By: Marianne Goodland | Colorado Politics
Coloradans looking to avoid high vehicle registration fees have increasingly turned to what’s known as the “Montana loophole” — a strategy that surfaced recently at a luxury car event near the Cherry Creek Mall.
Here’s how it works.
A Colorado resident buys a high-end vehicle — anything from a large recreational vehicle to a supercar like a 2022 McLaren 765LT Spider, which was recently listed in Boulder for more than $1 million. The buyer then forms a limited liability company in Montana, a service some firms advertise for about $1,000, and registers the vehicle under that LLC.
The vehicle is still owned, maintained and driven in Colorado, meaning it uses state roads and services here. But because it’s registered to an out-of-state LLC, Colorado receives none of the associated registration revenue or fees.
Under certain conditions, the avoided taxes can include sales tax totaling tens of thousands of dollars.
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