California Finally Closes the Montana Loophole for Exotic Cars

The state was losing $20 million a year, according to California State Senator Jerry McNerney (D-Pleasanton), chair of the Senate Revenue and Taxation Committee. So in March, McNerney introduced SB 1406 to close the “Montana Loophole.” That bill was signed into law by Governor Gavin Newsom this week.

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“For years, wealthy tax evaders have avoided paying California sales taxes by setting up phony shell companies to buy Ferraris, Lamborghinis, and other luxury vehicles in Montana and then bringing the vehicles back to our state,” McNerney said. “Closing the Montana Loophole will help restore some fairness to our sales tax system by ensuring that everyone pays what they owe. SB 1406 also enables the state to recover up to $20 million in lost revenue each year to pay for road repairs and other essential services.”

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