Registration Solution

[Aloha818]

Thanks guys for your comments!

My insurance situation is even more complicated. My residence is Tennessee, I'm working in Hawaii, and the car is registered in Montana!

I have cars both in Hawaii and Tennessee, each insured by their respective local State Farm agency's. Since the 818 is owned by a company in Montana, it will be insured through another insurance company.

I have quote requests underway.

Other Factory Five buyers should look into the Montana option, even if they eventually register the car in their home state. The advantages would be that the cost to set up the LLC is around the average cost of just the taxes you would have to pay in your home state. (Sales taxes in Montana are ZERO!!) You could even buy the kit in the name of the LLC, build it, and then sell to yourself after your done. I didn't have any issue at all with assigning the MCO over to the LLC, FYI.

This way you could skip all the receipt keeping, build it the way you want, and not have to deal with the whim of the local inspector. And probably not have to worry about limitations if you live in a state that only allows so many kit car registrations a year. Your car could be registered before your even done, then by the time your ready to drive it you would just walk into your local DMV and register it in your own name, as you would have a title for it already.

Of course everyone needs to look into their respective states rules, but this does open up opportunities.

I wish I would of thought about it earlier, had I known, but I should have set up the LLC in the beginning to buy and build the car. And then enjoyed all the tax benefits throuout the build. What a shame if I couldn't sell the car for what I put into it!

[ram_g]

Interesting concept...reminds me of the maritime "flag of convenience" practice that merchant ships have been doing for decades...i.e. registering in Panama or Liberia because it's cheaper to do so than register in their true home country.

[Ray]

Most States have in place methods and laws designed to catch-locate-etc. persons that attempt to evade and/or avoid paying vehicle registration fees. I know that California has some extremely efficient investigators, including every CHP Officer and is very effective in eventually catching up to registration violators. California even has a section on the CHP web page for people to report violations: https://www.chp.ca.gov/notify-chp/ch...ion-violators) The fees and penalties are quite high (IE: expensive) usually amounting to 5-or more years of back registration fees as well as penalties. You may get away with it for a while, maybe a long while but not forever. You might want to read through this: https://oag.ca.gov/news/press-releas...stration-fraud before you make your decision.

It's your choice and I would advise you to take only the amount of risk you can afford.

Ray

[Aloha818]

Most States have in place methods and laws designed to catch-locate-etc. persons that attempt to evade and/or avoid paying vehicle registration fees. I know that California has some extremely efficient investigators, including every CHP Officer and is very effective in eventually catching up to registration violators. California even has a section on the CHP web page for people to report violations (https://www.chp.ca.gov/notify-chp/ch...violators))The fees and penalties are quite high (IE: expensive) usually amounting to 5-or more years of back registration fees as well as penalties. You may get away with it for a while, maybe a long while but not forever. You might want to read through this: https://oag.ca.gov/news/press-releas...stration-fraud before you make your decision.

It's your choice and I would advise you to take only the amount of risk you can afford.

Ray

Ray thanks for taking the time to comment. Your first link does not work. I read the info on the second link.

Your example is completely different. And I mean completely different. People in two different states were committing outright fraud with intent to evade taxes illegally. And when I say fraud, I mean they were lying on government forms. A big no no.

I'm sure you watch tv and have seen commercials by various states advertising to move your business there? NY comes to mind. If you move your business there, hire so many employees, and spend so much on improvements, no taxes for 10 years. States compete against each other for business. I'm sure Montana sees a value in not having a sales tax for example. It probably brings business there along with employment.

It's prudent to research the laws and find savings and advantages within the system. I own 3 different companies, they are all registered in different states. As different states have different advantages in different areas.

In my project I hired an attorney in Montana to set up the LLC. I sold my 818 to the LLC. Since Montana does not have sales tax there is not even a space on the registration forms to put a purchase amount. Then the LLC gives me a document giving me the right to show/drive the car. No fraud required, and work performed by an attorney.

Since this is my first kit car build, what typically happens when a kit builder is tired of his car, and sells it? If he has gone through the pains of registration he would have a title in hand to give the buyer. Does this new buyer have to go through all inspections (maybe smog and safety if required in that state), provide receipts, etc? Or is it similar to any other car purchase and registration?

[Jeff Kleiner]

...what typically happens when a kit builder is tired of his car, and sells it? If he has gone through the pains of registration he would have a title in hand to give the buyer. Does this new buyer have to go through all inspections (maybe smog and safety if required in that state), provide receipts, etc?...

In some states yes, a vehicle in from out of state it must go through emissions and safety inspections prior to being registered in it's new home state. In those cases it applies to all vehicles not just kits or home builts.

Jeff

[Oppenheimer]

In some states yes, a vehicle in from out of state it must go through emissions and safety inspections prior to being registered in it's new home state. In those cases it applies to all vehicles not just kits or home builts.

Jeff

...but that safety inspection is often only checking for stuff lights working, e brake works, horn works, etc. They also look for obvious stuff like rusted through body, un-repaired collision damage, etc. Maybe they would notice if you didn't have wipers. Also involves an emissions inspection, based on the cars year. But its nothing like a kit car inspection, or a salvage re-title inspection, or anything like that.

In my state, CT, the emissions inspection is they hook up to the OBD port, and a computer decides if its smog legal. They also do a visual inspection for the presence of the cat.

If its possible for the Montana reg to show a year that predates OBD, that could theoretically make later switching the reg to another state easier. Otherwise, if you have a cat, and an OBD port, you would probably be OK.