg'd just to avoid hassle from the cops

Its not a problem with the exotics as those don't get out more than once or twice a month
 

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I have all of my cars registered to my house in Florida where there is no personal property tax, emissions testing or inspections. I renew everything through the FL DMV's website, every 6 years I have to go down there to get a new drivers license picture. This is another option for you.
 

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Discussion Starter · #18 ·
Thanks guys. TZL - did you use one of the two prominent Montana attorneys to handle the LLC and registration? If so, any feedback? Feel free to PM or post here. FYI, I'm 99% complete, just waiting for tags.
 

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I live in Texas and I had a customer of mine who paid cash for an SLS and hired http://www.mtvehicles.com/vehicles/index (Deerfield) to register his car in MT just to save about 14k in taxes. I'm not sure it's worth it though. If I bought a brand new GT-R, I'd save about 6k in taxes up front but I'm not sure about the annual fees to maintain the LLC.

Also if financing, I know you need a lender who will provide Deerfield with a written statement stating that they're ok with titling the car under the LLC and registering it under the LLC. PenFed said they would do this but the loan would have to be under your personal name.
 
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