California Ends Montana License Plate Tax Loophole

California has closed a long-standing loophole allowing residents to avoid sales tax by registering vehicles through out-of-state shell companies. The new law, effective September 30, 2026, expands the definition of a resident business to include partnerships and limited liability entities. It also holds individuals personally liable for unpaid taxes on vehicles registered through these companies. The change targets wealthy Californians who exploited Montana’s lack of sales tax and vehicle inspections.