"Montana at one time was heaven for car enthusiasts. The Treasure State is known for having very scenic driving roads, such as Beartooth Highway, the Lake Koocanusa Scenic Byway, and the various roads in Yellowstone National Park. Also, until recently, Montana had a very lax speeding law which led Car and Driver Magazine to call it the autobahn of America."
"But today, people who purchase expensive cars are getting Montana license plates not for its scenery or its once liberal speed laws. Instead, they are getting them to avoid sales taxes and emissions rules in California and other states. This was typically done by forming a Montana limited liability company (LLC) wholly owned by a California resident which would then purchase the car."
"The California Department of Tax and Fee Administration (CDTFA), the agency responsible for collecting sales taxes, has announced that, in conjunction with the DMV, they will be cracking down on auto dealers who help buyers living in California obtain Montana license plates."
Montana was historically attractive to car enthusiasts for its scenic roads and extremely lenient speeding laws, with fines as low as $5 until 1998. Today, wealthy car buyers are obtaining Montana license plates not for these reasons, but to avoid California sales taxes and emissions regulations. This scheme typically involves creating a Montana LLC wholly owned by a California resident to purchase and register expensive vehicles. The California Department of Tax and Fee Administration and DMV are now targeting auto dealers who facilitate this tax evasion. California has already charged 14 people with tax evasion related to obtaining Montana plates specifically to avoid sales tax obligations.
Read at Above the Law
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