The war against the Montana License Plate Loophole, explained
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Ever see a Montana plate on a supercar on the other side of the country? It probably didn’t drive all the way there. In fact, it’s probably tax fraud.
That’s thanks to the so-called Montana license plate loophole. Montana has no sales tax or emissions inspections for residents, but the loophole allows non-residents around the country to take advantage of that too. All it requires is setting up an LLC on paper in Montana, buying a car through it, and registering it in the state. Neither you nor the car ever have to set foot in the state.
If you’re buying a $500,000 Lamborghini, using the loophole can save you tens of thousands of dollars in sales tax and ongoing fees. It’s all perfectly legal in Montana, but very illegal everywhere else. Still, that hasn’t stopped rich people from doing it for decades.
It’s been an open secret in the car world, but earlier this year it burst into national news when California launched the largest crackdown of its kind on dealers and owners over illegal Montana registrations, charging 14 people with 56 counts of money laundering, tax evasion, and perjury. Yikes. And while you’d think wealthy people getting busted like this would make everyone chuckle, the reaction has been a lot more mixed.
So, we’re breaking down exactly what’s going on in the ongoing war against the Montana license plate loophole—how it works, how other states are trying to shut it down, and why people are still defending it.
Produced by → instagram.com/joeyrassool
Hosted by → instagram.com/kylecheromcha
Previous episode → youtube.com/watch?v=PXR1ah0D6B...
The Drive is the chronicle of car culture. We write stories you actually want to read. → thedrive.com
FOLLOW US!
Instagram → instagram.com/thedrive
Facebook → facebook.com/thedrive
TikTok → tiktok.com/@thedrive_official
WORK WITH US → youtube@thedrive.com
0:00 Intro
1:28 How the loophole works
3:41 The populist case
7:44 The crackdown begins
12:45 What happens next
Ever see a Montana plate on a supercar on the other side of the country? It probably didn’t drive all the way there. In fact, it’s probably tax fraud.
That’s thanks to the so-called Montana license plate loophole. Montana has no sales tax or emissions inspections for residents, but the loophole allows non-residents around the country to take advantage of that too. All it requires is setting up an LLC on paper in Montana, buying a car through it, and registering it in the state. Neither you nor the car ever have to set foot in the state.
If you’re buying a $500,000 Lamborghini, using the loophole can save you tens of thousands of dollars in sales tax and ongoing fees. It’s all perfectly legal in Montana, but very illegal everywhere else. Still, that hasn’t stopped rich people from doing it for decades.
It’s been an open secret in the car world, but earlier this year it burst into national news when California launched the largest crackdown of its kind on dealers and owners over illegal Montana registrations, charging 14 people with 56 counts of money laundering, tax evasion, and perjury. Yikes. And while you’d think wealthy people getting busted like this would make everyone chuckle, the reaction has been a lot more mixed.
So, we’re breaking down exactly what’s going on in the ongoing war against the Montana license plate loophole—how it works, how other states are trying to shut it down, and why people are still defending it.
Produced by → instagram.com/joeyrassool
Hosted by → instagram.com/kylecheromcha
Previous episode → youtube.com/watch?v=PXR1ah0D6B...
The Drive is the chronicle of car culture. We write stories you actually want to read. → thedrive.com
FOLLOW US!
Instagram → instagram.com/thedrive
Facebook → facebook.com/thedrive
TikTok → tiktok.com/@thedrive_official
WORK WITH US → youtube@thedrive.com
0:00 Intro
1:28 How the loophole works
3:41 The populist case
7:44 The crackdown begins
12:45 What happens next
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