Re: Montana Tax Loop Hole and the Classic Car Industry

[Redemptionman1]

What is the name of your state? Montana

So, it appears in the classic car industry has been flooding the Montana DMV with a large amount of vehicle titles and registrations. Montana does not charge taxes on vehicles which is very lucrative to the classic car industry since they can purchase tons of highly prized vehicles and register them in Montana and skip out of $10s of thousands if not $100s of thousand dollars in potential tax revenue. All you have to do is possess a valid Montana LLC and you forgo tons of taxes on vehicles which would have to be registered in their home states.

I am just curious as to how long this will be allowed to continue and what is the overall affect on the industry. As some of the prices are artificially inflated when they run the vehicles through an divisional LLC which happens to be located in Montana. I am wondering when Montana might start charging taxes or transfer fees to recovery the revenue they are losing on vehicles which never are in their state and doesn't run on their roads.

 

[Zigner]

What is the name of your state? Montana

So, it appears in the classic car industry has been flooding the Montana DMV with a large amount of vehicle titles and registrations. Montana does not charge taxes on vehicles which is very lucrative to the classic car industry since they can purchase tons of highly prized vehicles and register them in Montana and skip out of $10s of thousands if not $100s of thousand dollars in potential tax revenue. All you have to do is possess a valid Montana LLC and you forgo tons of taxes on vehicles which would have to be registered in their home states.

I am just curious as to how long this will be allowed to continue and what is the overall affect on the industry. As some of the prices are artificially inflated when they run the vehicles through an divisional LLC which happens to be located in Montana. I am wondering when Montana might start charging taxes or transfer fees to recovery the revenue they are losing on vehicles which never are in their state and doesn't run on their roads.

I'm sorry, did you have a legal question? You know this isn't a general discussion forum.

 

[Taxing Matters]

I am just curious as to how long this will be allowed to continue and...

That's political question for which there is no certain answer. The Montana legislature might never change it, or if it does, it's impossible to say how it might change.

....what is the overall affect on the industry.

Who knows what the what the effect on the industry will be when the future isn't known? That too, is not a legal question, but an economic one.

some of the prices are artificially inflated when they run the vehicles through an divisional LLC which happens to be located in Montana.

That strikes me as illogical since anyone can easily set up a LLC in Montana without a great deal of expense. That being the case there isn't really any reason for an antique car to worth significantly more just because it is owned by a Montana LLC.

If I was one of those owners I'd be concerned about the effect on any insurance claim I might might make for damage to my vehicles if I was claiming that the vehicles are actually located in Montana when they aren't. Presumably if the insurer discovers that fact the claim will be denied and I might face insurance fraud charges, too. Moreover, despite the Montana registration, the state law in which the vehicle is actually kept may require registration in that state, in which case should the state discover that it could be very costly.

In their shoes, one of the very first things I'd do is discuss the plan with an attorney in the state in which the car is primarily kept to find out what risks I may run by using this insurance scheme to avoid taxes and fees on my antique cars. For some owners, once they find out what the real risk is, they may decide it's simply better to register in their home state rather than take that risk.