The Montana License Plate Scam - Lehto's Law Ep. 5.16
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- เผยแพร่เมื่อ 28 ต.ค. 2018
- The Montana license plate scam is back in the news. Does it work? Can you get it trouble for it? These questions and more are answered here.
Here is David's article: jalopnik.com/georgia-is-crack...
And mine: jalopnik.com/the-pitfalls-of-...
www.lehtoslaw.com - ยานยนต์และพาหนะ
A little off topic but I think it is a scam that states get sales tax $ for vehicles every time they are re-sold. The taxes were paid in full when bought new. Sell it and new owner has to pays taxes AGAIN for it. Thats just wrong. And a scam. In my opinion.
Exactly! I've always scratched my head over the fairness of multiple taxation for the same item. A 57 Chevy that originally sold for $2000 and exchanged hands 20 times could generate tens of thousands in taxes over the years. But we all know how to get even, right? When privately buying/selling a car (if the seller agrees) we simply undervalue the vehicle when the state asks what you paid for it. Of course, I would never do that, but I know people who have.
“Let’s not disregard the fact, that sales taxes on used items are utter tyranny.”
-Ed Bolian
A guy walks into a bar.
"Who owns the Great Dane outside?"
"I do", replies someone, "why do you want to know?"
"My Chihuahua just killed it."
"How the hell can a Chihuahua kill a Great Dane?"
"He got stuck in its throat."
The problem is not the Montana License Plate via LLC tax laws and regulations. The problem is burdensome tax laws and regulations of other states.
Same situation about incorporating in Delaware but, never physically existing, or doing business, there.
Anthony Bennett - The funny thing about what you say is that many Insurance Companies incorporate in Delaware for that express purpose of avoiding tax laws.
Insurance agent here. Your points about insurance are valid, but you could get insurance on the car. You would just need to have the LLC buy a commercial auto policy from Montana and list the garaging address as your home address in the other state. It can be done, but it would be more expensive and not all companies would do it.
My agent once jokingly told me that they're in the premium collection business, not the claim paying business.
two lawyers talking to each other...that must have cost a fortune.
Sadly, no. I wish I could have charged him for my time. He was the one who thought he could call me and convince me he was right.
@@stevelehto It's a wonder you both didn't charge the other for phone time! I could see the bills crossing in the mail. LOL.
When a claim occurs you may well have a problem with the garaging address if you did not disclose that. But the registration to a business isn't (shouldn't) be a problem, assuming that the policy is in the name of the business. In my case I purchased a car in my personal name and my business insures it. To create an "insurable interest" in the vehicle, I created a lease between me and the business (my business) leasing it.
PS I am an insurance agent/broker in CA.
So you did it the right way where everything is all above board and clean. Well done.
This wouldn’t be an issue if governmental entities would quit viewing citizens as nothing more than a revenue stream. Next let’s talk about waste, fraud, and abuse due to corrupt people in government running their own tax scams. No one considers the unintended consequences of tax policy and the Montana license work around is a perfect example. In my state people living on the state line can drive 2 miles and buy gas for 60 cents a gallon cheaper. The difference is a tax hike. Are the neighboring states operating a scam? No they are treating their citizens with respect. Are the people buying cheaper gas scofflaws? No they are prudent. Following Georgia’s example my state ought to put revenuers on the state line to determine the intent of people coming in and out of the state. With an iPad and a card reader they could collect taxes due on the spot, We’re told that the exorbitant tax goes to roads. Our roads are still lousy. BTW where are the billion and billions of stimulus dollars that went for shovel ready jobs during the Obama admin. When citizens run out of options to avoid taxes things will get hairy. Of course maybe our government can simply take away all our options to operate in our self-interest.
It was probably already stated but just just in case it wasn’t. It is how I insure my truck. I insure it through my Buisness and the Buisness address is listed as the insured party. I am listed as the only operator. I believe if the cars were insured likewise that would solve any insurance issues.
Excellent video Steve! Case in point: Approximately 12 years ago the townhouse complex management where I was renting in Kentucky gave the names of each occupant to the police that had an out-of-state license plates, without a warrant or permission from the occupants. This Townhouse complex would rent to numerous Cincinnati Red's professional baseball players and Bengal's football players while they were in season. Most if not all of these professional players had license plates from out-of-state. One day, I received a knock on my door from a State Trooper stating that I was committing a crime because I didn't have Kentucky license plates on my car. I politely stated to him, that my job requires me to come here to start work, but I didn't stay here while working and I was not a resident of Kentucky and that I have a house in another state that I go back to every week. He seemed a bit confused, but I went on to further explain that my permanent domicile was not Kentucky and I would actually be committing a crime if I registered my vehicle in Kentucky, despite the fact that registering in Kentucky would actually have been cheaper for me. He wished me a nice day and I never heard from him again. Unfortunately, just as was the case with the the management giving the names voluntarily to the police, most people when confronted with authority will comply whether the request is legal or not.
The insurance policy should be in the name of the LLC.
When my daughter graduated from college, my wife and I bought her a car to use in Vail, CO while she took a year off before going to medical school to enjoy skiing and working as a waitress. Actually, we leased it under our name and lent it to her for a year. (Before any one says that we spoiled our daughter - I now have a daughter who's a freaking doctor! Not someone who's still working as a waitress!)
I told the insurance company exactly what was happening. The owner's were PA residents, the driver had a NJ license, and it was being driven in CO. It took forever to get the paperwork finalized, but everything was spelled out and we were completely covered.
What I'm getting at is that the LLC in MN could insure the car in MN and inform the insurance company in MN that's it's being driven by a principle in MI.
When I worked for a large corporation in the 90's, we were all issued company cars, owned by the corporation. The corporation was in IL, the division was in AZ, and we were in PA. (But there were employees in 48 states with cars.) The car was owned by the HQ in IL, insured by the division in AZ, and registered with PA plates.
Both my personal and employee situations show the various combinations that can be used as far as ownership, driver, and plate location. The MN scam can avoid the "scam" part by being honest and documenting the truth. It's the act of cutting corners and ignoring the detail's that set people up for trouble.
Corporate vehicle insurance is much more expensive than private-use insurance and would negate the savings of the Montana scheme. That corporation you mention almost certainly had an entire fleet department (or outsourced it to a fleet management company) to deal with the additional paperwork to keep everything kosher.
I met someone who registered a car to his Montana LLC, then leased it to himself from the LLC. Not sure if that solves this problem...
Living in Louisiana, their law is anytime you purchase a new car you will pay the sales tax according to what parish you live in. Even if you purchase out of state you still pay your parish sales tax. Ours is freaking 11.0%. I recently purchased a car in Texas and the salesman almost fell out of his chair when he saw our sales tax. A $47000 purchase cost almost $5000 more to the parish. They are ripping people off my friends. A car in Louisiana is taxed every time it’s resold or as they say taxed until it’s smashed. Legal theft is what I call it. Unbelievable.
Taxing every resale is a bullshit move. They do it up here in Washington State too.
the point of the LLC is that YOU don't actually own the car. A company out of MT owns it. Then, you just drive it as it was a company vehicle. The owner of the vehicle is a MT resident...
how did you think it worked? every (almost) state makes you pay taxes on vehicle purchases, regardless of where you physically purchase it... doy! thats the whole point...MT doesn't have sales tax.
I do agree with you though, that a car's sales tax should only be applied once. It's the definition od fleecing your patrons. They funny thing is, you could trade it back and forth a thousand times with some other person and never pay a cent of tax. even if your car was worth a million dollars and the one you traded it for was worth 3 pennies. what kind of logic is that? ...either they are a commodity or they are a currency... it can't be both...bastards.
I was so scared of this, I do the opposite, and I get questioned all the time by the police... I am a Nevada resident, Nevada drivers license, I bounce back and forth to Los Angeles months at a time. So the cars I keep in Los Angeles are registered in California and the ones I keep in Las Vegas are registered in Nevada. Two are super cars, when I get pulled over I get hassled about nevada license and ca plates and I have to turn in my nevada license within 10 days. I keep telling them I am not going to keep surrendering my license every 3 months when I bounce back and forth. I have to have a long and slow conversation saying I live in nevada, vacation in los angeles and I do the right thing by registering the cars where I keep them. The I say, if Brad Pitt goes to New York to film a movie for 6 months, he does not surrender his license. -- by the way, it was an officer one time that told me to say I live in las vegas and vacation in los angeles vs saying I live in both places. - that guy understood
I'm from Poland. I have no idea why I'm now binge watching a channel on US law. Probably because you are a great storyteller. Anyway. Why can't the LLC (that owns the car) buy the insurance in Montana?
My thought exactly...besides, the person breached the protective wall of the LLC by personally buying the insurance. LLC needs to have separate accounts from personal.
Still a scam, if you can afford a supercar, pay your taxes!
They can, but likely it still won't be covered in Michigan if it's garaged in Michigan. The insurance policy usually stipulated the state it's garaged in. The best a person could do would be to title it through the LLC, get apportioned plates in Michigan through the LLC, insure it through the LLC in Michigan, and pay less use taxes that way.
I asked an insurance guy here in Kansas using the Montana LLC background ... He stated as the LLC owner I would need to get the insurance through the LLC company name with my name as the driver and owner of the LLC. . The main difference was insurance plans for company vs private citizen rates and coverage... Needless to say business rates for coverage was significantly higher for roughly same coverage
Greg Schwarz Yup. Welcome to my life. The LLC will have to buy the insurance for the car. It is higher rate than my private rates. But hey .... gotta do it right yo....
I live in Montana and it’s super nice to not have sales tax and no inspections
+ no speed limit
It’s all about the money. Either the person that earned it or the people that want to tax it (steal it).
This is interesting. I live in Montana. Our local tag office has a map of the US and they put a pin on the map showing where out of state people who are registering automobile are from. This map has way more out of state pins than you would reasonably expect based on our country’s population. In fact, the pins for Washington state cover the state and extend into the Pacific Ocean. Lots of LLC’s, apparently.
International trucking companies have been doing this for years. Air Canada, US Air, in fact every airline ....has been doing this for years. Shipping companies like Great Lakes shipping, Container ship companies like EVERGREEN, MAERSK HAPAG LLOYD, MEDITERRANEAN etc , Private Railway Companies etc. have been doing this for years and years....in fact Ocean going shipping Companies hundreds of years ago....were the first ones to think of the idea.
With this they can now put all their assets off shore and pay little or no tax. At the least they will find the country or state that gives licenses, ownership and insurance to them the cheapest.
But.....don’t let the people who actually pay ALL THE TAXES....get away with it.....heavens to Mergatory!
"They have a 'denied' stamp which they wear out frequently"
I'm sitting in front of my computer and I actually laughed out loud.
Steve, you're not only a great attorney but a comedian too.
It might be a problem for a supercar, but for an RV, it seems ideal. RVs are rarely in their own state, in fact, many RVers hardly ever go back to their own state. They winter down south and travel through the northern states and Canada during the summer.
I'm a California insurance agent and I agree with much of this, but you address mainly 1st party property damage as the problem. Even bigger is 3rd party liability. If the owner hits and injures or kills someone driving this LLC owned car, he will not have any coverage to defend him when his LLC is sued without a policy in the LLC's name. That claim will be denied in a heartbeat and likely much more costly than a wrecked car.
The LLC is of course just a shell with a single asset - a now slightly dented - car. It and the driver would likely be sued and the driver facing any legal penalties that the state has for driving without third party cover.
And if the court determines that the intent of the insurance plan was illegal, his personal assets would be subject to seizure. The LLC doesn't provide absolute protection of personal assets.
You can't redefine a word just because you want to. Scam is a well defined word, which means "a dishonest scheme; a fraud." none of which pertains to the Montana license plate situation.
Ha ha ha. Watch the video. I talked about an attorney who advises his clients in Mt that what they are doing in another state is legal. When I asked him if THAT was ok, he then back pedaled and said he never did that. Or are you saying THAT's not a scam?
Any time someone can screw the crooked government out of taxes that are unconstitutional, I'm happy to see it happen.
Can you point out the “unconstitutional” part?
The real problem is that this is a loop hole and the individual owner is an easy target. Meanwhile, corporations do this sort of thing all the time and nobody bothers them. This whole tax situation is a giant scam!
This is legal in Montana so they have no issue. Insurance should be a Montana policy written to the LLC and the driver listed on that policy. Also the LLC could lease the vehicle back to the driver as well. Leasing is a well accepted process and can be done easily and the LLC can charge what ever it wants. $1.00 a month. Now you have an insurable interest although you will need to pay license plate fees for your state. There are legal ways to do this and it's not a scam, it's just following the laws to your benefit.
Many years ago (before the internet) I read somewhere, I seem to think it was an old issue of Car and Driver Magazine, that there is a federal law that says you are allowed you register your vehicle in any state in which you own property, regardless of whether you actually reside there. Unfortunately, I've never been able to FIND this actual law. Perhaps you can. Under that momentary assumption, go to Montana, buy an acre in BFE... now you can register your vehicles there all you want. No LLC required.
Another nice thing about Montana registrations is that any vehicle eleven years or older (cars, trucks) can get a PERMANENT plate... no need to ever pay a registration fee again. This applies automatically to all motorcycles, OHVs, and trailers.
IMO, if states would LOWER THEIR VEHICLE REGISTRATION FEES and some other taxes, they would have fewer of these problems. BUT, too many states think they deserve all your money and will work very hard to take it.
Said like a man who has never been bitten by a chihuahua.
I live in MA & I owned a trucking company based in Vermont. All my vehicles had VT plates & VT titles. My insurance policy was also w/ an agent in VT, listing my VT company as the owner. I had a COMMERICAL policy (which is more $$ than a personal policy). I did have an accident in southern CT & insurance handled it no problem. The difference between me and what Steve is talking about is my policy was in the state that it's registered in & it was a commercial policy not a personal policy. Yes, I was still saving $$ compared 2 registering in my home state but the increased cost in insurance does take a chunk out of the savings
sounds more like Montana is just smarter than other states....
Montana isn't doing anything special. Most states will happily take your registration fee if you aren't resident; eg out of state corp Regardless of where you register, you have the same obligations to your state of residence.
And much more American..but you can be sure the tax heavy state will argue it against you..
BTW some exotic cars are not easily insured..i own 2 ..they are custom made and required self insurance. That means the state wants a Fat cash
( none refundable) bond ..Florida bond is $100k for the first car..
As America goes Socialist quality of life goes down..
Fr
Funny how people will justify fraud.
@@PO-pi5su that's the whole idea of doing what thousands have done before. Obviously this is for people who are going to be RV-ing full time or like some I know who sold their primary residence, bought a RV and wanted to bypass sales tax by becoming a Montana resident via P.O. Box.
Oregon passed a law penalizing you 200 dollars if you buy a car out of state. Nothing like punishing free trade. This state sucks other than the scenery.
Why couldn't the LLC insure the car in the state where it's garaged? Wouldn't it be the same as when I insured my daughter's car when she was in college out of state?
Maybe if Taxes were FAIR people wouldn't do this?
Taxes are inherently *unfair*. They are forced, if you don't comply to giving the government your money for things that you won't benefit from, it's corrupt
I wonder if GA is going to come down on Uhaul who registers their trucks in AZ. Most of their trucks have never been or used in AZ.
if you ever think your insurance company is your friend try making a accident claim when the other party has the same insurance
As a Montana resident and owner of a Mt. LLC, and Mt. C-Corporation, corp tax laws very from state to state. We are winter snowbirds, no problem obtaining "legal" vehicle insurance coverage. Montana has no "zero" sales taxes, so come visit- on us, save some money. By the way, I think everyone over age 65 has paid enough taxes in their lifetime and should be exempt!
Well heres my 2 cents. I live in missoula montana. Its a horrible place. Never visit, never move here. It's just horrible and can't wait to leave. All of Montana is horrible. Please don't move here. Please don't visit.
commercial insurance ive had montana plates before.. its really not complicated to do it legally and comply with all states laws ...
I worked for the Title & Registration Bureau in Montana for 10 years before the powers that be moved it to the capital. The LLC "loophole" was a bane for all of us working in this area (at the state and county levels) as we could see it for what it was. Some tried to get the administration to submit to legislation for a change in the law but it never got far...there is too much revenue for the state and county in it. I mean really, road taxes and they are not even using our roads. Score! And if their home state wanted to go after them for it (or the IRS in a few cases) so be it...not our fault, right? And, the law did not stop at general registration but was also seen in the classic and antique registration (this is where you can title and register for about $32 under certain stipulations). It is a loophole for Montana but a scam for those out of state. There is also the law for non-resident property owners as long as the vehicle is "domiciled" in Montana...but we know that maybe %5 of those registered vehicles were domiciled here. I mean really, who is going to check? Not many below the admin level were in support but now they have new brainwashed lackeys...sad times.
Supposedly, you can also register off road vehicles in Montana with an LLC, and legally drive it anywhere, under the interstate compact. Crazy!
I used to spend a lot of time in NY while my car was still registered in VA. To avoid any issue with the insurance company, i purchased multi state policy priced based on the time break down in each state. The even issued insurance cards for both states.
Calling it a scam is disingenuous. This isn't any more of a scam than having an offshore company.
The scam is that attorneys charge to set this up and tell their clients they won't get busted. Plus, disingenuous doesn't mean what you think it does.
Here in Seattle you may notice that a large number of semi truck trailers are licensed in Maine. It seems corporate America has been taking advantage of interstate tax loopholes for decades.
Those are commercial apportioned plates. Google the word "apportion" and come back to us.
Then just insure it with the llc and file the claim as the llc
Have the LLC obtain the insurance policy for said car... That makes some things simpler. This is the loophole that rental car agencies employ. Compact Rents trailers registered in South Carolina with a permanent registration and license plate, but used throughout the continental US.
As TarrMan just suggested, simply buy insurance in the company name. If the insurance company asks who the primary driver is- tell them it's you. My gawd .... so simple. People drive company cars everyday, sales people drive them across state lines. This is a no-brainer
Mark Osborne my thoughts exactly... duh! 😂
Have you ever compared quotes? Company coverage is usually many, many times the price, and will have it's own specific set of restrictions. I should know, I just been through this with one of my - genuine - company vehicles.
Private individuals get "inventive" with what they tell their insurers. And hence run the risks that this video is correctly pointing out. It simply isn't worth it.
This video brought to you by Guys Who Like to Ruin Everything
So, Mr. Lehto, what if I simply buy auto insurance in the LLC’s name from a Montana agency, and tell the agent I’ll be driving it primarily in MidWestern states?
How is this different from the multi million dollar pleasure yachts and ships that are registered in the Cayman Islands?
Example the yachts owned by Betsy Devos's family that are registered in the Cayman Islands.
You can't drive a multi-million dollar pleasure yacht in Georgia with Montana license plates on it.
@@robertsez Why not?
@@robertsez No but you can sail it in US waters and dock in US ports.
As a resident of Montana I can tell you that we don't pay a sales tax on vehicles however we do pay a property tax based on it's value usually over a period of 10 years.And over a period of time it usually equals or surpasses a sales tax.
No Insurable interest. Unless you have a rental or lease agreement between the vehicle owner and you, your insurance does not have to pay the loss.
That's crazy! Here's some grown up advice: *It's easier to just pay the taxes*. If you end up losing just one hour of sleep over some action, then you've totally negated any financial advantages.
At worst the taxes will be about 10%, and that's here in California. Believe me, if I could afford a million dollar car, I'm not gonna quibble over the $100k in tags and taxes. That's just part of the package. Besides that million $ car is gonna need at least $50k in annual maintenance.
I'm in total agreement. I have a brother in Nevada pulling this crap--so much easier just to follow the law & pay.
If there is a loophole, people will use it. That’s what loopholes are for. Ask trump? The percentage of tax that he pays, is most likely much less then what you pay 💰
I love the way you explain stuff..... Chihuahua barking through a chain linked fence..... 😂
Trucking companies have been doing this for years. How many tractor-trailers have you seen with Maine plates? They take advantage of some favorable law in Maine.
When you purchase a vehicle from a private party in Nevada,, there is no sales tax.
Everybody wants to save money, because most states try to take advantage of the residents. Example: each new owner of a vehicle has to pay sales tax, so if the same vehicle is sold 10 times , the state will collect sales tax on 10 customers.
I've bought a car in Nevada and I registered it there so I could drive it home but when I went to put local plates on it they told me I had to pay sales tax because I just bought it and it looked like I was just trying to avoid taxes, had I hid the car for a year I wouldn't have had to pay tax.
Steve Lehto, so how can U-haul have all their vehicles with license plates from Arizona, while doing business all over USA?
I also would like to hear the answer to this question.
@@jonathanbailey4904 no cap doe I nvr thought ab that but it’s very interesting
U-Haul registers all of its trucks in Arizona because that is where their headquarters is. If you look closely at the plates, you will see that they are “apportioned” plates; this allows them to operate in commercial service across state lines and within Canada under the International Registration Plan.
Its no different than the semi trucks yoy see hauling freight...they are commercial vehicles. You pay a fairly large rate for the authority to operate in different states with a "base plate" from your home state.
There is a service in Montana that is for full time RVr's. It is a physical location that provides a permanent address, a place to call and to be home when not on the road. They get a Montana drivers license, and mail forwarding services as needed when traveling. So everything needed for legal residence is provided allowing the benefits without conflict.
Pretty much same in South Dakota. I think maybe you have to be present 24 hours each year.
I know as close to nothing on this subject as you can get...but (ha ha)...I watch the vinwiki YT channel...on there, Ed explains that the Georgia tax law is written about operating, or maybe just having (storing, etc) a vehicle in Georgia for more than 30 or 60 days?...so, in that case, where your are a legal resident is a mute point and seemingly won't allow you to get around Georgia's taxes????...and BTW, vinwiki is a fantastic YT channel...
He's right and wrong. The smarter people in Cali are leasing their car from their LLC. They might pay more than the typical LLC. Deal but it makes it harder to attack them.
I have actually looked into this many years ago, since I hope to own a supercar some day (after I retire and can enjoy it) and Massachusetts law states that if you garage a vehicle in the state of Massachusetts more than 6 months a year, you must register it in the state of Massachusetts. The only way I could legally pull this off is to physically garage it in Montana on property I own or rent for 6.03 months a year. (I’m the father of the owner of this TH-cam account)
Louisiana courts have upheld the practice here. The test case was about someone buying a half million dollar motorhome through a Montana LLC. The revenue department here went after them, and the state supreme court said it was perfectly legal as far as they were concerned. And obviously you would get a policy in the LLC's name. But I agree with you about the "I'll sue an insurance company..." barking. Insurance companies are essentially immovable objects.
I worked for an insurance company as an adjuster and never really cared about paying out on a "fair" claim. Denying a claim was always a major hassle. Everyone knows claims are just the cost of doing business. Even marginal claims were just passed through for cost, convenience and credibility. Screw people over and you will not only lose customers but the agents will move to the competition.
"working tools"
The insurance company will do just about anything to get out of paying a claim. I got taken down on my motorcycle by a drunk driver who got arrested at the scene. My own insurance company refused to pay out because I must have been at fault for the sole reason that "motorcycles are dangerous." I had to get a lawyer and sue. I did end up winning both my case against the drunk driver's insurance and my own but it didn't pay for the consequences of that accident. I didn't do anything wrong at all and I still had to sue, plus they tried to find anything in my past they could use to discredit me when I was the victim. If your case is even marginal, chances are that they will walk all over you before you even make it to court.
I sued Allstate, represented myself. They refused to pay my first-party claim. I won. It was a small claim, but still . . . .
Does anyone find it infuriating that rich people register their yachts in less expensive states, that corporations register in Delaware because the fees are less, but that people registering their cars in favorable states is ''fraud'' or a ''scam''?
No.
Everything smells good until the crap hits the fan.
A similar thing happens here in Maryland. As a designer/builder I do some of the work myself and also use subcontractors. And I require my subs to supply me with insurance certificates and their MHIC (Maryland Home Improvement License). Like so many states my area near DC has a huge population of undocumented workers coming up to you when they see my trucks. Some are very smart and hand me a business card which sometimes says 'insured.' But they lack an MHIC license. To take the test you must show proof of residency and proof of citizenship.
Since they obtained their insurance under fraudulent conditions, no way in hell will the insurance companies respect the claims. I'm sure the insurance co. will pretend they were victims of fraud as well. And ultimately as the prime contractor the claim would have been filed against the both of us. It's a requirement for contractors to keep up-to-date insurance policies on their subs or be liable for paying their policies, fines, and tax liabilities.
So I see the insurance companies as part of the Ponzie scheme. They are knowingly selling policies they know won't be honored. What do you think?
Most states require you have state tags where the car is garaged and States will consider it fraud if you formed and LLC to evade taxes in the state. Look up RV owners who’ve been found guilty.
Could the LLC itself purchase insurance in Montana on said vehicle and resolve this problem?
I would like to know this also.
Wouldn’t say scam but maybe taking advantage of the system..I’m a trucker and if I wanted to start my own business then starting it in Montana would be smart way to go
But then you would pay Montana property taxes which are high what with no sales tax and all..
This whole LLC scam unravels with insurance and the state you live in wanting their money when the car is kept in a place that isn’t Montana.
The LLC could own the car and the insured could be the leasing the car. Insurance companies insure vehicles where a third party holds a security interest in the vehicle. There are other reasons for the LLC such as liability. Many people own vehicles and hold title through a trust or LLC to protect assets in another trust etc. Yes the Montana LLC is a shady but Georgia is on a slippery slope if supercars and late model RV's become fair game, older cars and even custom cars could be next. Do you trust the DMV to know the difference between a 50k Buick GNX and a retirees $800 Regal?
I've noticed a lot of trailers (all kinds - RVs, tractor trailers) are tagged in Maine. Also boats and airplanes registered in Delaware. Educated guess is tax avoidance in both cases.
Here in Virginia, people do the same thing with Delaware plates.Delaware has no sales tax either,do you see a lot off this.Also,people travel to Delaware for discount liquor.Virginia has state run ABC stores,and the prices are ridiculous.Groups would pool together to travel to Delaware and buy huge amount of liquor and come back with huge amounts of out of state untaxed (in Virginia at least).
Avoiding paying unnecessary taxes is the first rule of business. If you dont like the laws write your congressman
Ive leased cars from GMAC.. They own it... I insure it local as per the insurance, when it asks.. where do you garage it.. I give them my address..and the name and address of the owner.. I pay a a few dollars more.. very few.. and I think they (GMAC) probably register their cars in some state like Montana too...
"As an attorney my job is to be paranoid on your behalf."
I love this sentence so much that I just subscribed to your channel LOL
jalabi99 sadly, mine wasn’t paranoid enough.
Sadly, mine sold out to the other side.
"If they can weasel, weasel they will" Hilarious!
I have made many claims and have never been asked for my registration or anything like that. I also know a few dudes with supercars registered in Montana. (one has a home there too). They very often are having those cars transported all over the place to different events, rallys etc. Not at all uncommon. As for insurance, most rich dudes have fleets of vehicles and a blanket policy with an LLC or even self insure. The bottom line to all of this is that property tax is a scam by the state and is theft.
In our small town in Montana there are two airplane hangers owned by people from out of state. They have nice cars, a plane or two and one has a nice boat in it. My guess is that they are saving on taxes by registering their toys in Montana. Interesting video, thanks!
Can’t the LLC in Montana simply insure the car rather than the “owner?”
As a pet sitter for the better of 10 yrs, the worst bite I ever received was from a Chihuahua. Threw jeans…drew blood…scarred for life. Chalk one up for the little guy;)
In general rule that the smaller the dog the more likely you are to be attacked. Dogs really have a napoleon complex.
Hi! "I have to answer this." I am a Veteran that use to train Military Dogs. If that excuse for a dog tried to bite me. It would end up either the best trained excuse for a dog. Or it would be dead, very dead that is. Kind regards, and greetings from Africa.
I installed cable TV for about a decade. Three bites from two chihuahuas and one from a Jack Russell.
Yeah they will bite.
I live in MT and noticed the last time I bought a vehicle they are asking you to come down to DMV with your ID to "verify" you are indeed a resident now which pissed me off to no end because of Covid. Last thing I want to do is go stand in line there. That being said I'm not a lawyer but plenty of companies own company cars that are LLC's. You can just buy commercial insurance. I have it for my business. In the end if you own the LLC anyway it's pretty dumb the insurance company tries to skirt the liability you paid them to mitigate.
On another semi- but not really related topic... Why is this such an issue, but many legit business establish " headquarters" in a state like North Carolina to avoid union laws and liability issues, and then have business that oporate solely in states outside of North Carolina. It's funny the disparity between what is standard practice in the corporate world and what the average citizen is allowed to do.
I would have thought you'd have to buy insurance in the name of the LLC with yourself nominated as a driver!
California used to charge sales tax for newly registered vehicles that were purchased in states that have no sales tax. They no longer do that and had to return millions of dollars to those they did this to .
Couldn't you just insure through the LLC
Even as a non lawyer it makes sense to me that the car needs to be insured by the entity that owns it, in this case the LLC.
How about a leased car?
@@BrianBoniMakes same.if a LLC is owner of car the insurance must be n its name
The Potentially easiest way to get around the Insurance Problem is to purchase the Police through the LLC - i.e.: The Registered Owner of the Car (the LLC) is the one that buys the Policy through a Montana Insurance Company...
I doubt it'll work well, but it at least theoretically takes the "You're not the Owner of the car, so screw off Argument" out of the Insurance Companies hands...forcing them to use any one of the dozen or so OTHER Arguments/Tactics in their arsenal...
Why would any insurance company allow you to add a vehicle to your policy when you don`t own the vehicle ? { the LLC owns the vehicle and in that case the LLC has to apply for the policy in the LLC`s name . Something is wrong with this story ; anyone else agree ?
Makes no sense to me. I own a construction company in the DMV (DC, MD, VA) and my business is registered in DC. I do work in all 3 states and my vehicles are all registered through my llc. I recently had one of my vehicles vandalized in MD and had no issue with insurance for the claim. The insurance company knows the "LLC" cant physical drive a car so they know the owner of the company or employees will operate the vehicle. its the legal system and filled with loop holes some just find ways to exploit them. I dont see a problem with this..
Your business is in DC your plates are in DC your LLC. and DC . It's legal but put your LLC in Montana with DC plates now you have a problem and your inc. Will have a problem.
Assume you are rated as commercial insured, not personal.
Recommend adding yourself as additional named insured.
Couldn't you just obtain insurance from a Montana insurance agency?
I live in Texas and I have Montana registration on my McLaren 720s through a LLC but I actually use it for dropshipping but I purchased the vehicle through the company
How come you didn't register it in Texas
I’d be curious how it would work out if you set up “Steve’s super car rental LLC” out of Montana. And the LLC “rented” you the car with a rental agreement and the LLC insured the car.
It would be more appropriate for the LLC to have the insurance on the vehicle. Then the LLC would need to have a written policy stating who could drive the vehicle. You would also have to push money through the LLC all the time to pay the insurance. The LLC would then have a tax situation and have to file regularly. The tax man would get much more interested in the cash flow of the LLC. It gets more complicated and attracts much more attention from the tax man, which is what you were trying to avoid in the first place.
Lehto is the kid reminding the substitute teacher they forgot the homework assignment.
What about 80% of publicly traded companies have the same address in Delaware and don’t do business there ? Same principle
The firm's don't have the same address. It's advantageous to incorporate under Deleware law. Firms still have addresses in other states. It's not done to skirt tax.
Wait, isn’t a Delaware corporation a euphemism for scamming the system beating liability laws?
I think in ND, state law say something to the effect that if the vehicle is in the state for 60 days it need to have ND plates on it. Even if the owner is not a permanent resident. Out in oil fields, lot of out of state pickup trucks were getting a ticket for this if I remember correctly.