Aircraft Registration in Montana
Montana offers a unique opportunity for aircraft owners to register their planes through a Limited Liability Company (LLC) and enjoy significant tax benefits. The state's favorable tax laws and straightforward registration process make it an attractive option for aircraft owners across the United States. By forming a Montana LLC, owners can legally register their aircraft in Montana, even if they reside in another state, bypassing potentially hefty sales taxes that could be imposed in their home state, even in cases where the airplane was purchased years earlier. And though imposing taxes years after the fact on a plane that was purchased in another state sounds so unjust as to be unbelievable, it is unfortunately true: there are states which will expect you to retroactively pay sales tax from the original purchase years ago, if you haven’t paid it to some other state already. For that reason alone it’s important to understand the benefits of registering your airplane under an LLC.
Benefits of Registering Your Aircraft in Montana
Registering an aircraft in Montana through an LLC provides several compelling advantages:
No Sales Tax: Montana does not charge sales tax on aircraft purchases, which can lead to substantial savings, especially on high-value aircraft. For example, avoiding a 7.5% base rate sales tax in California (plus up to 2.5% depending on the local tax rate) could save you $75,000 to $100,000 on a $1 million aircraft.
No Personal Property Tax: Unlike many other states, Montana does not levy a personal property tax on aircraft. This can result in substantial ongoing savings throughout the ownership of the aircraft.
No Use Tax: If you're planning on keeping your airplane in Montana the majority of the year in addition to having it registered there, it’s important to note that, unlike some states, Montana does not charge use tax. But if you don’t plan on keeping your plane here, it’s nothing to worry about; whether in-state, out-of-state, or out-of-country makes no difference to your MT aircraft registration, it only affects which state and local laws may apply to your airplane and its usage.
Privacy: Montana LLCs offer an additional layer of privacy for aircraft owners. The state does not require LLCs to disclose ownership information publicly, which can be particularly appealing for individuals who prefer to keep their asset ownership confidential.
Step-by-Step Guide to Forming a Montana LLC
Forming a Montana LLC for aircraft registration involves several key steps that LLCTLC expertly navigates for our clients:
Choose a Business Name: Begin by selecting a unique name for your LLC. Ensure it is not already in use by checking the Montana business database, or LLCTLC can assist you in verifying and reserving your desired business name.
File Articles of Organization: Your LLC is officially formed by filing Articles of Organization with the Montana Secretary of State. This document must include essential details such as the LLC's name, the business purpose, your registered agent, and the principal office location. LLCTLC can handle this filing on your behalf, ensuring all legal requirements are met.
Designate a Registered Agent: Montana law mandates that all LLCs must designate a registered agent with a physical address within the state. This agent receives all legal documents for the LLC. As your registered agent, LLCTLC provides not only the required physical address and accepts correspondence from the Montana Secretary of State on your behalf.
Draft an Operating Agreement: While Montana does not require an operating agreement, crafting one is beneficial. This document outlines the operational structure and financial arrangements of the LLC members. LLCTLC recommends consulting with your attorney to create the operating agreement that fits your specific needs.
Submit the Filing Fee: A filing fee must accompany the Articles of Organization when submitted to the Montana Secretary of State. LLCTLC will inform you of the current fees and facilitate this payment as part of your LLC formation process.
Upon completion of these steps, your LLC will be fully recognized by the State of Montana, enabling you to proceed with the purchase and registration of your aircraft under the newly established LLC!
Navigating the Aircraft Registration Process in Montana
After establishing your Montana LLC, the next step is to register your aircraft:
Aircraft Purchase: Purchase your airplane under the LLC’s name so ownership is properly attributed to your Montana entity.
Submit Registration Forms: Fill out and submit the necessary aircraft registration forms to the Montana Department of Transportation Aeronautics Division. These forms will require information about the aircraft, such as make, model, and year. LLCTLC ensures that all forms accurately reflect the LLC’s ownership of the aircraft.
Pay Registration Fees: A registration fee, based on the aircraft type and age, will be required at the time of registration. LLCTLC will guide you through the payment of registration fees. This fee is significantly lower compared to any percentage-based sales tax in other states.
Receive Your Registration: Once processed, you'll receive an aircraft registration which is typically valid for one year and must be renewed annually by March 1st. LLCTLC can handle the renewal process, ensuring your aircraft remains compliant and operational without any hassle.
Annual Requirements and Maintenance for Your Montana LLC
To maintain your Montana LLC and keep your aircraft registration current, adhere to the following annual requirements:
Annual Report: LLCTLC will ensure that your LLC files its annual report with the Montana Secretary of State. This report is due every year by April 15th and involves a nominal filing fee. LLCTLC takes care of the paperwork and submission to keep your LLC in good standing.
Renew Registration: LLCTLC will manage the annual renewal of your aircraft registration with the Montana Department of Transportation Aeronautics Division. It is crucial to complete this by March 1st each year to avoid any penalties. We ensure that your aircraft registration is renewed on time to prevent any disruptions to your operation of the aircraft.
Registered Agent: LLCTLC remains active and available to receive all legal and state correspondence for your LLC.
Important Legal Disclaimer
This blog is not intended to provide legal advice. Managing the operational control of an aircraft owned through an LLC involves navigating complex state and FAA regulations. To ensure full compliance with all legal requirements, we highly recommend that you consult with an experienced aviation attorney. This professional guidance is crucial to structuring your ownership and operational practices correctly and legally.
Get Started with Your Montana Airplane Registration Today
For streamlined support in registering your aircraft in Montana through an LLC, LLCTLC offers expert guidance:
Initial Consultation: Discuss your needs directly with our team to understand the process and benefits fully.
Efficient Setup: We handle all paperwork and interactions with Montana's Secretary of State to ensure your LLC and aircraft are registered correctly.
Ongoing Support: LLCTLC provides continuous support for annual filings and any updates to your registration.
Connect with LLCTLC today to simplify your aircraft registration and maximize your savings!