State Crackdowns On Out Of State Titles From Montana LLCs

The Rising Enforcement of Cross-State Registration Laws
HERE we go again with additional information about another instance where out-of-state titling and registration is becoming enforceable. Frequently, individuals believe that if they want to register their vehicle in a different state because it’s more convenient, less expensive, or to circumvent something in their home state, they can get away with it. One of the most prevalent methods currently is the entire Montana LLC loophole. Previously, it was Vermont, but states are becoming aware of this practice.

Connecticut’s Bridgeport Crackdown Results
AND here’s an example where in one municipality in Connecticut, Bridgeport, which isn’t a large state but is one of the bigger cities in Connecticut, during one month of conducting a crackdown, they discovered 5,000 vehicles that were registered out-of-state. Those individuals received fines, penalties, and some vehicles were seized.

How Authorities Track Out-of-State Vehicles
SO how do they accomplish this? Well, we’ve discussed this in previous videos. Currently, it’s simple for them to do it. In this situation, they’ve contracted a private investigative agency, a private company to perform what’s called ALPR, automated license plate readers, where they have cameras that are positioned throughout town on vehicles driving around, on stop signs, on street poles, in parking lots that are recording license plates thousands upon thousands upon thousands per minute. This information goes into a computer system and they determine if there’s an out-of-state plate, it flags it.

Distinguishing Residents from Visitors
NOW to be fair, if you’re on vacation visiting, they’re not going to flag you for being out-of-state. However, if they observe that same license plate repeatedly every day going to the same parking lot at 8:30 in the morning or every day driving down the same street, they know you’re not on vacation visiting your Aunt Sarah. They know that you’ve resided there and you’re evading the state regulations.

The Investigation Process
THEY’RE going to look up that plate, find out who the owner is, then they’re going to conduct research on whether that owner has connection to Connecticut, and they’re going to send you a summons. How do they accomplish all this? They start out with an ultimate goal to identify people who are failing to pay local car taxes because their wheels are not correctly registered in this city.

Connecticut’s Specific Tax Requirements
AND this is something in Connecticut that occurs frequently because of sales tax. People want to avoid sales tax. Per Connecticut law, anyone who moves from or purchases a car from another state has 90 days to register and they have to get their taxes paid. If you are already living in Connecticut, then 90 days started when you first move there. It doesn’t start when you buy your car. In most cases, there are lots of households that have not done so, and in some cases it might be less expensive to remain registered elsewhere.

Understanding Sales and Use Tax
REMEMBER the tax is not just a sales tax. It’s called a sales and use tax. So if you use the vehicle in another state, then you have to register it there. That’s why you see on large 18-wheeler trucks what’s called apportionment plates where if the truck is used in many different states, they apportion the taxes among the different states. So if you use your vehicle primarily in the state where you reside, you have to pay taxes there, even if you bought it somewhere else, even if you registered it somewhere else.

Penalties and Consequences
SO make sure that you’re not getting caught up in one of these situations because they’re going to penalize you. And if they find out that you did this for some other purpose, like to evade registration or inspection or title documents, they might even have additional penalties besides just the taxes and the interest and the fines that go on top of it.

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