The Montana License Plate Scam - Lehto's Law Ep. 5.16
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- Опубликовано: 26 сен 2024
- 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/g...
And mine: jalopnik.com/t...
www.lehtoslaw.com
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.
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."
“Let’s not disregard the fact, that sales taxes on used items are utter tyranny.”
-Ed Bolian
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.
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.
My agent once jokingly told me that they're in the premium collection business, not the claim paying business.
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.
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?
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.
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.
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.
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.
The insurance policy should be in the name of the LLC.
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.
It’s all about the money. Either the person that earned it or the people that want to tax it (steal it).
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...
I live in Montana and it’s super nice to not have sales tax and no inspections
+ no speed limit
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.
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....
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?
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!
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
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.
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.
Said like a man who has never been bitten by a chihuahua.
if you ever think your insurance company is your friend try making a accident claim when the other party has the same insurance
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.
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.
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.
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.
"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.
This video brought to you by Guys Who Like to Ruin Everything
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.
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.
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
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.
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.
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.
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.
Supposedly, you can also register off road vehicles in Montana with an LLC, and legally drive it anywhere, under the interstate compact. Crazy!
Could the LLC itself purchase insurance in Montana on said vehicle and resolve this problem?
I would like to know this also.
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.
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?
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.
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.
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!
it's not a scam, it's a loophole, a legal loophole.
The attorney charging for something and telling the clients that it is perfectly OK in both states - that seems to me to be a scam. It's certainly not a "loophole."
Steve Lehto I think I see what your saying. So the attorneys in Montana are scamming the individual by offering them a service that they cannot fully guarantee outside their state because they are only licensed to practice law in the state of Montana. But if two attorneys from both Montana and whatever state that individual resides both agree that it is legal than it wouldn’t be a scam because that individual isn’t being deceived. By definition scam is a dishonest scheme; a fraud. No one is being dishonest and fraud is not being committed since the lawyers from both state examined the laws of their respective states and came to the conclusion that no laws are being broken. Obviously this is only a hypothetical but would that be correct?
Yes, and when you change the facts of the hypothetical, it does not make my original premise wrong. And it's never that the attorneys say it is righteous - they say you may be able to get away with it. Because from what I've seen, some states are cracking down on this. And the folks who did not get the advice from their home state attorney are now wishing they had.
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.
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.
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.
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?
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
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.
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"
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 💰
Everything smells good until the crap hits the fan.
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.
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...
Montana got it right, no taxes! Taxes should be illegal, it's a form of slavery especially when it comes to property taxes. I don't care how wealthy a person is, it's their money that he/she earned and they should be able to keep it or spend it how they want and not be forced to pay inflated taxes. There's nothing wrong with protecting your own money.....
daredevil7442 FINE, but do not drive your car on ANY ROAD THAT YOU HAVE NOT OAID TAXES TO BUILD OR MAINTAIN.
That means you can only keep your car on your own property and you can NEVER DRIVE IT ANYWHERE ELSE.
I, as a tax paying citizen, should not have MY TAXES USED TO BUILD OR MAINTAIN ROADS THAT FREELOADERS LIKE YOU CAN USE FOR FREE.
Ado you UNDERSTAND NOW.
That should also apply to schools, police and fire services and ANY OTHER SERVICE THAT IS SUPPORTED BY TAXES.
If you choose NOT TO PAY TAXES THEN YOU ARE ON YOUR OWN.
You will be able to sit in that shiny new car in your garage 24 hrs a day BUT YOU WILL NEVER BE ABLE TO DRIVE ANYWHERE.
Of course if you do not pay your taxes you will have no home.
@@brit1066 Government shouldn't be doing any of the things you mention in your post. It's not needed. Good ideas don't require extortion (aka taxes).
Couldn't you just obtain insurance from a Montana insurance agency?
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.
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.
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.
Avoiding paying unnecessary taxes is the first rule of business. If you dont like the laws write your congressman
Anything the poor or working class do to save themselves money is a "scam", but the state or corporation is able to take advantage of any loophole and it's called either "the law" or "just business."
It's actually used by the rich in Republican-run states to get their corporate and income tax cuts and then escape the regressive taxes states like Georgia use to 'ad valorem' and fee the regular people while supercar buyers can shelter miliions on their Lambos. (And if you live in this state you have to pay tax on any car you bring in within a few months even if it's an econobox. They oppose regular taxes but will make damn sure you can't register your Ford Escort to get to work unless you pony up. Rich people could arrange this, but to everyone else it's an unregistered car even if you could work a Montana dodge.)
Poor people can't do this and hope they aren't driving their McLaren enough to get pulled over about it.
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..
I have a question, if it is fraud and illegal how do transportation companies get away with this? North of 75% of commercial trailers are registered in Indiana for tax purposes. Just curious
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.
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 am a full time rv’er and find your term scams interesting. We cannot legally. Belong to any state So technically we have to cheat the system. We must pick a state to establish a residency. Believe me we don’t pick Michigan. Dennis
No one said you belong to a state.
Thats entirely different. You are registered with your home or "domicile" state. You are free to travel anywhere...
The scam is registering the super car/rv in Montana (Montana plates to avoid the taxes) yet you live in and are licensed in another state.
If your drivers license and home address matched the vehicles plates, would likely not be an issue.
Then just insure it with the llc and file the claim as the llc
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.
Companies register vehicles out of other states all the time. Some of the issues you highlight of course can come to be problematic.
Just because a state tries to bully someone into paying them tax doesn't mean it is valid.
Can’t the LLC in Montana simply insure the car rather than the “owner?”
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 .
I investigated the Montana LLC registration scheme several times with several different car purchases over the years. I could get past the potential prospect of the State of Michigan seeking me out for dodging a tax...(just pay up the tax and move on)... what I couldn't get around was the insurance issues.
My insurance agent, in every instance told me...if I am a licensed Michigan driver, and driving the car for general use in Michigan, I need to have it insured in Michigan if it is going to be here longer than "x" amount of days for general usage (I believe it was between 30 and 90 days). Otherwise, I would be in violation of the policy if they were able to prove that it was my intended use, to drive in Michigan. I was told I would need a Montana insurance policy to cover the car. The catch: no insurance company is going to issue me a Montana insurance policy if me, the driver, does not have a residence in Montana (I checked...a P.O. Box address of a law firm or managing agent for the LLC doesnt count for insurance policy underwriting). The other catch: If by chance, I had a Montana residence, and they issued me a policy from Montana, they could deny my claim if they could prove that my intent was to use it in another state entirely, which it would have been.
Basically, if you have a claim, you can easily be caught with your pants down on a cold windy day. It wasnt worth the risk...especially since I was tempting trouble two-fold with the state of Michigan, as well as denial of my covered asset during a claim.
Great video Steve... good info shared!
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.
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?
God forbid one of us commoners wants to afford a dream car by "weaseling" out of a few tax dollars like "real" LLCs do consistently! But those guys' lawyers tell them how to insure properly too. But if you get free legal advise, similar to using public defendants, you get told just not to try.... ;)
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.
Couldn't you just insure through the LLC
I sued Allstate, represented myself. They refused to pay my first-party claim. I won. It was a small claim, but still . . . .
99.99% of people who say "I'll sue their asses" fall under 1 of 3 categories...
1) Don't have a case
2) Don't have the money to hire and attorney
3) Both 1 & 2 above)
Nunya Biznis except in this case where the govt is targeting rich people who have high end lawyers.
I love the way you explain stuff..... Chihuahua barking through a chain linked fence..... 😂
"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.
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).
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.
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!
Couldn't I get insurance on the vehicle as owned by an LLC? That would take care of it.
Thats why Steve suggested actually telling the insurance company your plans.. most likely you would get told no.
Wait, isn’t a Delaware corporation a euphemism for scamming the system beating liability laws?
Steve the only problem is nobody buys a super car under an llc then insures it personally
If this is scam then taxing already taxed car is scam too.
But the car wasn't taxed in MT. That's why they do it.
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.
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 ?
People should always take every advantage of every loophole to bypass government thievery. The only purpose for attorneys and accountants is not to tell people what the law is, but to help them get around it. If an attorney or accountant can't do that, then by definition, they are just overhead.
Sounds more like a loophole than a scam
It's a loophole that can end up looped around your neck or wallet, which is a reasonable definition of a scam to me.