by Many of us have encountered a strange situation while traveling. A car drives by or is parked with a Montana license plate, even though it is located thousands of kilometers away from that state. The owner most likely did not drive here across the entire country—they simply registered the car there to avoid paying taxes. Now some states are trying to combat this practice, which could bring them millions.
Montana has no sales tax and no mandatory vehicle inspections, making it a paradise for buyers of premium cars who want to save tens of thousands on registration. Due to a legal loophole, owners can establish an LLC in the state and register the car under it. The best part? You don’t even need to come to Montana—local companies are happy to assist wealthy clients with such schemes.
5,281 Ferraris and Many More
According to data, 2.3 million vehicles are registered in the state, with only 879 thousand residents—this is twice the national average. In 2024, 10,757 premium brand cars were registered in Montana: Aston Martin, Bentley, Bugatti, Ferrari, Lamborghini, McLaren, Pagani, and Rolls-Royce. Among them were 5,281 Ferraris, 131 Bugattis, 1,966 Lamborghinis, and 820 Rolls-Royces. For comparison, in Washington, where the population is seven times larger, only 2,479 cars of these brands were registered last year.
Other states are unhappy about losing tax revenue. Utah and California are already taking measures to reclaim these funds.
States’ Response: Utah and California Tighten Control
On March 25, Utah Governor Spencer Cox signed a law allowing the state to identify thousands of tax evaders, especially those who register their cars in Montana. Estimates suggest this could bring in $100 million in taxes, fines, and other fees.
“This is a real abuse of the tax system,” stated Utah Tax Commissioner John Valentine. “They pay nothing to support our state, only a small fee to Montana for the opportunity to avoid paying in Utah.”
California uses cameras to record cars with Montana plates for subsequent investigation. By law, a car registered in another state can be in California without paying taxes for only 12 months. Violators face fines, but wealthy evaders have found a way out—they send their cars to “tax jail.”
Yes, there are special places where cars are left for the required period—6 months in California, 90 days in Arizona. After that, the cars are “released” with new Montana plates and no tax penalties.
Montana’s Position
Montana legislators see no problem with this situation. “It’s great that in our country, 50 states compete to attract business—that’s exactly what our LLC law does,” said Senator Greg Hertz. “It encourages people to register their cars in Montana, helps them save on taxes, and creates jobs.” He is preparing a bill that will make car registration in the state even more profitable.
“A Montana LLC is a Montana LLC, and Utah or California have no jurisdiction over it,” emphasized Michael Willing, president of Deer Creek Corporate Services Inc., which has helped register over 50,000 cars for non-residents. “It’s important to remember that the federal government and states view LLCs as separate legal entities with the same rights and responsibilities as individuals.”
Undoubtedly, this legal gray area is becoming a subject of heated debate. Where is the line between smart financial planning and tax evasion? It’s hard to blame people for wanting to save thousands of dollars—most of us look for legal ways to reduce our tax burden. It’s just that some do it with expensive cars and a team of lawyers.
Perhaps the real problem lies with the legislators who left such a loophole. If the rules of the game allow such moves, it’s no surprise that someone uses them. But if you registered your Bugatti in Montana and drive it in Utah or California, be prepared for a visit from the DMV or a tow truck.
