Can you sell a new Tesla to your own LLC before registering or is this "title jumping?"

[MidwestRO]

I purchased a MSP in my name in Missouri. I have an LLC and a registered agent to accept my mail in Montana, although I don't do any business there currently.

There is no sales tax in MT, but in MO after local taxes it's over 9%, which is annoying I have to pay an extra 5% county and city tax on a car that I literally drive all over the state and out of state.

I have not yet registered the car as in MO you do not pay tax to the dealer (yes, I know Tesla isn't even a dealer), but to the DMV when you register it.

I have been considering "selling" the car from myself to my LLC then registering it in Montana to avoid paying the tax.

I know you can't do this once the car has been titled as this is called "title jumping" and is a felony. I.e., unless you are a licensed dealer, if you want to flip a car you actually have to title it in your name and pay tax on it first before you sell it.

However, this is a brand new car from Tesla, and I don't have a title, just a MCO (manufacturer's certificate of origin). So the question is, even though Tesla gave me MO temp tags and pre-filled out paperwork to take to the MO DMV, can I just create a bill of sale from myself to my LLC and initially title it in MT, or is this also considered title jumping and is illegal?

Because the car was purchased in MO, do I still legally owe tax on it in MO even if I title it in another state?

 

[entropyhouse]

I don't think you need to sell the car into the LLC, you could contribute it as an in-kind contribution. Asset transfer to your wholly owned (disregarded entity) company in exchange for equity in the LLC.

 

[ATPMSD]

This is an old trick that people with airplanes used to try. Registering a car in another state to avoid taxes is tax fraud. Cars must be registered in the state where they are to be driven. This would also raise car insurance issues. Sorry.

 

[ginmqi]

This is an old trick that people with airplanes used to try. Registering a car in another state to avoid taxes is tax fraud. Cars must be registered in the state where they are to be driven. This would also raise car insurance issues. Sorry.

This is also very common and old trick in the auto industry also. You'll see lot of expensive cars with Montana plates. Lots of people form shell LLCs with Montana addresses so they can avoid sales/registration fees on expensive cars.

Will the FBI knock down your door a week after you register it in Montana? No...but is it illegal if a LEO chooses to enforce the law if/when you are discovered? Yes....

 

[outdoors]

This is also very common and old trick in the auto industry also. You'll see lot of expensive cars with Montana plates. Lots of people form shell LLCs with Montana addresses so they can avoid sales/registration fees on expensive cars.

Will the FBI knock down your door a week after you register it in Montana? No...but is it illegal if a LEO chooses to enforce the law if/when you are discovered? Yes....

Most times you have the problem with where the car is housed with one's insurance company. It's called garaging fraud. The DRN will catch you. Estimates are it contains 3/4 of the license plates. A LEO is worried about other things. If you do some of the other bad things. Sure.

 

[AMPd]

This is also very common and old trick in the auto industry also. You'll see lot of expensive cars with Montana plates. Lots of people form shell LLCs with Montana addresses so they can avoid sales/registration fees on expensive cars.

Will the FBI knock down your door a week after you register it in Montana? No...but is it illegal if a LEO chooses to enforce the law if/when you are discovered? Yes....

Not to go too off topic but if the LLC owns the vehicle and the LLC is in another state then what exactly would the LEO have a problem with?
If I work for a company, and they give me a company car, then I move to a different state with that car, I can’t register the vehicle in that state as I down own the vehicle.

 

[ucmndd]

If I work for a company, and they give me a company car, then I move to a different state with that car, I can’t register the vehicle in that state as I down own the vehicle.

It doesn't much matter who owns the car, that owner is obligated to register it in the state where it's housed/operated.

 

[dakhlkt22]

The biggest issue would be insurance coverage. Commercial auto insurance might be more expensive, and insurance companies can be ruthless about denials of coverage due to the owner violating the terms of coverage. Not driving in the state where you registered the vehicle and originated your auto insurance seems like a huge red flag and probably violates their coverage terms. I personally would not be willing to drive without liability coverage. You're putting all your assets at risk.

 

[PD46]

I live in MO also and absolutely despise having to pay personal property tax on vehicles. I ran through the same logic and as others have mentioned, and it's just not worth it - primarily due to concerns with insurance coverage. Never buy at the end of the year if possible because if you can have have the sale date on Jan 2nd, then you'll defer those taxes for a whole year.

 

[terranx]

It doesn't much matter who owns the car, that owner is obligated to register it in the state where it's housed/operated.

Why is every single uhaul registered in Arizona then?

 

[ucmndd]

Why is every single uhaul registered in Arizona then?

Because apportioned registrations for large fleets operating in multiple states is a thing that we’ve solved in an equitable way, and has nothing to do with personal or small-scale vehicle operation. Even with AZ plates, U-Haul pays its fair share in every state where they operate through this program.

California’s page describing the program:

International Registration Plan - California DMV

The International Registration Plan (IRP) is an option for registering commercial vehicles that allows for interstate operation under a single registration plate and registration certificate (cab card) issued by your “base” state.

www.dmv.ca.gov

 

[RussZTT]

This is an old trick that people with airplanes used to try. Registering a car in another state to avoid taxes is tax fraud. Cars must be registered in the state where they are to be driven. This would also raise car insurance issues. Sorry.

Exactly. My wife works for an insurance company and she said insurance companies are starting to crack down and needs to be registered where the primary residence is located.