Unlocking the Mystery: Renewing Your Vermont Loophole Plate
Download MP3So you have a vehicle that is registered in Vermont but you don't live in Vermont; maybe you use the Vermont loophole, so-called loophole, last year, year before, maybe sometime in the past, and you have your Vermont registration; you have your Vermont license plate; maybe you actually put it on the car and we're driving around in it in your state; you weren't supposed to, but some people do. Now, what do you do? Well, you may have successfully renewed that registration a couple times in the past. Well, now all that's coming to an end. You've probably seen the news if you've been watching our channel and our website. We've been talking about this for years, saying that it's going to happen, but now it has. Here are the important things to remember:.
You see the document on the screen out of state registration certification in concert with other jurisdictions, meaning that other states put pressure on them. The Vermont DMV now evaluates all out-of-state transactions based on your home state laws. To that end, the department will not process these transactions unless the owner of the vehicle can establish a connection to the state of Vermont. Effective immediately, you have to complete this form to process your transactions. What is that transaction? You basically have to get the Department of Motor Vehicles in your home state to sign, certifying that the home state laws do not require them to register the vehicle there. It says, right here:
"Do be completed by the Home State Department of Motor Vehicles or a comparable agency."
Some states call it something else, like PennDOT in Pennsylvania or the Bureau of Motor Vehicles. Either way, whatever government agency issues titles in your state has to sign this:
"By my signature below, I am certifying that the state of whatever your state is does not require residents to register vehicles in their state."
So when you send this form in to renew your registration or get a new registration, the DMV is going to verify this with your state. So what states allow you to register out of state? Almost none. There are a few states that allow dual registration. For example, if you were a snowbird and you went to Florida and had a vehicle that you left in Florida, you could register it there from another state. It doesn't... It's not intended to be used in another Vermont state. So what's going to happen is that when you go to renew your Vermont registration license plate, it's going to get rejected. So, what do you do? That's the big question. What do you do about this?
First of all, if you have a current Vermont registration that's not expired and a license plate, what you can do, which is what you should have done when you first got it, is transfer it to your state to get a title in your state. How does that kind of work? Well, let's go through the instructions and what the details are. We'll also talk about what happens if maybe your registration is expired, and what are you going to do if your state rejects your Vermont registration?
Many of the states that were behind this ban being enacted don't take Vermont registrations anymore. I'm going to zoom in, right? Let me zoom out a little bit here. In concert with other state jurisdictions, that's the key. For many years, other states hated the Vermont loophole because they were losing out on tax revenue registration and all kinds of things. Nobody in other states like this, but they had to do it because Vermont allowed it, so some states were rejecting it. Most recently, the State of Florida put a big note on the door: don't come to us with your Vermont license plate. So you may find that you take your Vermont registration, your Vermont license plate, and bring it to your state to exchange for a title, and they kick you out right. Some states are giving you a little bit of a grace period right now because they know now that they're going to get these vehicles. Some states are out of spite, saying no way.
But what you should do first, and I'll give you the details and instructions. You can also check out our website, cartitles.com. We have a whole section on this, and we give you instructions on how to do it yourself. We also have a service, so if you'd like assistance with this, we can help with that too. Okay, so the first thing you want to do is get a title application for your state and an assignment form to assign that registration from Vermont to you and your state. You apply to your state to get a new title using your Vermont registration as proof of ownership; switch it over, and you're good to go.
One of the problems that may come up is if you have used your Vermont registration for more than one year. If the date on your Vermont registration is longer than 12 months from now, you might have to pay tax again. If you paid sales tax in Vermont, you might have to pay it again to your state, and it gets worse. Most states will charge you tax on your bill of sale, whatever you say you paid for, but see, here's the problem: now you're bringing them a Vermont registration, which is your proof of ownership. That Vermont registration is now going to have a value on it because Vermont doesn't use a bill of sale; they use book value, so when your state sees that registration, you need to give it to them because that's your proof of ownership. If you don't give a mat, you have no proof of ownership. We'll talk about another way to do it that might not have the same problem.
But now you bring them the registration and it says Book value ten thousand dollars you only paid a thousand for on your bill of sale right so if you had switched it over before you can go buy your bill of sale but now it's been more than a year they're going to reassess it they're going to go by the ten thousand dollars on the Vermont thing boom six seven hundred dollars in taxes you already paid that to Vermont now you got to pay it again but that's what you might have to do what's another option well you can actually not use your Vermont registration as your proof of ownership and you could just do a bonded title. 42 out of 50 states allow for a surety bond title which means you don't have to use your Vermont registration you can just go straight to a bonded title in your state that would be Plan B if you don't want to use your Vermont registration or if it's expired if you let your Vermont registration expire your state probably won't accept it as ownership they might they might sometimes they still use it expired documents you can try but if for some reason that fails you can do a bonded title and I know what you're thinking I don't want to do a bonded title well first of all look at the reasons you don't want to do a bonded title if it's because you think you have to pay 1.5 times the value of the vehicle then then think again because a lot of people have the misconception that when you get a bonded title you have to pay one and a half times the value of the vehicle to the state that's not how it works if you have a vehicle let's say that's six thousand dollars 1.5 times 6 000 is nine thousand dollars people think I gotta pay nine thousand that's not how it works you have to get a surety bond in the amount of nine thousand but that's only going to probably cost you 100 bucks Surety bonds for vehicles that are 10 000 or less usually cost 100 bucks and you can check out our website probonds.com for some ideas on valuation so that's Plan B another option you can do is what's called a magistrate title or a court order title it's not a big deal don't get scared about court order don't get scared about um you know court process it's not like Law and Order you don't have to go for some big court case all you're doing is you're presenting your story to have a magistrate Clerk or a court clerk or a judge signed to say you are the owner you file a petition with the county you file a an Affidavit of how you got the car just like you would tell anybody the story I got the car I bought it on Craigslist I paid a thousand dollars for it the guy gave me a bill of sale you take that story you put it on an affidavit you attach it to a petition you also include what's called a letter of not interest that says I don't know of anybody else looking for this vehicle right no one's trying to get it no one claims it like I'm not aware of any other claims against it you put the right package together you submit it to the court clerk normally all they do is they look at it they read it they'll probably do some background checking on the vehicle to make sure it's not stolen no liens and they sign that petition and now you take that petition that says legally you are the owner slap it on the counter at DMV and you get a title now remember we're not attorneys we're not giving you legal advice there are three thousand six hundred and eleven different counties in the country they all operate a little different our website will give you instructions on how to do this as always we also have assistance if you want us to help with this we can help with the paperwork but either way that's plan C the first thing to remember is hope is not lost just because you're a Vermont registration is expiring and you cannot renew it you have these options that you can do now you may not want to do any any of them you I just want to sell the vehicle and dump it that's fine you could do that too but you have options in hindsight you might say well gee I wish I switched it over sooner water under the bridge you already did what you did it's not the end of the world and you made a decision at the time maybe that was the best decision to make but now that's not available Vermont will not renew registrations for out of state residents going forward at some point we're still getting some feedback that maybe there's some still slipping through but you know Vermont has been inundated with some flooding a lot of their DMVs were shut down for a while so maybe some things were held up and they went through so the bottom line is that if you get rejected for a renewal which you probably will those are your options just transfer it over to your state make sure you do it before it expires so if you're going to try to get the Vermont renewal do that soon like or do that two or three months before it expires don't wait till last minute because if it expires now you bring it to your state they might reject it if that does not work which it may or may not you have bonded title you have court order title magistrate title you can do those things keep in mind that even if you could switch it over you might not really like the tax implications you don't want to do tax evasion you don't want to try to scam out of taxes but if you are presenting as your proof of ownership the Vermont registration it now establishes the value at whatever Vermont said which may not be required under the law of your estate your state might say Bill a sale is allowable you have a bill sale for a thousand bucks that's your value right so if you try to use that Vermont registration as your proof of ownership the Vermont registration might say nine thousand two hundred and fifty dollars is the value because that's what they put on it now they have to use that value so be careful about what you're using you don't want to overpay taxes you want to pay the fair right amount of taxes you don't want to do tax evasion or get any kind of trouble for that but if you present something like the Vermont registration that you've been using for three years first of all you might have to pay the higher taxes second of all your state might say you're going to pay a fine because you use this vehicle in the state for three years we see you got this registration in 2020 it's 2023 we're going to charge you three years worth of late fees for not switching it over right away see where that's going so be careful about doing that and find out the laws in your state every State's different regardless for any of those methods if you do decide you want assistance our website will give you free help for do-it-yourselfers if you want to be a do-it-yourselfer we have free instructions we have videos we have all kind of details if you want assistance we have some very efficient ways to do that where you know we'll prepare documents for you for multiple ways you can try to switch it over if that doesn't work we'll give you the documents for bonded if that doesn't work we have an option for court order so we'll help you all the way through the process whatever you want to do because we know it's bureaucratic we know how hard it is to get titles we know what kind of difficulty it is we like to try to help people with the DMV and we'd like to help the DMV you know the DMV doesn't want you coming in with all kind of paper scattered handwritten they can't read they want more neat clean orderly processes so we help you make it easier for you and we make it easier for the DMV a lot of times we talk to DMB employees and and Executives and they like the fact that somebody is helping make it more streamlined for the consumer not all of them but you know we we talked to some of them on a regular basis working on files for our clients so if you have other questions feel free to email our help desk help car titles.com is the email if you have comments put them below let us know what's happening with your Vermont registration if you're running into a roadblock which you probably will it's the end of an era gravy trains over party's over for Vermont so now you have to do something maybe a little different it will make it easy for you.
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