The Infamous Montana License Plate Loophole Has Been Closed in California

Montana’s reign as a tax haven for California-based car owners is coming to an end. On Wednesday, September 30, Governor Gavin Newsom signed SB 1406—a bill which California state senator Jerry McNerney (D-Pleasanton) introduced earlier this year—into law, and thus expanded California's definition of a resident to include shell companies owned by Golden State residents.

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"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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