FormaCars

Visit our community sponsor

Thanks Thanks:  0
Likes Likes:  0
Results 1 to 36 of 36

Thread: Registration Solution

  1. #1
    Senior Member Aloha818's Avatar
    Join Date
    Jul 2013
    Location
    Waikiki
    Posts
    544
    Post Thanks / Like

    Registration Solution

    I tried to register my 818 in Hawaii, but after several visits to Recon (a division of the local DMV) I was finally told that Hawaii does not have a provision in their law to register a car that is not NTSB certified unless it is a car manufactured before 1968 or resembles/replicates a car made before 1968. A Cobra is fine, an 818 is not, as an example the officer used. As you can imagine I was disappointed and frustrated with myself that I had not done research on this before I made the purchase. So my 818 has sat in the garage since the first of January.

    Finally I decided I had to find a way or sell it.

    After unsuccessful conversations with well meaning people that said they could help, I found the winning answer through my brother.

    As he is an avid camper he mentioned that Montana has a cottage industry of sorts setting up LLC's in which to purchase and register motor homes. Montana has no sales tax, so several businesses have been built around setting up LLC's in Montana and having the LLC's purchase and register motor homes/campers there to save tax dollars. Totally legal as the LLC's residence is Montana.

    I was able to register my 818 there today through my newly set up LLC. Plates are in FedEx hands to be delivered tomorrow.

    The benefits;

    1) No sales tax
    2) No receipts or proof of purchase of any components at all
    3) No state inspection of any kind
    4) No facing, organizing, scheduling or having to talk to any government agency/employee at all
    (Worth twice the cost alone!)
    5) No time off work
    6) No planning your build around passing inspections
    7) No time wasted building one way for inspections, then time to revert back to what you want
    8) No anxiety during your build to have to deal with all the government crap and knowing it will be
    Registered
    9) Maybe less cost overall
    10) The car is registered as a "2013 Factory Five 818S", the Vin is the one from FFR
    11) The whole process can be accomplished in 4 days, from first email to plates in hand.
    12) The 818 can be registered before your complete, plates in hand even for go cart stage

    The Con's (maybe);

    1) It cost me $1085 to set up the LLC so that the 818's ownership's state of residency is Montana
    2) It cost me $358 for the registration and FedEx Saturday overnight delivery
    3) It cost me $31 for Fedex to send the documents to the Attorney.
    4) It cost me dinner to have a friend (badged officer, in my case a security guard) fill out the Vin ID form
    5) The car will be registered in a foreign state
    6) Insurance may be higher, don't know yet
    7) You don't get to stand in line at the DMV and meet/talk to interesting people and government employees

    Most 818 builders experience with registering their cars I've read on this forum are like horror stories. So much time, energy, and anxiety for a hobby is crazy!

    I'm sure that in other states (probably not Hawaii), that once the 818 is legally registered in Montana, you can then register it in your own state easier without some of the crazy inspections/requirements.

    I highly encourage this solution. Very easy, less time, and maybe less money. Plus, if enough people register out of state maybe those states will learn they are loosing revenue by making it so hard to register hobby cars.

    Vote with you wallet!
    "In wine there is wisdom, in beer there is strength, in water there is bacteria."

    818 (Chassis #34) Delivered 9/25/2013, First start 3/2/2014, First drive 4/5/2014, Registered 8/28/2015, First Dyno 3/18/2016, First SCCA event 4/3/2016, First car show HIN Honolulu 4/23/2016

  2. #2
    Senior Member matteo92065's Avatar
    Join Date
    Feb 2014
    Location
    Ramona, CA
    Posts
    417
    Post Thanks / Like
    Congrats!
    Remember post #898 from your build thread? Try to keep this Montana thing our little secret.
    And, if you thought it worked well on your car, you should see it work on a CRF450R!

  3. #3
    Senior Member Buzz Skyline's Avatar
    Join Date
    May 2013
    Location
    Greenbelt, MD
    Posts
    502
    Post Thanks / Like
    OMG, that is clever! Maryland is a breeze for 818 registration, but I hope this helps lots of people in other states.

    Congratulations!

  4. #4
    Moonlight Performance
    Hindsight's Avatar
    Join Date
    May 2014
    Location
    Atlanta
    Posts
    3,402
    Post Thanks / Like
    Congratulations! Thanks for sharing this. That sounds like a great option.

  5. #5
    Junior Member
    Join Date
    Sep 2013
    Location
    Kitchener, ON
    Posts
    22
    Post Thanks / Like
    Once you get your plates are you going to do some donuts outside the Hawaii DMV?

  6. #6
    Senior Member edwardb's Avatar
    Join Date
    Feb 2011
    Location
    Lake Orion, Michigan
    Posts
    10,547
    Post Thanks / Like
    I am aware of other people who have done this same thing. I'll leave it at that. Google the subject, and you'll find lots of information and lots of opinions. Legal and otherwise. Bottom line for me personally? I wouldn't be posting about it in a public forum.
    Build 1: Mk3 Roadster #5125. Sold 11/08/2014. Build 2: Mk4 Roadster #7750. Sold 04/10/2017. Build Thread
    Build 3: Mk4 Roadster 20th Anniversary #8674. Sold 09/07/2020. Build Thread and Video. Build 4: Gen 3 Type 65 Coupe #59. Gen 3 Coyote. Legal 03/04/2020. Build Thread and Video
    Build 5: 35 Hot Rod Truck #138. LS3 and 4L65E auto. Rcvd 01/05/2021. Legal 04/20/2023. Build Thread. Sold 11/9/2023.

  7. #7
    Not a waxer Jeff Kleiner's Avatar
    Join Date
    Feb 2011
    Location
    Bloomington, Indiana
    Posts
    8,003
    Post Thanks / Like
    I could see insurance being a stumbling block. You are either trying to insure a vehicle in the state that it is registered but in which you do not reside or trying to insure a vehicle that is registered out of state in the state in which you reside. Let us know how it works out for you and good luck!

    Jeff

  8. #8
    PLATNUM Supporting Member
    wallace18's Avatar
    Join Date
    Apr 2012
    Location
    Trenton, Florida
    Posts
    5,381
    Post Thanks / Like
    So glad you found a way. Congrats.

  9. #9
    Senior Member 6t8dart's Avatar
    Join Date
    Apr 2015
    Location
    Irving, TX
    Posts
    545
    Post Thanks / Like
    Another issue...most states require that vehicles from another state be registered in that state within so many days of moving there. Will Hawaii allow you to register it after having Montana plates?

  10. #10
    Senior Member 6t8dart's Avatar
    Join Date
    Apr 2015
    Location
    Irving, TX
    Posts
    545
    Post Thanks / Like
    Here is Hawaii code....

    Apply for License Plates
    To apply for your Hawaii tags, you must register your vehicle with your county’s motor vehicle office.

    Vehicle registration is required when you:

    Move to Hawaii (with an out-of-state vehicle).
    OR
    Buy a vehicle.
    Each county has its own registration process, requirements, and fees. See our Vehicle Registration page for more information.

    Renew Your HI Vehicle Tags
    You’ll need to renew your tags before the sticker on your license plate expires.

    You should receive a renewal notice before the expiration date.

    Most Hawaii counties offer renewal:

    Online.
    By mail.
    In person.
    See our Registration Renewal page for instructions.

    Replace License Plates or Stickers
    If your license plate or expiration sticker is lost, stolen, or damaged, you can order replacements from your county DMV in Hawaii.

    The process to get replacements differs for each county.

    Honolulu City & County Replacements
    If you live in Honolulu and your license plates are lost or stolen, you MUST file a police report. You don’t have to report damaged plates.

    You can then order replacement plates and decals by submitting:

    The Application for Duplicate Motor Vehicle Certificate of Registration (Form CS-L (MVR) 5).
    Your current registration certificate.
    Any license plates that you still have.
    Payment for the replacement fee. Contact your local DMV office for fees.
    Submit your materials:

    In person at any Satellite City Hall office.
    OR
    By mail to:
    Division of Motor Vehicles and Licensing
    P.O. Box 30320
    Honolulu, HI 96820
    Hawaii County Replacements
    To order replacement plates or expiration emblems in Hawaii County, you’ll need:

    The Application for Replacement License Plate and/or Decal.
    Your current vehicle registration.
    Any license plates that are still in your possession.
    Payment for the replacement fee:
    $5.50 for a license plate AND decal.
    $0.50 for a decal only.
    NOTE: See the application form for other fees.
    NOTE: Your vehicle‘s safety inspection must still be valid. The motor vehicle office may request your safety inspection certificate as proof.

    Submit your documents in person at a Hawaii MVR office.

  11. #11
    Senior Member 6t8dart's Avatar
    Join Date
    Apr 2015
    Location
    Irving, TX
    Posts
    545
    Post Thanks / Like
    I don't mean to pee in your cornflakes, but I had this issue when I moved from MI to TX with a non-emission compliant newer vehicle. Police stopped me, gave me a citation, I had to sell my truck, because it could not get registered in Dallas county, I'm hoping HI will allow you to do it. (I am watching this thread closely because I am planning to move to Hawaii)

  12. #12
    Member
    Join Date
    Jul 2013
    Posts
    57
    Post Thanks / Like
    Thanks so much for blazing the trail on this!

    Walt

  13. #13
    Senior Member Aloha818's Avatar
    Join Date
    Jul 2013
    Location
    Waikiki
    Posts
    544
    Post Thanks / Like
    I appreciate everyone's comments!

    This might not be a solution for everyone, especially if you plan to register your 818 in a "friendly" state. But for the states that have no provision or crazy hoops to jump through, this is the way to go!

    Attachment 44963

    And as I mentioned earlier, it's registered as an 818S Roadster. With the VIN as given by FFR.

    image.jpg
    Last edited by Aloha818; 08-29-2015 at 09:35 PM.
    "In wine there is wisdom, in beer there is strength, in water there is bacteria."

    818 (Chassis #34) Delivered 9/25/2013, First start 3/2/2014, First drive 4/5/2014, Registered 8/28/2015, First Dyno 3/18/2016, First SCCA event 4/3/2016, First car show HIN Honolulu 4/23/2016

  14. #14
    Senior Member Aloha818's Avatar
    Join Date
    Jul 2013
    Location
    Waikiki
    Posts
    544
    Post Thanks / Like
    Quote Originally Posted by 6t8dart View Post
    I don't mean to pee in your cornflakes, but I had this issue when I moved from MI to TX with a non-emission compliant newer vehicle. Police stopped me, gave me a citation, I had to sell my truck, because it could not get registered in Dallas county, I'm hoping HI will allow you to do it. (I am watching this thread closely because I am planning to move to Hawaii)
    Thanks for posting.

    No peeing in my cornflakes!

    Two days ago I had no tags, today I do!

    Your situation was completely different than mine. If your truck was registered in Michigan, in your name, and you moved to Texas, then you needed to have registered your truck in Texas as Texas is now your home state.

    I might not have made the process clear.

    I sold my 818 to a company (LLC) who's corporate office is located in Montana. So it's registered in its home state, as it should be.

    I just have permission to drive it, currently located in Hawaii.
    "In wine there is wisdom, in beer there is strength, in water there is bacteria."

    818 (Chassis #34) Delivered 9/25/2013, First start 3/2/2014, First drive 4/5/2014, Registered 8/28/2015, First Dyno 3/18/2016, First SCCA event 4/3/2016, First car show HIN Honolulu 4/23/2016

  15. #15
    Not a waxer Jeff Kleiner's Avatar
    Join Date
    Feb 2011
    Location
    Bloomington, Indiana
    Posts
    8,003
    Post Thanks / Like
    No cornflake violating intended here either but I'm really curious about how insurance will work with this method. I see from your other post that you haven't cleared that hurdle yet so please let us know how that plays out. I also saw the photo that Bob posted for you---great looking car!

    Cheers,
    Jeff

  16. #16
    Senior Member 6t8dart's Avatar
    Join Date
    Apr 2015
    Location
    Irving, TX
    Posts
    545
    Post Thanks / Like
    Yes, make sure your insurance company know you will be driving it in Hawaii, you don't want to find out later that they won't cover it.

  17. #17
    Senior Member
    Join Date
    May 2012
    Location
    Suisun City, CA
    Posts
    851
    Post Thanks / Like
    Insurance shouldn't be a problem. Military guys do it all the time (their car still registered in home state, but operated in another). When I switched over to NCM insurance, I still had AZ plates, but my policy reflected my CA address.
    818S - #67 (SOLD IT!)
    Delivered: 18 November 2013
    Go Karted: 29 December 2013
    Titled/Registered: 28 March 2014
    Finished: NEVER!
    341 hp @ 4844 RPM / 389 tq @ 3717 RPM

  18. #18
    Senior Member Aloha818's Avatar
    Join Date
    Jul 2013
    Location
    Waikiki
    Posts
    544
    Post Thanks / Like
    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!
    "In wine there is wisdom, in beer there is strength, in water there is bacteria."

    818 (Chassis #34) Delivered 9/25/2013, First start 3/2/2014, First drive 4/5/2014, Registered 8/28/2015, First Dyno 3/18/2016, First SCCA event 4/3/2016, First car show HIN Honolulu 4/23/2016

  19. #19
    Senior Member ram_g's Avatar
    Join Date
    Feb 2011
    Location
    Houston, TX
    Posts
    234
    Post Thanks / Like
    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.
    FFR Mk3.1 #6720. Carb'd 302. Fun.

  20. #20

    Super Moderator
    Ray's Avatar
    Join Date
    Feb 2011
    Location
    La Mesa, California
    Posts
    1,249
    Post Thanks / Like
    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
    Last edited by Ray; 08-31-2015 at 04:04 PM.
    I'm not getting gray, I'm adding chrome....

    “Under-steer is when you hit the wall with the front of the car and over-steer is when you hit the wall with the rear of the car. Horsepower is how fast you hit the wall and torque is how far you take the wall with you.”
    -- Jacques Schnauzee "World Famous Racecar Driver"

    "If you can make black marks on a straight from the time you turn out of a corner until the braking point of the next turn, then you have enough horsepower."--Mark Donohue

  21. #21
    Senior Member Aloha818's Avatar
    Join Date
    Jul 2013
    Location
    Waikiki
    Posts
    544
    Post Thanks / Like
    Quote Originally Posted by Ray View Post
    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?
    "In wine there is wisdom, in beer there is strength, in water there is bacteria."

    818 (Chassis #34) Delivered 9/25/2013, First start 3/2/2014, First drive 4/5/2014, Registered 8/28/2015, First Dyno 3/18/2016, First SCCA event 4/3/2016, First car show HIN Honolulu 4/23/2016

  22. #22
    Not a waxer Jeff Kleiner's Avatar
    Join Date
    Feb 2011
    Location
    Bloomington, Indiana
    Posts
    8,003
    Post Thanks / Like
    Quote Originally Posted by Aloha818 View Post
    ...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

  23. #23
    Senior Member Oppenheimer's Avatar
    Join Date
    Feb 2011
    Location
    Milford, CT
    Posts
    946
    Post Thanks / Like
    Quote Originally Posted by Jeff Kleiner View Post
    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.

  24. #24
    Senior Member Aloha818's Avatar
    Join Date
    Jul 2013
    Location
    Waikiki
    Posts
    544
    Post Thanks / Like
    A quick update on insurance.

    I sent an email to my State Farm agent in Hawaii this morning. I requested insurance for the 818, and stated the following in the email;

    "The car is titled as a 2013 Factory Five 818S.

    The chassis, body, and specific components are all manufactured by Factory Five.

    The engine, transmission, and some other technical components are from a 2001 Subaru Outback.

    Your underwriters should be familiar with the car as several of these have been built and State Farm is insuring some of them.

    I would like to have coverage in place by the weekend, if possible.

    I will be the only driver, and this is only a weekend fun and show car. Expect less than 1000 miles a year.

    Stated value of $30,000

    The car will be garaged."

    I also sent a couple pics.

    A couple hours later I received an email requesting the VIN and if I wanted the same coverage limits as my other cars. I replied and 30 mins later I received the quote. $515 for 6 months. A little higher than I had hoped for, not enough to complain about, but then I don't have any restrictions either.

    A quick call to provide my credit card info and 14 mins later I received the binder via email.

    So for what it's worth, no insurance issues. I'll be sure to post some beach pics from my first legal drive this weekend in my build page!
    "In wine there is wisdom, in beer there is strength, in water there is bacteria."

    818 (Chassis #34) Delivered 9/25/2013, First start 3/2/2014, First drive 4/5/2014, Registered 8/28/2015, First Dyno 3/18/2016, First SCCA event 4/3/2016, First car show HIN Honolulu 4/23/2016

  25. #25
    Senior Member
    Join Date
    Feb 2011
    Location
    Myrtle Beach, SC
    Posts
    2,108
    Post Thanks / Like
    I think you found an elegant solution personally.

    I think you are in a very unique situation as it pertains to your job, home of record, business "home" office, etc. It certainly only complicated the whole thing. However, I think the solution you presented makes some sense, and provides a reasonable solution to what could have been a nearly impossible problem.

    Let's see this pictures of you out with our hula girl!!

    Regards,

    Steve

  26. #26
    Senior Member Rasmus's Avatar
    Join Date
    Mar 2012
    Location
    Las Vegas, USA
    Posts
    983
    Post Thanks / Like
    This is a brilliant solution.

    Interesting part is the car is owned by a corporation registered in Montana. Thus, the legal owner "resides" in Montana. You, as a person, can not be forced to register the car in your home state. It's not your car. It's owned by a corporation. You happen to be the sole owner of said corporation, but a corporation's assets are held separate from personal assets.
    Fast Cars, Fast Women, Fast Haircuts!

  27. #27
    Senior Member Aloha818's Avatar
    Join Date
    Jul 2013
    Location
    Waikiki
    Posts
    544
    Post Thanks / Like
    Quote Originally Posted by WIS89 View Post
    I think you found an elegant solution personally.

    I think you are in a very unique situation as it pertains to your job, home of record, business "home" office, etc. It certainly only complicated the whole thing. However, I think the solution you presented makes some sense, and provides a reasonable solution to what could have been a nearly impossible problem.

    Let's see this pictures of you out with our hula girl!!

    Regards,

    Steve
    Quote Originally Posted by Rasmus View Post
    This is a brilliant solution.

    Interesting part is the car is owned by a corporation registered in Montana. Thus, the legal owner "resides" in Montana. You, as a person, can not be forced to register the car in your home state. It's not your car. It's owned by a corporation. You happen to be the sole owner of said corporation, but a corporation's assets are held separate from personal assets.
    Thanks WIS89 for your positive comments!

    I did take a first "Legal Drive" last week, forgot to post a pic here.

    image.jpg

    image.jpg

    And Rasmus you summed it up perfectly!

    I'm sure Ill eventually get some grief if I get pulled over enough times to where they know the car. In the car I keep the required registration and insurance card, along with a signed letter from the LLC that gives me their permission to operate the 818.

    If I was in a state where the 818 could be registered in its name I would make that my next step. But my first step would be the one I just took. Eliminate all the BS inspections, limited new VIN issuance (like CA), and time/money process I've read some states put you through. Probably at an overall savings if you count all costs (Montana has no sales taxes). Then with title in hand register the 818 in my personal home state.

  28. #28
    Senior Member Aloha818's Avatar
    Join Date
    Jul 2013
    Location
    Waikiki
    Posts
    544
    Post Thanks / Like
    Great news today, the LLC received the Title for the 818 today! As you can see the title lists the car as 2013 Factory Five 818s Roadster. No kit car or other notes. Should be able to walk this title into any state to register without any of the kit car BS. Obtain the locally required safety or emission inspection, and pay required taxes.

    image.jpg
    "In wine there is wisdom, in beer there is strength, in water there is bacteria."

    818 (Chassis #34) Delivered 9/25/2013, First start 3/2/2014, First drive 4/5/2014, Registered 8/28/2015, First Dyno 3/18/2016, First SCCA event 4/3/2016, First car show HIN Honolulu 4/23/2016

  29. #29
    Senior Member Pearldrummer7's Avatar
    Join Date
    Feb 2014
    Location
    Asheville, NC
    Posts
    1,230
    Post Thanks / Like
    Interesting that this came up the other day. Just playing a little bit of devil's advocate.

    http://thegarage.jalopnik.com/the-pi...cam-1711216059

  30. #30
    Senior Member 6t8dart's Avatar
    Join Date
    Apr 2015
    Location
    Irving, TX
    Posts
    545
    Post Thanks / Like
    The article makes a great point.

    I think what I would do now, if I were in your shoes. Sell the car back to yourself, or wife. Register it in Hawaii, get Hawaii plates, pay the taxes, and no one will ever accuse you of dodging taxes and fees. Since you already have a tile and vin number, there should not be a problem. And I would try to insure it through a specialty company like Haggerty. They know specialty cars and understand what they are, a major insurance company might have reason to pick apart your claim if ever in an accident.

    We are just trying to look out for you!

  31. #31
    Senior Member Rasmus's Avatar
    Join Date
    Mar 2012
    Location
    Las Vegas, USA
    Posts
    983
    Post Thanks / Like
    Thanks Frank, It's always good to look at something again, especially if it seems too good to be true.

    I'd be careful getting information from Jalopnik. It's writers are interested in views, not truth or reality. They write sensational articles for views to make money from ad revenue. Truth and reality are fine but if it gets in the way of a good story then bend it. Jalopnik is owned and run by Gawker Media which also runs: Deadspin, Lifehacker, Gizmodo, io9, Kotaku, and Jezebel. Additionally, the writer of the article Steve Lehto, while an attorney, is "an attorney almost exclusively in consumer protection and Michigan lemon law". Dude's not a tax lawyer. And Tax Law is a world away from "Consumer Protection".

    So lets look at a few things:
    Is it illegal to create a corporation in Montana that you are the Sole Owner of? No.
    Is it illegal for an individual to sell a car to said corporation? No.
    Is it illegal for said corporation to own a car? No.
    Is it illegal for said corporation to register it's car in it's State of Incorporation? No.
    Is it illegal for said corporation to allow a person to drive it's car? No.
    Is it illegal for an individual to try to avoid Sales Tax on a $450,000 motor home purchase in their home state by creating a corporation in Montana to purchase said motor home instead? Depends on your State Law, but I'm gonna go with Yes. GMan wants his money.

    And regarding the insurance. Just don't lie to your insurance company. Tell them exactly what you're doing, in writing. Tell them where it's kept. How often it's driven. How many miles it's expected to drive per year. Who's going to drive it. And how much money you've got in it. Just be truthful and you won't have an issue with your insurance provider.

    So for us, we're not trying to avoid paying sales tax on a vehicle purchase. And that's the big deal: not paying taxes.
    Fast Cars, Fast Women, Fast Haircuts!

  32. #32
    Senior Member billjr212's Avatar
    Join Date
    Feb 2011
    Location
    Frankfort, IL
    Posts
    734
    Post Thanks / Like
    I put out a counterpoint to that Jalopnik article when it was posted in the build thread. Copied here since it's been referenced again. dart's suggestion above could also be effective. Could sell it from the LLC or simply liquidate the LLC and take it as a distribution, but I wouldn't do that until you verify with Hawaii that they will let you register it at home now that it's been registered in another state and has a VIN number, etc.

    copied from the other thread:
    Regarding the taxes, this is easily covered by self-assessing use tax if appropriate and remitting to the state. I believe Hawaii has this, but Aloha can confirm locally. It used to be 4%. Many states, including Illinois, have this concept in place. Essentially, any time you buy something out of state and bring it back home to use it, you should be self assessing use tax. The *wink wink* used in the article was a reference to this. His comment about the IRS highlights why non-tax attorneys need to avoid commenting on tax matters (and tax people need to avoid commenting on legal issues, of course ). The IRS has nothing to do with any of this. State tax avoidance aspect is solved by paying the appropriate use tax.
    http://files.hawaii.gov/tax/legal/info/use_bro.pdf

    As far as the insurance side, as long as you tell them the address where the vehicle is housed, where/how it is used, and how many miles it is driven annually, there is no misrepresentation. Where a vehicle is registered should be irrelevant. Luckily, we have a vendor on here now that is from an insurance company, so maybe he'll weigh in to confirm, or someone can post directly to him if they are concerned about this.


    (I'm a CPA, not an insurance agent, so only half of my comments above come from an informed place. )

  33. #33
    Senior Member Pearldrummer7's Avatar
    Join Date
    Feb 2014
    Location
    Asheville, NC
    Posts
    1,230
    Post Thanks / Like
    Quote Originally Posted by Rasmus View Post
    Thanks Frank, It's always good to look at something again, especially if it seems too good to be true.

    I'd be careful getting information from Jalopnik. It's writers are interested in views, not truth or reality. They write sensational articles for views to make money from ad revenue. Truth and reality are fine but if it gets in the way of a good story then bend it. Jalopnik is owned and run by Gawker Media which also runs: Deadspin, Lifehacker, Gizmodo, io9, Kotaku, and Jezebel. Additionally, the writer of the article Steve Lehto, while an attorney, is "an attorney almost exclusively in consumer protection and Michigan lemon law". Dude's not a tax lawyer. And Tax Law is a world away from "Consumer Protection".

    So lets look at a few things:
    Is it illegal to create a corporation in Montana that you are the Sole Owner of? No.
    Is it illegal for an individual to sell a car to said corporation? No.
    Is it illegal for said corporation to own a car? No.
    Is it illegal for said corporation to register it's car in it's State of Incorporation? No.
    Is it illegal for said corporation to allow a person to drive it's car? No.
    Is it illegal for an individual to try to avoid Sales Tax on a $450,000 motor home purchase in their home state by creating a corporation in Montana to purchase said motor home instead? Depends on your State Law, but I'm gonna go with Yes. GMan wants his money.

    And regarding the insurance. Just don't lie to your insurance company. Tell them exactly what you're doing, in writing. Tell them where it's kept. How often it's driven. How many miles it's expected to drive per year. Who's going to drive it. And how much money you've got in it. Just be truthful and you won't have an issue with your insurance provider.

    So for us, we're not trying to avoid paying sales tax on a vehicle purchase. And that's the big deal: not paying taxes.
    I absolutely agree. The biggest take away from this (opinion) article for me was that you don't want to commit tax fraud, or anything even close to tax fraud. Barely legal could be a headache, even if it's not a cost burden.

    I think you're right on declaring everything to insurance, and I like the whole selling the car back to yourself idea. Then you pay state sales tax on it upon registering it with your new shiny VIN.



    Again, not saying this can't work or that I'm not considering it. Just more food for thought, since it's not that straightforward to me.

  34. #34
    Senior Member edwardb's Avatar
    Join Date
    Feb 2011
    Location
    Lake Orion, Michigan
    Posts
    10,547
    Post Thanks / Like
    There are two separate themes in thread as I see it. (1) Unable to title/license a particular vehicle in a particular state, in this case an 818. (2) Tax "savings." The two have gotten intertwined to some degree. The first I understand and maybe there are no easy answers. But for the second, reference my post #6. I stand by each word in that post, especially the part about not posting personal details in a public forum. It's a little like the guy who posted himself speeding with his motorcycle on YouTube. How did that turn out? Whatever his credentials or bias, the author referenced is not alone in his legal opinions. In the end it boils down to "tax avoidance" (something we all try to do by claiming all legal exceptions, deductions, etc.) versus "tax evasion." I wouldn't want to be on the wrong side of that discussion.
    Last edited by edwardb; 09-16-2015 at 12:43 PM.
    Build 1: Mk3 Roadster #5125. Sold 11/08/2014. Build 2: Mk4 Roadster #7750. Sold 04/10/2017. Build Thread
    Build 3: Mk4 Roadster 20th Anniversary #8674. Sold 09/07/2020. Build Thread and Video. Build 4: Gen 3 Type 65 Coupe #59. Gen 3 Coyote. Legal 03/04/2020. Build Thread and Video
    Build 5: 35 Hot Rod Truck #138. LS3 and 4L65E auto. Rcvd 01/05/2021. Legal 04/20/2023. Build Thread. Sold 11/9/2023.

  35. #35
    Senior Member
    Join Date
    Feb 2011
    Location
    Loveland, CO
    Posts
    462
    Post Thanks / Like
    Just noticed this post on Montana licensing, and I realize it is a little old, but thought I'd post on some recent activity in Colorado. Just noticed a C7 Vette for sale locally that had been in an accident. Seller indicates the car is registered in Montana, and the insurance company refused to cover the damage, and he was willing to sell at a steep discount. Something about insurance and tax fraud. Also, a friend's insurance company recently refused to insure his collector car, as it was owned by his LLC (Montana), a corporation and not the individual
    So, just be careful in evaluating some of these schemes. The activity is completely legal if you live in Montana. You need to evaluate if the risk is worth the reward?
    Google a recent article on this subject by John Phillips, a columnist for Car and Driver Magazine, dated October, 2017.

    Ralph
    Last edited by rponfick; 04-25-2019 at 09:30 AM.

  36. #36
    Junior Member
    Join Date
    Aug 2023
    Posts
    3
    Post Thanks / Like
    Congrats and thank you for sharing!
    Could you suggest a good attorney in Montana who could run this process for me?
    Thanks!

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

Stewart Transport

Visit our community sponsor