If you are observant of such things, you may have noticed a particularly large number of RVers with Montana and South Dakota license plates. However, if you were to talk to any the people in those vehicles, you’d quickly learn that the vast majority of them rarely step foot in those states. Why then, do so many RVers register their vehicles in these states? In short, the answer is simply to save money. Let’s take a closer look and learn a bit more.
Montana charges zero sales tax on RVs. The registration fees in this state are relatively small, making registering a vehicle in Montana a tempting option, especially for large ticket items, like motorhomes or a top-of-the-line fifth-wheel trailer.
The way that many RV buyers make this work is by establishing an LLC in Montana and registering their RV as a business vehicle. Most people go through a law office in order to do this. With all tax issues, it’s crucial that RV owners find good legal counsel to help them make the right decisions.
Like in Montana, people also choose to register their vehicles in South Dakota for tax reasons. However, there are a few differences to consider. For starters, this state does charge a 4% excise tax. That said, this is still much lower than most states, and the registration fee is also very reasonable. While the cost to register an RV in South Dakota might come out to be a bit more expensive, there are other things that draw people to South Dakota. For instance, this state has no state income tax, very low sales tax, and–due to a number of mail forwarding services–is easy to establish residency in South Dakota. Therefore, many full-time RVers choose South Dakota as their home state.
As you can see, there is a very real reason behind the number of Montana and South Dakota license plates you see on the road. Now the next time you see one drive by, you’ll have a bit of trivia to share with the family.
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