Tax Free RV

TaxFreeRV

How to Get a Montana Boat Registration

Montana, like several other states in the US, does not have sales or property tax on registered titles. So, many boat owners get registered here to avoid paying tax, saving themselves a lot of money.

Montana offers permanent boat registrations to residents. Non-residents can form an LLC in the state and register their boat under that LLC. The LLC then becomes a resident of the state instead of the person themself.

So, they would own the LLC, which in turn would own the boat. This is perfectly legal, and there are numerous agencies available throughout the state that can help you get started.

This article is a comprehensive guide on how to register your boat in Montana. It covers essential points such as the requirements, steps, fees, processing time, and the potential benefits and risks.

Requirements

Which Boats Need to be Registered?

Sailboats 12 feet and longer, all motorboats, and personal watercraft must be registered and numbered. They must also contain two types of decals: a permanent decal and a validation decal.

Non-motorized sailboats less than 12 feet are exempt from registration and taxation. This exemption also extends to ALL manually propelled boats, a vessel’s lifeboat, and vehicles owned by the government.

Who Can Operate the Boat?

Children aged 12 years or younger are not allowed to operate a motorboat or a personal motor-powered watercraft (having more than 10 horsepower) unless accompanied by someone who is at least 18 years old.

Early teenagers (13 and 14 years old) can operate a motorboat or a personal watercraft if:

  • They have a valid Montana motorboat operator’s safety certificate
  • They can show evidence of having completed a state-approved boating safety course
  • They are accompanied by someone who is at least 18 years old.

Decals

The permanent decal is essentially proof of the fees and tax payment. This can be obtained after successful registration in the County Treasurer’s office. This decal MUST BE displayed on the left (port) bow, just behind the boat’s number, and is valid until the vehicle is sold.

Registered water vehicles must have two validation decals, one on each side of the boat’s bow, behind the boat’s number. These can be obtained free of charge at any Fish, Wildlife & Parks regional offices or online.

New owners can also obtain them from the County Treasurer after a successful registration.  Validation decals, however, are issued in 3-year blocks and will need to be replaced after they expire.

Necessary Equipment

Federal laws require essential safety equipment to be on board at all times. These include:

  • Personal flotation devices (life-jackets)
  • Fire extinguishers
  • Backfire flame arresters
  • Proper ventilation systems (Montana requires two ventilation intake ducts to vent bilges and fuel tank compartments)
  • Whistles, horns, and bells
  • Navigation lights

How to Register Your Boat

Montana Residents

Residents of Montana owning a boat must first obtain a certificate of ownership (title) and certificate of number (registration). All the required fees should be paid to the County Treasurer of the state. The registration number must be carried on board and be available for inspection at any time the boat is in operation.

Non-residents

Properly registered boats in a different state or country may operate in Montana for up to 90 consecutive days.

If you’re a non-resident and want to register your boat in Montana, you’d probably want to do so under a Montana LLC to enjoy the absence of sales tax like the other residents.

Registration using a Montana LLC

Forming the LLC

To take advantage of the no sales tax law of Montana, non-residents have to first set up the LLC. A Montana LLC (Limited Liability Company) refers to a business entity that merges aspects from other types of business entities: partnerships, sole proprietorships, and corporations.

Starting a Montana LLC is relatively affordable. You’ll have to pay around $70 for the initial filing fees and an annual maintenance cost of around $20.

To start off, you need to come up with a unique company name for your LLC. Make sure you cross-check your selected name on Montana Business Database to avoid any repetition.

Once set, you’ll need to find a Montana Registered Agent, which can either be an individual or an organization that processes legal and state documents for your LLC.

Next, you’ll need to file the Articles of Organization. You can easily submit it online through the Montana Secretary of State website.

In this case, you’ll need to include relevant information such as the LLC’s name, mailing address, the structure of management, duration, information of the registered agent and all concerned members/managers, and lastly, the title and signature of the person filing the Articles.

Using the LLC to Register Your Boat

Once your agency forms, your agent will give you all the necessary documents so you can start the registration process.

You can then purchase your boat under the LLC, as you’re the owner. The boat dealer or the owner can then send the boat’s title work to your registered agent, who’ll file the registration. The registration can take about 3 weeks to complete.

Homemade Vessels

Homemade boats that require registration should first have a 12-digit hull identification number (HIN), usually be found on the exterior of the vessel’s transom, in the upper-right corner.

The HIN number can be retrieved from any Fish, Wildlife & Parks regional or area office for a $5 application fee. The boat owner is responsible for attaching the HIN number on the boat permanently and having the boat inspected by a peace officer.

Fees

Under Section 61-3-321 of the Montana Code Annotated, all motorboats, personal watercraft, motorized pontoons, and sailboats 12 in length and longer must be registered permanently through the County Treasurer’s Office.

DetailsAmount
Certificate of Ownership (title)$10
Boats under 16 feet$65.50
Boats between 16 and 19 feet$125.50
Boats of 19 feet and above$295.50

If you’re registering using an LLC, there will be additional one-time costs and yearly costs. Maintaining a registered Montana agent can cost about $50 a year, depending on the agent of course. It also costs an additional $20 a year to maintain the LLC with the Secretary of the State.

Benefits of Registering Your Boat in Montana

The most obvious benefit of having a registered boat is that it can be identified if the boat is in an accident or missing. A portion of the registration fee also goes towards supporting boat safety programs that are locally approved.

The benefit exclusive to having a Montana registered boat is that you don’t have to pay sales tax on your boat. 

If your boat costs $500,000, and the sales tax is 8%, you’ll have to pay a total of $540,000. Registering your boat in Montana can thus save you $40,000.

Risks of Registering Your Boat in Montana

For non-residents registering their boat in Montana, you may want to beware of the risks. 

Generally, boatmen need to pay sales tax not where it’s bought but where it’s used. So, having a Montana registered boat in a different state means that you have to register it again and pay the sales tax required by the state.

For example, if you bring your boat to Florida, the state would require you to pay a 6% use tax for the boat. This tax is due if you bring your boat to Florida within 6 months of the purchasing date.

If you’re a non-resident, it is strongly recommended that you get to know all about the taxation rules of the state where you will be using your boat.

Lately, the Georgia Department of Revenue has been cracking down on motor vehicles with a Montana license plate. Furthermore, they have provided rewards to other citizens who can provide information regarding Montana LLCs.

How Long it Takes

If you are forming an LLC, the required paperwork can take around 7 to 10 business days. You can get it done faster if you’re willing to pay extra. It can cost about $20 to process it in a day, or about $100 to get it processed within the hour.

The registration for the boat with the Montana DMV can take about 3 weeks. You will get the title of your boat 2 to 4 weeks afterward.

Conclusion

To sum up, registering your boat in Montana can save you a large amount of money in terms of sales tax. Non-residents usually form an LLC and purchase the boat under the company.

There are numerous organizations in Montana that can form your LLC. This would require a unique name, a registered Montana agent, and filing the Articles of Organization.

The registration itself is a simple process and would require you to visit the County Treasurer’s office with the required documents or have your agent do the entire registration.

Sailboats 12 feet and longer, all motorboats, and all personal watercraft must be registered and equipped with permanent and validation decals and safety equipment (flotation devices, fire extinguishers if it is a motor, etc.) at all times.

Risks of registering your boat in Montana are realized when it is operated outside of Montana. Before taking the boat out of the state, the owner or the operator should understand the taxing laws of their desired state.

FAQs

  1. Can I register a boat I already own?

Your Montana Registered Agent can do it for you. This will, of course, slow down the whole registration process, but it is possible.

  1. Can I register my boat from a foreign country?

Yes, you can. If you’re already registered, regardless of state or country, you can operate your boat in Montana for a maximum of 90 days.

Afterwards, you can get it registered from the local County Treasurer’s office under a Montana LLC

  1. Are there other states like Montana with no sales tax?

Some of the other states with no sales tax include Delaware, Alaska, Oregon, and New Hampshire.

However, note that these states might also have adjusted rates for other taxes. 

Have Any Question?

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.