Other States Sniping at Montana’s Magic Bullet

"Legal Files” has written several times about various techniques that collectors employ to avoid paying sales/use taxes on their collector cars. It’s a big deal, as the sales/use tax rates are typically 6% to 10% of the purchase price of the car.

One of the common techniques, which our office uses with many of our clients, is to form a Montana LLC (limited liability company) to serve as the owner of the collector cars. Under Montana law, a business entity formed in Montana can title and register its vehicles in Montana no matter where they might be located. The titling and registration fees are minimal, and Montana does not have a sales tax.

Think of the Montana LLC as Step One in the process — it gives you a valid title and license plates, which is useful when it comes to selling the car later and easily transferring title. If that is all you are looking for, then there is nothing else to worry about, and this approach works perfectly well.