California cracks down on 'Montana license plate loophole' and recovers $4,000,000 from thousands of exotic car owners and dealers
Published on Mar 10, 2026 at 3:59 PM (UTC+4)
by Ben Thompson
Last updated on Mar 10, 2026 at 3:59 PM (UTC+4)
Edited by
Emma Matthews
As a result of cracking down on a ‘Montana license plate loophole’, California has recovered $4 million from exotic car owners and dealers.
Some people have been getting their cars plated in Montana, in a bid to avoid state taxes and registration costs.
But the Californian government is cracking down on it, with criminal charges being brought against 14 people.
All in all, this investigation pinpointed 500 dealerships in the state that had facilitated 2,500 fraudulent sales.
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California is cracking down on the ‘Montana license plate loophole’
You may be wondering – why are California drivers registering their cars in Montana?
The state’s lack of sales tax has made it a massive draw for supercar owners.
If you were to get a $500,000 car with an 8.53 percent sales tax – like you’d see in New York – you would be burdened with a sum of $42,650.
But while saving money is something many of us would desire, following the law is paramount here.
And that’s why the California Department of Tax and Fee Administration and the Department of Motor Vehicles are cracking down on this practice.
The two agencies released data on the state’s three-year enforcement campaign.
That operation has seen $4 million in unpaid taxes and fees recovered from car owners and dealers who engaged in the Montana license plate loophole.
Fourteen people have had criminal charges brought against them, including conspiracy to commit tax evasion, filing false sales tax returns, money laundering, and perjury.
The defendants are alleged to have arranged $18.8 million in vehicle sales, with $1.6 million in unpaid taxes.
In text messages, reported by Bloomberg, the defendants allegedly discussed tax-free transactions involving Ferraris, Aston Martins, and Lamborghinis.
“70k saved – I can’t believe the registration lasts for 5 years – that’s crazy. Stupid California,” one defendant allegedly wrote to his wife.
“Paid 3k to own a 600k car for 5 years – lol in Cali that’s like 75k for 5 years. Hella dumb.”
The Golden State isn’t slowing down in its efforts to impede people exploiting this Montana loophole.
We’re seeing more states cracking down on car-related crime
In recent years, we’ve seen a lot of different US states getting strict on car-related crimes.
Down in Florida, a Super Speeder law came into effect, which jailed drivers who were either 50mph over the legal speed limit, or anywhere in excess of 100mph.
In Missouri, state troopers deployed ‘ghost graphics’ to catch unaware speeders.
And even teenagers aren’t spared from the long arm of the law – in Tennessee, young drivers risk losing their license if they’re caught bullying.
No matter where you live, you have to obey the law.
And remember – ignorance of the law is no excuse.
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Following stints at LadBible, The Sun, The New York Post, and the Daily Mail, Ben joined the team full-time in February 2025. In his role as Senior Content Writer, his sparkling copy, the ability to sniff out a good story at 100 paces, and a GSOH quickly led to him becoming an integral and invaluable member of the writing staff.
