Mark Perry notes why so many really expensive cars have Montana license plates: you pay the sales tax on a car at the time you get the plates.
Montana has no sales tax. It doesn’t even require the car to be physically present to get the plates.
So, if you’re typical, you buy your $20K car in, say, California, and don’t think too much about the almost $2K you pay in sales tax.
But if you’re rich, you buy your $1,000K car in California, travel up to Montana, get the plates, and avoid the $100K in sales tax. I’d say that’s worth the trip.
I don’t know where I first heard of this technique, but it was in my head when I got my first job and car.
I was living in New York. It was 1989, and sales tax was about 8%. I was in graduate school, and I had 2 older cars dying slow painful deaths on my hands.
When I got the offer for my first real job (at the University of Alabama – thanks James Cover), one of the first things I did was drive down the road to buy a new car. It cost $14K. I had 30 days to plate the car.
I called the DMV in Tuscaloosa, and worked a plan out with a lovely older woman who managed the office.
Then I flew down to Alabama to find a place to live. While there, I plated the car that was sitting in the parking lot at my apartment building back in the Buffalo suburbs.
My recollection is now 27 years old, but I think the sales tax on cars in Alabama was 2% at the time. So I saved almost two months worth of rent.
The only condition was that I had to take up residence in Alabama within some rather long period like 90 days, which was no problem at all. I still tell people that New York was merely a good place to be from.
P.S. Amusing personal story. My late father-in-law was … hmmm … not popular with his family. He was not dialed in that I was getting a job, had a job, or was moving away … or that his daughter was going with me. He claimed that the first he found out about this was seeing the new car with Alabama plates in his driveway. Psyche!