Are you tired of paying astronomical sales tax on your recreational vehicle (RV) or luxury vehicles? Most states have high sales tax rates, which means you’re paying them a pretty penny just to purchase a large ticket item for yourself.
It doesn’t have to be that way. For those who opt to start an LLC and purchase their moveable property, sales tax isn’t an issue. Starting a Limited Liability Company (LLC) in Montana and making purchases under your LLC can help you avoid paying sales tax.
Consider starting an LLC in tax-free Montana to purchase luxury cars, classic cars, RVs, ATVs, motorcycles, trailers, trucks, watercraft, or aircraft. Whether you’re an explorer, rodeo participant, or everyday person who loves the finer things in life, buying a vehicle free of sales tax is simply a smart move.
Several states have especially high state and local sales tax. According to TaxFoundation.org, these states include Louisiana, Tennessee, Arkansas, Washington, and Alabama. For example, some people from California live in counties where sales tax is exceptionally high (as much as 10%). This adds up to a lot of lost money spent on sales tax fees.
Vehicle registration is another expense that can cost you less if you do it through your Montana LLC.
1) How Can a Montana LLC Benefit You?
Our clients choose to start a Montana LLC because it lets them make purchases as an LLC rather than an individual. In other words, you can buy and register a vehicle, boat, or aircraft using Montana’s zero sales tax rates and affordable vehicle registration fees.
How is this possible? A Montana LLC is a resident of the state and can take advantage of all the same benefits as any person living in Montana.
2) There are Many Types of LLCs
Some other states also offer great benefits of owning an LLC:
Delaware has a unique legal system to handle cases against Delaware companies. Depending upon your circumstances, an LLC may be able to save you on state income taxes.
A Wyoming LLC is smart if you own assets that are subject to state income taxes or capital gains taxes. A Registered Agent in Wyoming is required to keep an LLC’s paperwork on file, but state laws do not require an LLC to include the owner’s name or contact information in that paperwork.
New Mexico is friendly to LLC owners in that they do not force a Registered Agent to keep LLC paperwork on file, and the owner’s contact information is not required.
3) How Much Can a Montana LLC Really Save Me?
If you plan to purchase a vehicle, watercraft, or airplane a Montana LLC can help you avoid paying expensive sales tax and use tax. This is accomplished by making your purchase under your LLC’s name. In other words, your company is the legal owner of the vehicle, with you in control of everything owned by your company.
If you live in a state where sales tax is charged (this is the case unfortunately in most states), you’re spending way too much! Montana is sales tax-free, which means that you can purchase large ticket items and not owe any sales tax on your purchases.
No Sales Tax / Use Tax Description
You’ll save even more if you live in a state where sales tax rates are high and property tax is charged on registration fees. In Montana, neither of these is an issue. As a Montana LLC owner, you’ll reap the same tax benefits that a Montana resident does.
For example, if you purchase an RV for $225,000 and you live in California (one of the highest tax states in the country), you could owe up to 10% in sales tax (depending on the county). However, if you purchase the vehicle in California under your Montana LLC, you owe no sales tax. This is a savings of $22,500!
4) What is Use Tax?
You need to be aware of the use of tax rules in your home state so that you know what is needed to be in compliance with the tax law. For example, in many states, there is some limitation—often just for the first year—on how much the vehicle may be driven. To get more information, check out your state’s Department of Revenue/Board of Equalization.
Don’t get the sales tax and use tax confused. These are two different types of taxes.
Learn more about the 5 friendliest states for sales tax:
How Using an LLC Can Benefit You
Getting the ball rolling with starting your LLC can be intimidating. Questions will arise that you don’t know the answers to. That’s where we come in. For example, did you know that you need a Registered Agent to keep your information on file after you start your Montana LLC? This service must be provided by a qualified business with a physical office in Montana.
Several states, in particular, are especially friendly to LLC owners. Their tax laws and requirements make it a very good choice for those looking to save money on vehicle purchases and big-ticket items.
Montana does not charge sales tax for purchases, and they do not charge use tax on vehicle registration fees. Additionally, if your vehicle has Montana plates, you do not have to be concerned with vehicle emissions laws outside of Montana.
Delaware has a dedicated legal system set up to handle any corporate law cases. This allows lawsuits to be settled more quickly. Depending on the organization of your LLC and your particular satiation, an LLC in Delaware may be able to save you on state taxes.
Wyoming does not collect capital gains taxes on assets that are subject to these kinds of taxes. They also do not collect state income tax.
New Mexico is friendly to LLC owners, as they do not require the names and addresses of the owners be kept on file with the state, or in the records of the registered agent. They only require the name and contact information for a contact person (does not have to be someone designated as a member).
You may also have questions about how to go about starting your Montana LLC and filing paperwork, or how to make purchases under your Montana LLC’s name. Once your vehicle, RV, boat, or airplane has been purchased, how do you go about registering it in Montana?
Look for an experienced Registered Agent that can handle the entire process for you from starting your LLC to filing the paperwork and registering your vehicle with the Montana Vehicle Division (MVD).
Benefits of Vehicle Registration with a Montana LLC
Once you purchase a luxury vehicle under your Montana LLC, your company will be listed as the registered owner. Because your business entity resides in Montana, you will get the same benefits that every Montana resident receives such as not paying use tax on vehicle registration fees and not owing sales tax on vehicle purchases.
The MVD requires that paperwork be filed with them for every vehicle registration and title in Montana. Additionally, vehicle registrations 10 years old or newer must be renewed each year. This can be confusing and time-consuming.
Insider’s Tip: Avoid the aggravation and choose a Registered Agent that can fill out this paperwork and file it for you so that the process is completely hands-free.
Other Vehicles that Can Be Registered
Whether you love to cruise the open road in an exotic car or explore the ocean in your yacht, owning a Montana LLC is one of the best money-saving moves you can make. But having this kind of downtime can be quite expensive if you don’t own a Montana LLC. That’s why so many adventurous, fun-loving folks who want to work hard and play hard are starting their own Montana LLC and reaping the enormous tax savings.
First, you can save money by not paying sales tax (some states charge up to 10%!). Next, you can avoid paying property tax on registration fees. These extra costs really do add up for those who don’t own a Montana LLC. Imagine buying an RV and registering it in Montana instead of your home state. You could save tens of thousands by making your purchase through your LLC instead.
Owning an LLC in Montana allows you to save money on registering all types of vehicles including cars, rodeo trailers, boats and watercraft, motorcycles, ATVs, RVs, trucks, and aircraft with the Montana Vehicle Division.
Any questions you have, your Registered Agent Professional should be able answer.
The whole process should actually seem easy when you trust them to handle the paperwork.