The Legislature approved SB 1406 to close a tax avoidance strategy in which Californians create shell companies in Montana to purchase and register cars, pickups, yachts and recreational vehicles with no sales tax while using them in California.
Bloomberg Tax News · August 27, 2026
California lawmakers are moving to shut down a tax maneuver that luxury vehicle owners use to avoid paying state taxes. The Assembly Wednesday approved a bill (SB 1406) by Sen. Jerry McNerney (D) to close what’s known as the “Montana loophole,” where