California May Close the Montana Luxury Car Registration Loophole

A loophole that allows supercar and luxury car owners to register their vehicles in Montana to save on taxes could be endangered because of a new bill in the California legislature.

The workaround costs the Golden State some $20 million a year in lost tax revenue, according to the bill’s sponsor, Jerry McNerney, a Democrat from Pleasanton. Montana has no car registration fees or state sales tax, allowing car buyers to set up shell companies to register cars there and avoid taxes in their home states. The loophole is well-known among car collectors, which is the reason why one often sees Big Sky Country license plates on cars at shows in many places that aren’t Montana.

“The Montana Loophole is widening, with increasing numbers of tax evaders creating bogus shell companies so they can avoid paying sales taxes on Ferraris, Porsches, and pricey RVs, costing California tens of millions in revenue,” McNerney said in a statement.

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