California Senator Introduces Bill to Close Montana Auto Registration Loophole for Good

California is continuing its crusade against the so-called "Montana Loophole," a tax evasion process used by many sports car and supercar owners in the Golden State and other parts of America. And this time, the state's officials are using legislation as their weapon.

On Wednesday, California state senator Jerry McNerney (D-Pleasanton) announced new legislation that would close the Montana registration loophole for good. The bill, officially known as SB 1406, would expand California's definition of who is a resident under state use tax law to include a shell company when at least one member of the business is a California resident. In other words, forming a limited liability company and registering your McLaren in Montana will no longer work if your primary residence is in California.

"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," said Sen. McNerney, chair of the Senate Revenue and Taxation Committee. "SB 1406 will close the Montana Loophole for good and restore much-needed state revenues to fill potholes and make other essential road repairs."

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