From Motor1 · Anthony Alaniz · · 1m 10s
California Closes Montana Tax Loophole
California cracks down on Montana LLCs hiding luxury cars from sales tax.
In brief
California cracks down on Montana LLCs hiding luxury cars from sales tax. California's new law closes the Montana tax loophole by targeting shell companies that avoid sales tax on high-end vehicles. Originally reported by Motor1.
New California Law Targets Montana LLCs
California enacted Senate Bill 1406 to close the Montana tax loophole for high-end vehicles.
Montana Loophole Explained
Montana's lack of statewide sales tax allows out-of-state owners to buy vehicles without paying California sales tax.
Law Targets Shell Companies
The law includes shell companies with at least one California resident business member and imposes tax liability on individuals.
Evidence of Tax Evasion
Shell companies without business activity, physical locations, employees, or tax filings risk tax penalties.
California Loses $20m Annually
California estimates $20 million in annual tax revenue lost through the Montana tax loophole.
Senator McNerney's Statement
Senator Jerry McNerney said wealthy tax evaders used Montana LLCs to buy Ferraris and Lamborghinis to avoid California sales tax.
Tennessee Crackdown Example
Tennessee arrested YouTuber WhistlinDiesel for tax evasion using a Montana LLC to buy a 2020 Ferrari F8 Tributo.
The essence
California's new law closes the Montana tax loophole by targeting shell companies that avoid sales tax on high-end vehicles.
