The Expert Podcast

…So why are there so many Montana license plates on high-end vehicles You may have seen them. exotic cars Ferrari Lamborghinis Porsches, maybe even expensive motor homes…Driving all over the country with Montana license plates. And the reason why is because the state of Montana allows for…non-residents to use their state to register vehicles. They have you have to create a corporation. But they also have an advantage where their state has no sales tax. And very limited emissions and inspection requirements So if you live in a state that has let's say a 7% sales tax and you buy a $100,000 vehicle. That's $7,000 worth of tax. If you form a Montana corporation…For a few hundred dollars and put it into Montana corporation. You pay no sales tax. Is this legal well…we're not attorneys we're not giving you legal advice but. Technically you can register a vehicle in…Montana. You put a form a corporation The question is. Where's your domicile. Most states have a law. That says if you are a resident of that state let's say you live in Florida. If you live in Florida. Your vehicle that you own and you use is supposed to be registered in your state of residence So unless you have a Montana driver's license, Registering it there breaks Florida law…Again do you want to check this for yourself Don't take our word for it. So what happens if you do this Well ? Depending on where you're driving the vehicle. If you're a full-time RV-er and you're driving all over the country with Montana plates it's probably not going to be a problem. However, if you're driving around Montana I've driving around Florida. With a $300,000 Ferrari with Montana plates. And you get pulled over. You can see your…Florida driver's license. They're going to start asking questions. You may not have broken any traffic laws. But. The DMV and the tax department They're not stupid They know this is the case. Here's an article in Bloomberg national magazine or national newspaper. That says why. Montana plates are all over the place. So it's not like it's a secret. The revenue departments in the states know this, so they pass the word down to law enforcement Hey look if you see a Montana plate out an expensive vehicle. And you have a reason to pull them over or if you have pulled them over, jot down the information. Who's the owner who was driving it. And let us know and they'll do an investigation They'll find out who's who owns the corporation. What name is it in ? where's the insurance. Right. And if they find that you did this for the purposes of tax evasion you can get in trouble. People do get in trouble all the time. They're also changing some of the laws that make this. more difficult. So if the reason you're doing this is to avoid taxes. There are some laws in some states that say if you do anything even if it's a legal thing to do. But the only reason you did it is to avoid taxes Now it becomes illegal…So just because it's technically legal if you're doing it for an illegal reason. That might be a problem So any time that you do something…Too. For the purpose of violating the law. It doesn't matter if technically it's legal you want to be aware of that…So avoiding taxes avoiding emissions avoiding inspection. Those are things you don't want to use some loophole for, for that reason to look if you're doing it for a legitimate purpose for paperwork or documentation or it's the only way to get something done and still follow the law That's a different story. Make sure you get good legal advice Anytime you're doing any of these, what's called loopholes. Right Don't take it upon what you read on the internet or what you read on a blog or what somebody tells you in a web forum, make sure you're getting advice about how you're using a process. Look. There may be, if you pulled 20 Montana registrations or license plates. 10 of them might have been done Legally 10 of them might be illegal And sometimes the people who do it illegally didn't know they were breaking the law. So you want to make sure cause you're the one that's actually doing this. And you want to make sure that you are aware of what the legal responsibilities are For example…Some states have a law that says if you evade taxes, On a vehicle or in California if you evade emission standards…They can seize your vehicle. And impound it and keep it and auction it off. So you don't want to be in that scenario…The other question is insurance. If you get a Montana registration. And a Montana title in a corporation in Montana…You have to buy auto insurance. Well, Your auto insurance policy is kind of have a question. What is your primary garage ? Location. Where's this vehicle primarily. Kept. What are you going to say ? If you say Florida, your insurance company might not let you. Get a Montana insurance policy. If you say Montana. You get the policy. But what happens if you get into an accident in Florida ? With your Florida license…They're going to look at. Where were you primarily using this vehicle ? If you were primarily using it in Florida and you gave false information on your insurance application, they could void your policy and your claim. Which means you're out of luck for getting paid for your damages If you total your car. And…most of these vehicles. The only reason they're doing it in Montana is because they're very high end vehicles You're not doing it on a $5,000 beater from Craigslist. You're doing it on usually a hundred thousand plus 200,000 million dollar motor home…You have a total loss on that with no insurance that's going to take a bite. For out of your finances. So…the Montana license plate. Title thing. Has been around for years. There's even companies that you can pay them to form the corporation put everything in their name. And get you your plates, but just make sure. That you are doing it. Properly and you're using it for a proper reason because that company is just doing what you tell them to do you tell them to form a corporation They'll do it. Right. They're not the ones that are actually breaking the law. If you are trying to evade taxes. You have to make sure you're aware of it and don't take anybody else's word for it. Montana plates could be a benefit if you're again a full-time RV-er. That drives all over the country that doesn't really have a primary residence that may be legitimate. Because you don't have one place that you're using. it, but if you are a resident of a high tax state, let's say New York and you put your motor home or your Ferrari or Lamborghini titled in Montana and you're driving around upstate New York…New York state police are gonna see it. They're not stupid They know that Montana plates are for a reason. And you're not right next door to Montana. So they're going to find out. Why is it. $1 million Ferrari in New York with a Montana plate you probably didn't drive it It's not going to be that comfortable to drive from Montana to New York. You're not on a road trip. To go see Ben and Jerry's and Maine. So when they pull you over and you have a New York license. They're going to ask questions, even if they don't do anything right there on the spot they're going to refer it. To the revenue division And that might cause you problems later. Again make sure you're, even if you're able to do this you're you know why you're doing it and you know, what your purposes are and that they're not even accidentally. Violating any laws ?