As many of you know, Matthew Weiss, owner of Weiss & Associates, PC, is always looking out for his clients. Since 1991, he and his traffic ticket law firm have helped 100,000+ navigate New York’s vehicle and traffic law saving them points, fines, surcharges, fees, and insurance hikes.
With this in mind, the firm has identified a loophole that may allow you to save sales tax when buying a car. This loophole will allow you to save fees for registration and annual inspections.
The loophole: A Montana LLC. In most cases, New York “transfer laws” will not apply to you, and you’ll be able to legally save sales tax, registration fees, annual inspections, and other onerous rules. To qualify, you must purchase the vehicle in the name of a Montana LLC. Vehicles that qualify for this loophole must be paid off, they cannot be financed.
For example, if you buy a brand new Tesla Model S for $72,990, your total LLC formation and registration cost will be $997, instead of $6,218.75 in New York sales tax alone (add about $203.50 for registration fees, county use tax, plate fees, title fees, and possibly a Metropolitan Commuter Transportation District fee). The more expensive the vehicle, the more the savings. Many uber-wealthy have been doing this for years to save on their Ferrari purchases.
So how does it work?
You need a Montana LLC to gain residency in Montana, then you purchase your new vehicle in the name of your Montana LLC and get it registered at the Montana DMV. Because the vehicle owner is a Montana LLC, you are not subject to many New York rules and fees. There is an annual fee but this “Montana maneuver” is often less costly than the New York alternative.
For insurance, you would simply get an auto policy with your New York home address like normal, with your LLC named as an additional insured.
Another benefit of this structure is that you insulate yourself from liability for persons who borrow your vehicle and get into an accident. In New York, the owner is passively responsible for the negligence of his or her permissive operators. However, if the car is owned by a Montana LLC, then the LLC (not you) is liable for that passive negligence.
If you do not want to learn all the legalese, we recommend Dirt Legal. They can handle all of the paperwork, setting up an LLC, and can deal with the DMV on your behalf.
To find out more, check out all the details at our partner Dirt Legal’s website here.
Important Note: Weiss & Associates, PC makes no money from using Dirt Legal and has no interest in the ownership of this company.
