California Slams Shut the Montana License Plate Loophole

California Closed the Montana License Plate Loophole

California Senate Bill 1406 became law on September 30, 2026, ending the shell-company trick wealthy residents used to register exotic cars in Montana and dodge sales tax. The old 50% business-location test is gone: if any shareholder, partner, member, or beneficial owner is a California resident, the whole company counts as one, and every asset it holds in the state is taxable. Officers and members can be held personally liable for unpaid taxes, interest, and penalties.