Who doesn’t love the great state of Montana, especially when it comes to their tax laws. Well for one California’s Attorney General. As a cautionary tale to those in Florida, the states are getting fed up with losing tax money and they are starting to crack down.
Montana has no sales tax, and as a result those registering new vehicles, such as RV’s and luxury cars are saving thousands of dollars on sales tax. Some ingenious person developed a plan, which now seems a regular pipeline of forming a Montana LLC to purchase their vehicle, thereby passing their local state sales tax laws.
Well California has had enough, and hint, Florida is aware of the scheme as well, so my guess is other states including Florida will follow suit. California’s Attorney General, Rob Bonta, has brought charges against 14 individuals for failing to report over Twenty Million in luxury car sales, with a shortage of almost two million dollars. California has identified over 1500 vehicles registered to Montana LLC’s. They are just starting. This is not a California issue but any state, including Florida, who has a sales tax is being affected. Now you might be saying, well what does it have to do with me? Not my problem with how my clients purchase their vehicles. But it does affect you, we have seen an increase here in Florida of Sales tax audits, in the past few months along, the increase in calls to my office for audits being performed. Even if you haven’t sold to a Montana corporation, our clients are getting violated for overpriced trade-ins, and other legal maneuvering. Sometimes it leads to small violations, others have landed with criminal charges. These are very real, and very close to home.
Bottom line when it comes to Montana, just don’t do it. Don’t recommend it, advise your client’s against it (I don’t care what the Montana lawyer says…..listen to Florida) if you know the vehicle is going to live in Florida most of the time don’t be part of the problem, or at least cover yourself, and have some policies in place to show you are not a part of the scheme.