California Cracks Down ‘Montana Loophole’
(Getty/artas)
Californians cruising in luxury cars with Montana license plates could be in for a surprise. California is cracking down on the so-called “Montana Loophole,” according to the New York Times. Fourteen people have already been charged in the investigation, which revolves around what Auto Blog calls Montana’s “unusually relaxed approach to sales and registration taxes.” The state, which has no sales tax, allows out-of-state residents to buy and title vehicles there.
The charges in California include conspiracy to commit tax evasion, filing false tax returns, money laundering, and perjury. Court documents reveal text messages in which participants boasted about tax-free purchases. Investigators say hundreds of California dealerships were involved in over 2,500 sales to supposed Montana residents—even though high-end vehicles like a $1.8 million McLaren Elva and a $1.5 million Porsche 918 Spyder were delivered, driven, and kept in California.
Authorities are now examining all Montana-linked sales and using license plate readers to catch potential violators. This crackdown is part of a broader effort targeting cars registered in other no-sales-tax states, including Oregon and New Hampshire. California officials say the newly charged drivers may have avoided roughly $2 million in state taxes.
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