Montana Motor Vehicle Fees
CHASE WALKER
AUGUST 31, 2021
The State of Montana imposes a variety of registration fees on motor vehicles, trailers and recreational
vehicles that vary substantially based on vehicle type, age, and length or weight. The DOJ website and
Montana Code Annotated provide detail on specific fees by type. In addition to these registration fees,
counties may also impose a local option tax of up to 0.7% of the retail value of the vehicle, which
provides revenue directly for the county, and cities and towns within that county. Big Horn, Deer
Lodge, Flathead, Granite, Phillips, and Richland counties are the only counties that currently do not
have a local option tax.
Revenue generated from vehicle registration fees is a fairly stable and significant contributor to the
state general fund, as it is the fourth largest general fund revenue source. Light vehicle registrations
make up a majority of the total revenue collections, at nearly 90%. Large trucks, motor homes,
motorcycles, and boats/snowmobiles make up the remaining 10%. Light vehicles aged 0 to 4 years old
pay an annual fee of $217, 5 to 10-year-old vehicles pay an annual fee of $87, those older than 11 years
can choose to pay an annual fee of $28 or may choose to permanently register their vehicle for a one-
time fee of $87.50, which essentially ages them out of the registration fee system. The fee structure for
all vehicle types are outlined below.
Vehicle Type Class Definition Age Class Fee
Light Vehicles
Light vehicles, trucks,
and buses that weigh
less than 1 ton
0-4 yrs $217
5-10 yrs $87
11+ yrs $28
Permanent Fee for 11+
yr old vehicles
11+ yrs $87.50
Large Trucks
Heavy trucks, buses,
and logging trucks that
weigh more than 1 ton
$22.75
Motor Homes 0-2 yrs $282.50
2-5 yrs $224.25
5-8 yrs $132.50
8+ yrs $97.50
Permanent Fee for 11+
yr old vehicles
11+ yrs $237.50
Motorcycles Highway use OTO $53.25
Boats Less than 16 feet OTO $65.50
16-19 feet OTO $125.50
19+ feet OTO $295.50
Snowmobiles OTO $60.50
Montana Vehicle Registration Fees
REVENUE HISTORY AND TRENDS
Historically, registration fee revenues have remained relatively flat and do not experience the volatility
that is often seen with several other large general fund sources. Generally, fluctuations in vehicle
registration fee collections occur due to vehicles aging and moving through the classes of
progressively lower registration fees and eventually out of annual renewals when they are eligible to
become permanently registered. Economic shocks that impact new vehicle purchases are often seen
several years later in revenues, as a lower number of new vehicles being purchased and registered will
cause a decline in revenue. An example of this can be seen in the graph below, as there was a slight dip
in the years following the 2008 recession.
Looking forward, revenues are expected to remain relatively flat. However, as vehicles continue to
make technological leaps and last longer, future revenue collections may be impacted as the need to
purchase a new vehicle as frequently declines.
Although registration revenue is a significant source of general fund revenue, growth in registration
revenue collections has not kept pace with total general fund growth due to the flat fee structure. The
graph below displays vehicle fee revenue as a percentage of total general fund revenue. In 2002,
vehicle fees were nearly 8% of total general fund revenue, while in 2020 that number declined to
about 4%.
THE LUXURY VEHICLE/MOTORHOME FEE AND TAX INCENTIVES
In the 2017 Regular Session, HB 650 implemented a new fee imposed on luxury vehicles and
motorhomes registered in the state of Montana. The fee is $825 for luxury light vehicles with a retail
value of greater than $150,000 and $800 for motorhomes with a retail value of greater than $300,000.
The fee is in addition to the normal registration fees outlined on the first page above, and revenue
from the fee is distributed into the motor vehicle administration state special revenue fund.
The luxury vehicle fee also highlights the unique tax structure that incentivizes out of state luxury
vehicle owners to register their cars in Montana. Because there is no sales tax in the state, and several
counties also do not levy a local option tax, the cost of registering luxury vehicles here as opposed to
other states that may have registration fees, sales tax, and local taxes is significantly lower. This article
talks about the luxury vehicle fee, and why it is likely that you will see a Montana license plate on a
luxury car (although probably not actually in the state of Montana).
The graph below shows the number of luxury vehicle and motorhome registrations for select counties
in the state since the luxury vehicle fee was implemented. Flathead, Granite and Deer Lodge counties,
who lack local option vehicle taxes, have the largest amount of luxury vehicle registrations. Missoula
county registers a significant number of the luxury motorhomes in the state, which is likely due to the
fact that one of the largest RV dealers in the state is in Missoula. Although Missoula county levies a
local option tax, the tax only applies to light vehicles, so it does not impact the cost of registering a
luxury RV within the county.
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
% of General Fund
Fiscal Year
Vehicle Fees as a Percentage of Total General
Fund Revenue
CONCLUSION
Vehicle registration fees will likely continue to make up a significant portion of total general fund
revenue, particularly as the population grows within the state. However, due to the registration fees
being a flat fee rather than a percentage of retail value of the vehicle, the percentage of total general
fund revenue that vehicle fees make up will likely continue to fall unless the legislature chooses to
make changes to the fee structure.
