California, Utah, Georgia and Tennessee are cracking down on Montana license plate loophole to try and recover millions of dollars
Published on May 19, 2026 at 6:22 PM (UTC+4)
by Ben Thompson
Last updated on May 19, 2026 at 6:22 PM (UTC+4)
Edited by
Mason Jones
California, Utah, Georgia, and Tennessee are taking action to crack down on the infamous Montana license plate loophole.
The Big Sky State is notorious for having the most registered vehicles per capita of any state, with 10,000 supercars registered there.
This is because the state has no sales tax, no emissions inspections, and permanent registration for vehicles older than 11 years ago.
Out-of-state luxury car buyers want to take advantage of this, but more states are taking action to try and recover the lost millions.
How states want to crack down on the Montana license plate loophole
Across more and more states, a growing response to the Montana license plate loophole is gaining traction.
In Utah, a law has been passed in which license plate readers will find violators and force them to pay back-taxes, alongside a 100 percent penalty.
So that’s essentially the taxes twice over – ouch.
In Georgia, toll-tag tracking, insurance database reviews, and dealer audits are being rolled out.
And it’s a similar story across the country, with Missouri, Wyoming, Illinois, and Indiana all taking action.
More high-profile incidents involve the YouTuber WhistlinDiesel, who was arrested in Tennessee for evading sales tax on a Ferrari F8 Tributo.
But if you were looking for a state that is going hard on this Montana license plate loophole, you’d be hard-pressed to find one taking it as seriously as California.
How California is tackling the issue
Since taking on the loophole, California has recovered more than $4 million for exotic car owners and dealers.
In addition to this, fourteen people had criminal charges brought against them, including conspiracy to commit tax evasion, filing false sales tax returns, money laundering, and perjury.
The state has set up a program for residents to report neighbors with out-of-state registrations.
And then there’s SB 1406, introduced by Jerry McNerney, a California senator.
Under this bill, Californians would be barred from creating an out-of-state shell company to buy cars in Montana.
“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,” Sen. McNerney, who is chair of the Senate Revenue and Taxation Committee, said.
“SB 1406 will close the Montana Loophole for good and restore much-needed state revenues to fill potholes and make other essential road repairs.”
There’ll undoubtedly be more states following suit with similar measures in the months and years to come.
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.
