Our story arc covering the Montana LLC program is extensive. And why not? We believe in the program and our services. But it is also important to delve deeper into some of the nuances of the program. We want our customers not only to be happy with the service they receive but also to help them gain a broader understanding of the processes and regulations.
One item that comes up a lot in Reddit forums and other places is the so-called Montana Luxury Vehicle tax. Well, it isn’t a tax; it’s a fixed rate fee. The Montana Luxury Vehicle Fee is an $825 fee assessed for high-end luxury and exotic cars at the time of registration in Montana. This fee applies to vehicles valued at $150,000 or more at the time of registration.
Today we’re going to walk you through the luxury vehicle fees and also dig into some of the other common questions about tax rates, fees, and why so many fast cars seem to wear Montana plates.
Also, be sure to check out our whole collection of Montana LLC articles here!
Montana Sales Tax Rates
This one is pretty simple: there is no state-level sales tax in the state of Montana, and only two Montana counties have a county-level sales tax – and it’s 5%.
How do they get away with it? Who knows. We aren’t politicians or politically motivated. We just know a good deal when we see one.
It is no surprise, then, that we see so many high-end vehicles wearing Montana license plates. Of course, that would require you to live in Montana, right? No, not exactly.
Why Are So Many Supercars Tagged In Montana?
Well, this is a great question. Why are there so many supercars tagged in Montana?
Consider the ramifications of registering your car in a state with approximately ten percent sales tax rates, which are not all that uncommon. We can name several places in Southern Cali that are around ten percent, for instance.
So, if you buy a brand new F-150 Lightning EV for ninety grand, you’re in the hole for about nine grand in taxes.
How about a car that sells for a lot more? Let’s use a real-world example: this 2022 Ferrari F8 Spider Base listed on Cars.com. The sticker on this car? $544,990. If you are in the LA basin buying a whip like this, you will owe the local public servants around fifty-five grand in sales tax alone. Now, this particular car was in San Antonio. Texas has a sales tax rate of 6.25%, which beats the heck out of ten, but still…the average combined sales tax in Texas is 7.94%.
The sales tax on the ‘Rari listed above will be roughly $43,272.21 – and that’s all for a used base model F8. Ouch.
Get it now? If you are buying a supercar, why not save some serious cash? If a half-million dollar car is in your budget, fifty grand in tax doesn’t bother you, but I’m guessing that no one wants to fork over fifty Gs for tax.
Can I Really Register in Montana with No Sales Taxes?
Yes, you really can register your car in Montana with no sales tax. Or your truck. And your RV, motorcycle, UTV, ATV, and more.
This is something that we can all do even if we’re not buying Ferraris. With that being said, though, there are some requirements that must be met first. Some might call it a catch, a loophole, or what have you. We prefer to see them as the price of admission.
Related Article: Why Is Everyone Registering Their Cars In Montana?
What's The Catch?
The catch is that you must provide proof of residence in Montana.
Now, before you hit Zillow and get sticker shock, hold on for a second.
You don’t have to live in Montana. Unless you want to, of course; it’s a free country. No, all you have to do is provide proof of residence in the state.
This is where the LLC in the program comes in. An LLC, according to Montana law, is sufficient to provide proof of residence to the state to register your vehicles, and proof of residence is all they require to register a car there.
There is an important caveat here. Your residence is not the same as your domicile, which we covered in this article. Your domicile is wherever you spend the majority of your time living. So yes, your domicile can remain in Texas, California, or wherever you want it to be. You will be fine if you have the LLC set up in Montana.
A little bit about the LLC: there are a bunch of different kinds of LLCs, but for your sake, in this instance, you only need to know about asset-holding companies. Asset holding companies, or just holding companies for short, are not meant for revenue generation. Their entire purpose is to hold equipment and assets used in businesses, not for the business itself.
Is It Just For Supercars?
So, is the Montana LLC registration just for the super-rich and their supercars? Not a chance. It’s for the everyman who is bootstrapping a service business and needs to register a fleet of trucks but doesn’t want to lose a tenth of his revenue in sales tax.
It’s for the snowbirds who have worked for decades to retire and don’t want to watch it all spiral down the drain. It’s for everyone. And, of course, it’s for the supercars.
The Montana Luxury Vehicle Fee is just for super or extreme luxury cars and it’s a whopping $825. Let’s be for real now. Montana knows exactly what’s going on. They know who is registering cars there. They know why. They are getting a piece of the pie, and why shouldn’t they? It’s their state, after all. There is no use pretending that Montana doesn’t know how their state is being used because they absolutely do.
The Montana luxury car fee applies to vehicles with retail values at $150,000 and up, so only the most expensive and exotic vehicles are ever hit with this fee.
What's the RV Fee?
Similarly, the RV fee is not for your everyday, run-of-the-mill travel trailer or toy hauler. No, Montana has only imposed a fee of $800 for motorhomes that have a retail value of $300,000 or more. While yes, most RVs are not cheap, motorhomes that exceed $300,000 are not that common.
Considering other states are getting more than thirty grand from these sales, a simple, single $800 fee is paltry.
Is It A Tax or A Fee?
The Montana Luxury Vehicle Tax is actually a fee per Montana HB 650. Does it really make a difference to you, whether it’s a tax or fee? Probably not. But paying out $825 or $800, depending on the vehicle, is certainly an improvement over paying, you know, thirty grand in taxes. But, to answer the question, it is a fee according to state law. The more you know.
The Dirt Legal Advantage
If you have a high-end motorhome or a supercar, chances are high that you aren’t excited about registering it in your home state.
We have done all of the legwork and paperwork for you, so all you need to do is sign on the dotted line; we'll handle the rest. Oh, and the cool thing is once you have the LLC set up and running with your initial vehicle in it, you can always add more with our LLC add-on service!
What We Need From You
We just need a few things from you:
Proof of ownership: To qualify, you must have a Title or MCO (Manufacturer’s Certificate of Origin). This is the documentation we need to show the vehicle is yours.
Checkout: Click Add to Cart and complete the checkout process. You’ll receive an email confirmation with your receipt and order number.
Vehicle information: Fill out the vehicle info form that appears after you checkout. As long as you have the proof of ownership and a Vehicle Identification Number (VIN), we can legalize any vehicle regardless of state.
Documents: Keep an eye on your mailbox. We’ll send you a checklist for the materials we need to handle the conversion on your behalf, including your proof of ownership, copy of ID/social, and notarized power of attorney.
Send it in: Mail everything to us using the pre-paid envelope we’ve provided to make it as easy as possible for you. Congrats, your part’s done! Now simply wait to receive your license plate in the mail! We will email you a tracking number once it's on the way.
What You’ll Get From Us
Montana license plate and registration in 1-2 weeks. If your vehicle is 2011 or older, the plate is permanent, so you never have to renew it. If your vehicle is 2011 or newer, you must renew the plate online each year.This is a rolling date of 11 years or older, so the next it will be a 2012 model year, and so on. Vehicle Title and Registration - Montana Department of Justice
A new proof of ownership – you will receive a new Montana title for your vehicle in the name of your LLC that we will set up on your behalf.
Dedicated agent support to guide you through the process and answer any questions about paperwork, state-to-state transfers, required parts, etc.
Parting Thoughts
To be honest, Montana’s luxury vehicle fee is hardly a deal breaker if you buy a luxury vehicle, especially if you are used to sales tax rates in the ten percent ballpark. Since the threshold is $150,000 for luxury cars, you are looking at an $825 fee instead of a $15,000 tax bill. If you have a motorhome valued at over $300,000, you can pay an $800 fee instead of a $30,000 sales tax bill. It doesn’t seem like there is much to think about here.
Now that you know how Dirt Legal can help, keep in mind that you can add as many vehicles as you want to an existing LLC and you can register a lot more than just cars and motorhomes to an LLC as well. Montana will tag your ATVs, UTVs, and even some off-road military vehicles!
John McCoy is a lifelong car and truck enthusiast and has a strong mechanical background off the road. He spent over 13 years in the U.S. Air Force as a crew chief, assigned to the B-1B Lancer, affectionately known as the Bone to those in the community, and the KC-135R Stratotanker. He resides on a small farm in Eastern Kansas where he (sometimes) enjoys fixing ancient farm equipment.