The enthusiast, and well heeled, community is pretty clued in on the “Montana license plate loophole” scheme. The gray area that enables rich, crafty, people to register their supercars and hypercars to a shell LLC formed in Montana instead of themselves personally in their home state. The reason? To skip paying sales tax and registration fees, also known as tax evasion, kids.
It’s legal, but not kosher. And to do it right one must follow a specific set of steps in a specific order, be tactful in doing so, and have some patience. Not everyone is, and the California Attorney General’s office released a 56-count complaint that charged 14 people with various levels of “conspiracy, filing false sales tax returns, failing to file tax returns, perjury, and money laundering.” But this isn’t new. It’s just the latest situation. In November, YouTuber Cody Detwiler, who goes by WhistlinDiesel, was arrested over claims of tax evasion in Tennessee for the same situation. For many, this entire thing is known as the Mercedes-Benz G-Wagon Write Off playbook.
The latest episode of The Drivecast dives into the controversy surrounding the Montana license plate loophole situation. How this open secret in the car world works, why it’s technically legal under Montana law, yet fraud in the states in which these vehicle owners actually live, the unfolding legal situation in both California and recently with WhistlinDiesel, and why other states haven’t been able to tie the knot around this loophole to date.
First time here? The Drivecast is our weekly podcast giving you a behind-the-scenes look at the biggest stories, controversies, and characters shaping the automotive industry and the way our roads look today. Powered by The Drive’s inside access, the show takes you through our original reporting, shares our exclusive insights, and expands on those stories in ways that aren’t possible with just one article.
You can listen to a new episode of The Drivecast every Wednesday on Spotify, Apple Podcasts, or Amazon Music. Love what you hear? Hit us with a five-star review to help get The Drivecast in front of more people. Have a suggestion, request, or feedback? Drop us a line at feedback@thedrive.com. We read every email.
Full Transcript
Kyle Cheromcha: OK, Andrew, you have three, four, five cars. I actually don’t even know. How many of them are registered in Montana? Be honest.
Andrew Collins: None registered in Montana. If you count lawnmowers and buggies, I think we have six or seven vehicles here, but they’re all locally tagged.
Kyle: And you’re a good person. You live in New York, you’re paying New York registration fees, sales taxes. Do you see Montana plates around you? Because I see them all the time out here, but I’m a lot closer and California’s got a lot more people, a lot more cars, and a lot more rich people.
Andrew: Yes. Well, I live in a rural part of New York, so I don’t see all that many. But not zero. I ran into Amanda Seyfried in a coffee shop here once, so we do have rich people. No, she was not on Montana tags. But I have seen them a time or two, definitely.
Kyle: It’s this weird experience when you’re in traffic, or at a car show, and you see a really cool car, a supercar like a Koenigsegg or some weirdo JDM import, like a Delica van, and you’re like, “Oh, that’s really awesome. Let me go take a look.” And then you notice it has a Montana plate on it and you’re like, “Ehhhhh okay.” There’s a judgy feeling that takes over.
Andrew: And it’s been going on for decades. I mean, I remember seeing this before knowing even all that much about cars and thinking, “Wow, that Porsche really drove a long way from Montana. That’s so cool.” But I mean, even if you just casually Googled this, you could find blogs going back. I think I remember seeing a DeMuro blog post in, like, 2012 or ’13 explaining why you see a lot of hypercars with Montana tags. It’s been an open secret for a long time, for sure.
Kyle: It has been. And that’s the funny thing about this case, it really has just taken over national news, and everyone’s like, “Oh my God, did you know this? ” And people in the car world are like, “Yeah, we’ve seen it for a long time, guys.” Also, it’s a good note you just made to all those people listening out there. You see a car plated with an out-of-state plate. Yeah, you’re often like, “Oh wow, they drove a long way.” I see a Massachusetts plate out in California, I’m like, “Wow, that car drove across the country.” If you see a Montana plate, chances are not zero-to-decent that that’s tax fraud.
And the weird thing is, it’s a license plate. It’s on the outside of the vehicle. Everyone can see it. You would think the people who enforced the laws here could see it too, but it’s surprisingly hard for state enforcement to actually catch people using this law fraudulently. It’s just kind of mind-boggling that it’s like a giant sign on your car that says, “I may have dodged my taxes.” And yet it takes a massive enforcement like this California case for it to become known to a lot of people.
So give me some background on this loophole. I know it’s been happening for a long time. The law’s been on the books in Montana for quite a while, but it’s come to prominence. And so how does it work?
Andrew: Yeah. So the short story is somebody sets up an LLC in Montana and then instead of personally buying the car, they have the LLC buy the car. And since there’s no sales tax, that’s no problem. And the LLC basically gets around you having to have a residence in Montana. That’s as far as their registration requirements go. So then it’s just a matter of putting the LLC’s name on the title and Bob’s your uncle, you’re off to the races.
Kyle: So you don’t need to live in Montana to set up an LLC. You can just send a form in and suddenly you got a business in Montana.
Andrew: Yeah, that’s correct. Some of the earliest kind of public usages of this license plate loophole, so to speak, are with RVs. So I think it kind of gained popularity as people who wanted to live in their RV full-time and didn’t have a place to live and needed somewhere to figure out how to get a license plate. We’re like, “Well, shoot, what do I do?”
And then some of these little cottage industries started popping up where they would do the dirty work, the hard work for you, and do all the paperwork and set it up. And I think people started to get wise to that, and someone put two and two together and was like, “Hey, if I register my $1.5 million Porsche 918, I save like $100K on Cali sales tax.” And then these companies started advertising that as a feature as well.
And since it’s technically legal, as long as you tick a certain box and do a few little maneuvers, which we’ll get into with this podcast, people start doing it more and more.
Kyle: It’s a feature, not a bug. And we are not here to give you a guide to how to do this. If you want to look it up, there are plenty out there, which is one of the ironic things about this whole situation is that there’s a lot of signs out there in the world if you’re looking for them that this is okay and you can do it no problem. Anyway, you set up an LLC in Montana or you pay someone to do it, which it’s like a thousand bucks, right? A thousand, $2,000 to set that up.
Andrew: You can do it on your own for considerably less money, but yes, there are a lot of little cottage industry businesses that will do it for about a thousand bucks.
Kyle: So you do that yourself or pay someone to do it. And then you have, I Hate Sales Taxes LLC registered in Missoula, Montana, and then you buy the car through the LLC, register it through the LLC. I assume there’s some, the LLC has an address or a PO box or something that makes it technically based in Montana.
Andrew: PO Box, yeah.
Kyle: And then that’s it, right? Or are there any other stipulations or hoops that these people have to jump through in order to technically follow the law to a certain point?
Andrew: So there are a couple. One thing is insurance. Insurance is kind of a gray area in of itself in this. Some will say that insurance will insure your car wherever it’s docked versus where it’s registered, but that can be a bit … it kind of depends on your policy and who’s insuring you because your car’s meant to live in a certain spot to qualify for insurance, because that’s part of the way they price your insurance is where your car lives. And there’s also whatever state you’re driving in has its own rules about cars being there for a certain period of time under certain tags. So for example, like here in New York, when I drove my cars here from California, technically you have three months to change tags over. The LLC sort of shields you from this because the laws are a lot murkier for commercial entities.
Like you look at, like big rigs, tractor trailers, they’ll have permanent license plates that are … Like U-Haul, all its vehicles are tagged in Arizona, and a lot of them will never go to Arizona. So it’s just like that corporate shield kind of protects the individual from trouble. But I think if they were in any kind of, like accident, I do think there would be a lot of problems legally speaking.
Kyle: And what’s this … I’ve heard about storage facilities in Montana that hold people’s cars for some reason. Is it like a cooling-off period that they have to be in Montana for a certain amount of time?
Andrew: Yeah, sort of. So, specifically talking about California versus Montana is, if you’re trying to be as legit as possible, you would not be able to bring the Montana-purchased car into California for 12 months. Now, why the rule is that? I don’t really know. It’s just, I think it’s they’re trying to disincentivize.
Kyle: Just a little bit harder, a little more friction.
Andrew: And that actually brings us to this case that we’re going to be talking about and why these people got in trouble. Or one of the reasons they were able to get in trouble is because they were faking the forms, saying where the car had been. It’s called the bill of lading. So that talks about bringing the car in on like a container truck for shipping and these dealers and buyers were allegedly falsifying those documents to say the vehicle had been in Montana for X period of months and then bringing it in when in reality the vehicle never was. So that was why these folks got caught basically.
Kyle: So it’s like, ironically, it’s like catching Al Capone on tax charges when he’s a murderous mobster and a bootlegger because if they had done the cooling off period and then drove the car in California as if it was their own car with a Montana plate, they’d still be breaking the law because the car would be living in a state where it’s not registered for longer than the grace period allows. But one of the big things that they got caught on was the fact that they faked the cooling-off period. So if they had done the cooling-off period properly, they might have been able to get away with it.
Andrew: Yeah. Or at least gotten a much lighter wrist slapping from … I mean, the charges from the AG are pretty scary. I mean, they’re saying failing to file sales tax is one thing, but like perjury, money laundering. I mean, these are like actual felonies that are really going to … Are not good. So yeah, I mean, dirty tags, it sucks, but like perjury, that’s not good. It’s not a good one.
Kyle: This case involves wealthy individuals buying cars that are $1 million, $2 million. I mean, you got Porsche 918 Spider, McLaren Elva, Ferrari F12tdf, Lamborghinis. These are very, very, very expensive cars. But this loophole is also used by people buying less expensive cars, right?
Andrew: Yeah. I mean, if you’ve got something like a Nissan Skyline, some weird import, or even some car that can’t get through California emissions, then maybe this is a workaround, or you live anywhere you don’t want to pay taxes. I mean, we could go on a whole other tangent here. There are prudent reasons to set up an LLC to shield yourself from various legal things, but yeah.
Kyle: I mean, I will say as someone who lives in California, emissions testing is a burden. And the fact that they emissions test cars going back to 1976 every two years, like cars not passing smog can be a death sentence in California. And the actual level of emissions that comes from a very, very small number of old vehicles in that classification, that is much, much, much smaller than the pollution coming from the millions and millions of newer cars on the road.
And so if you are looking at that calculation and thinking, okay, what I’m about to do is technically illegal, but by the spirit of the law, I’m not adding to the state’s emissions in any meaningful way by doing this. So I might as well register this car in Montana where they don’t have emissions testing. Or like you just said, if you’re importing a car from another country that has, there’s no way to make it compliant with California’s emissions rules, well, that’s what Montana’s for.
Andrew: Yeah. I definitely have mixed feelings about this, and I do think it’s a gray area. I mean, I know it’s the internet in 2026, and everybody has to be black and white about everything, but I think dodging taxes on a luxury bauble is one thing versus trying to get by in like a wacky car that doesn’t get used that much. That’s another. And it’s effectively impossible to write a law in such a way that it makes that enforceable. But there’s shades. There’s shades, definitely.
Kyle: When a loophole exists, anything big enough to fit in it will fit through it. There’s no way to filter the cool enthusiasts who just want a cool car and the rich people who don’t want to pay taxes. Why does Montana do this? What is the benefit to them? I mean, they’re just pissing off every other state, it seems like.
Andrew: Yeah. Well, Montana’s not going to close the loophole because they do get some money from these registrations, and they’ve got all these little businesses that exist keeping it going. They have absolutely no incentive to shut it down. I mean, as far as they’re concerned, yeah, everybody’s in compliance with registering businesses here. So Montana’s got no reason to shut it down.
However, one thing where I think ultimately is what’s going to end up happening is like an interstate data sharing program. Montana has a deal with Utah, for example, because California’s not the only state with this issue. You see Montana tags all over the country in this way. So Montana and Utah now share data on residency and LLC registration. And not to go on a whole other tangent about how that works, but they have a mechanism to figure out if you’re actually legitimately operating a business in Montana or if you’re just trying to dodge registration taxes.
Kyle: I wonder why Utah got that sweetheart deal.
Andrew: Right. I mean, just think about the complexity of California’s government versus Utah’s government. I mean, Utah’s just got way less shit to worry about, candidly speaking. I mean, so they don’t have bigger fish to fry like California does.
Kyle: I suppose that’s true. So speaking of fish frying in California, let’s talk about the specifics of this case. In the announcement from the Attorney General’s office, they pointed out that they’re losing $10 million a year. So how did this case emerge? How long have they been working it? And just give me an outline of what these people did.
Andrew: Yeah, for sure. So California’s been … The California Attorney General and law enforcement has been looking at this for a while. They’ve got a task force called True, that’s an acronym, T-R-U-E. It’s the Department of Justice’s Tax Recovery in the Underground Economy. That’s what it stands for. It sounds like a Jackie Chan movie, but it’s real.
So, since 2023, so they say, so the AG says, they’ve identified close to 500 dealerships involved in 2,500 suspicious sales. So they just say suspicious and that they’re kind of keeping an eye on. And the way they were basically able to catch this particular batch of individuals is mainly what we were talking about earlier is falsifying the bill of lading, which is basically a document that describes where the car has been shipped to and shipped from.
And the short story is a handful of dealerships and some big-name ones, a Ferrari store, a BMW store, like not just rinky-dink sketchy shops were falsifying that cars had been in Montana when they weren’t. They were here in California. And while the AG did not say specifically how they got the text messages, that’s probably a whole other justice podcast, but there are a lot of very damning back-and-forths.
And I’ll throw all the allegedlys out there that are necessary, but I mean, they shared text messages from people being like, “Can you get my fake signature?” It was not clandestine at all. So once they had that, I mean, there haven’t been convictions yet, but I got a feeling some people are definitely going to be getting in trouble.
Kyle: And we’re going to put a link to the complaint in the show notes because it is really worth a read in full. The text messages, especially from these people, are hilarious. It’s really funny to see stuff like this in a formal legal document because the juxtaposition of the vocabulary and in seeming intelligence of some of these people with the very standard legalese of the charging document is kind of hilarious.
I’m just going to read a couple. “70K saved. I can’t believe the registration lasts for five years. That’s crazy. Stupid California paid 3K to own a 600K car for five years. LOL in Cali, that’s like 75K for five years. Hella dumb.” Let’s see another one here. “Don’t want the state of California to know anything about this car.” Yeah. Well, they do now, that’s for sure.
Andrew: I know. I know it’s great. My favorite one was, “Am buying car. Need to do Montana thing. Wout. He is awesome!!!!” I don’t know why rich people can’t communicate through text. Lost art, I guess.
Kyle: We learned all about this in the Epstein files. The emails of the world’s most powerful people read like something a fifth grader would write. I don’t know what’s going on there. A psychologist would have a field day with this.
And here’s another back-and-forth that I love between two individuals. Apparently, one is an owner, one’s a dealer. “Do you have any customers with Montana plates?” “Yeah, a few.” “Have they had any issues?” “Not yet, but they are always paranoid LOL”. Guess when you break the law, you have a reason to be paranoid. Man. “Have any of them been pulled over and gotten a ticket RE Montana plates?” No answer. Well, there you go.
Andrew: Yeah. And again, it’s just like it’s … If you were setting up a business and running a business out of Montana and then driving your car to California, that’s fine. But if you’re really just trying to save money on a car as dumb as a Mercedes GLE, it’s just not cool, man.
Kyle: Breaking the law is only cool if it’s for a cool thing. Exactly. That’s the message of the story here. So they went after both owners and dealers?
Andrew: Yeah, both. They haven’t said X, Y, Z dealership is being closed because of this. They’re just talking about individuals. So there’s one guy who is on the sales side and then a bunch of people on the purchasing end. And I’m not going to say any names here because I don’t want the dang mafia coming to my house, but yeah, that’s basically, it’s individuals that they’re going after at this point.
Kyle: I’m curious for your thoughts on this. I think like many bad behaviors, let’s put it, social media has really blown up the spot because like you said, there have been stories about this for the last decade, like this is an open secret, but it seems like it’s been the past, I don’t know, three, four, five years that we’ve seen more commentary on this, a couple more cases like this coming from other states, and now it seems like there’s a whole group of people out there learning about this for the first time with this California indictment. I think social media has a lot to do with it because it shows this possibility to a much wider group of people than would’ve learned about it through their own dedicated research or word of mouth. And there’s a lot of people on social media with a lot of money and a lot of money floating around, and people want cool cars because that’s how you get followers and clicks and subscribes. And so there’s just a lot of incentive built into our current media environments to take advantage of something like this. I don’t know.
Andrew: Yeah. It’s both to take advantage of it and to kind of put a target on your back, to be honest, because I think people who aren’t in the know see a photo of like a hypercar with a Montana tag, and I think a lot of people’s first reaction will be, “Oh, that’s weird.” There are plenty of wealthy people in Montana, but I think it is not a state that people associate with, like, a Ferrari F8 kind of thing. So yeah, it’s eye-catching in that sense. And so that kind of stops people in their tracks a little bit, makes them want to look into it.
And yeah, if you’re of the tax dodging persuasion, then you’re like, “Oh, how can I get this set up?” But the other side of the coin is if you are the opposite direction and you have more of an eat-the-rich mentality, and you see, now you know about this, you’re going to have one more thing to be grumpy about.
Kyle: Yeah, they’re not grumpy enough. It’s also striking how, if you just Google it, how do I register my car in Montana? There are no shortage of sites that will guide you through it. I mean, we talked earlier about the businesses in Montana that exist who actually go through the legal steps of doing the LLC and getting the car registered and like helping you with everything on the ground there. But like I just, before we started recording this, I was just Googling around to see what I could find. And I came across this site, webuyexotics.com, which is a place that basically buys your exotic car. It’s where you can sell your car either to them or on consignment or whatever.
And they have a whole section on their site called registering a car in Montana, pros and cons. Pros, you don’t pay a bunch of money. You save a bunch of money on sales tax. They don’t have sales tax. You don’t have to do missions testing, da, da, da. Cons. Well, it’s illegal. No, actually there’s a subsection, is Montana car registration legal for non-residents? “In short, it depends.”
And so it depends on if you’re actually using the law as intended or whether or not you’re just trying to dodge your taxes. It’s one of those things that there’s a whole bunch of signs out there. If you are not thinking too closely about this and you have a lot of money and you just want to do the thing you see other people on social media doing, you come across a site like this and you’re like, “Oh, okay. There’s a whole guide to this. Oh, I’ll do this. ” There’s not much out there signaling this is illegal unless you read the actual laws of your state.
It kind of reminds me of the Mercedes G Wagon loophole. We actually did a YouTube video about this last year. So there’s a section in the US tax code that allows small business owners to deduct the purchase of equipment, including a car, from their income, even if they’re only putting a fraction of that down and financing their rest. So you buy a $50,000 piece of kit, you only put $5,000 down, you can deduct $50,000 from your income and therefore pay less taxes. And the qualifications for a road vehicle there, it has to have a gross vehicle weight rating, total payload and cargo in the vehicle itself, how much that weighs between 6,000 and 14,000 pounds and be used 50% for business.
The Mercedes G Wagon falls under that category and there’s no real way to prove how someone’s using that car for 50% business, 50% pleasure. There just isn’t. And there’s been some enforcement of it. And so there’s paper trails that can be cobbled together to make that case, but there are lots of people also doing that and taking advantage of that. And the G Wagon just happens to be one of the most expensive vehicles that still falls under that classification that you can do this with.
And there is, like with the Montana loophole, a whole cottage industry of accounting firms, I don’t know if law firms are actually doing it, but I have seen law firms with pages on their site explaining, “Hey, this is how this works. These are the pros and cons.” Again, pros and cons. But the bottom line is it’s another situation where there’s a law that was set up for a specific purpose. It’s being used for something very counter to that purpose by people who probably can’t afford to not take advantage of this loophole. And there’s really no practical way to enforce it in a way that would stop people from doing it.
Andrew: Right. Especially now that it’s easier than ever to say you have a business. I mean, all you would have to do is, “Oh, I’ve got a modeling business. Here, take a million pictures of me in front of this car and then boom, there’s your business.”
Kyle: So this is probably the most coverage that one of these cases has gotten, but it’s not the first time that a state has gone after people. There was a case in Georgia a few years ago. And then last year there was the case of the YouTuber WhistlinDiesel who has 10.5 million subscribers on YouTube and is known for being a destructive individual. He makes very wacky-looking projects and buys cool cars and then just destroys them in, I will say, very creative ways.
But he was arrested and charged with felony tax evasion in, what is it? Tennessee, I believe, is where he lives. And it was the same thing. It was because the Ferrari, it was a Ferrari F8 Tributo in question that he bought for the purpose of destroying on his YouTube channel, I should say, he bought it through Montana and the state came after him and actually arrested him. And then it turned into a whole “the government’s cracking down on my favorite YouTuber!” thing. And the reasons behind the case became less of the story than the fact that it happened to him, but it was the same thing that netted these owners and dealers in the California case. So why do you think this California case is making an impact that all these other ones haven’t? Is it just the accumulation at this point?
Andrew: Yeah, I think they’ve basically finally got a big fish, right? They said they’ve been sniffing around for the last two to three years, and they’ve probably been working on this for a while, this particularly big bust. So I think, yeah, it’s made a big splash because the law enforcement has had time now to think about it and figure out how to nab people.
Kyle: Honestly, if you look around on forums, on social media, on comments and articles on the drive, there’s a lot of indignant responses to when a case like this breaks. I mean, there’s a lot of people who are like, “Fuck those rich guys, go after them, get them.” But there’s a lot of people who I assume aren’t using this loophole, aren’t registering their cars in Montana. They like that you can, I guess, they like that people can, and they don’t like the idea that a state is trying to claw back tax dollars that they never had in the first place. It’s a surprisingly polarizing reaction, I think.
Andrew: Yeah. Well, we see a lot of that in our society now, right? A lot of people on the lowest end of the economy, for some reason, bandstanding for the highest richest people. It’s a strange phenomenon. The WhistlinDiesel case, I have kind of mixed feelings on because it’s like, well, he was doing a business thing with the car. It’s like, maybe he was OK.
Kyle: He wasn’t in Montana, but he actually had a business in a way that a lot of these people don’t.
Andrew: Yeah, exactly. So I saw that, and I was like, actually, he was closer to legitimacy than a lot of these other guys. But yeah, obviously, he’s kind of a victim of his own success. He’s so high profile that I think that was a big part of the reason.
Kyle: And that was his argument. “They came after me because I have a following, and they can make an example out of me, and they’re going to regret that.” And I’m sure many, many of his followers, possibly millions of them, took to the internet to rail against the state for coming after him like this and for trying to just enforce the law, frankly. But you make a good point that the fact that WhistlinDiesel, Cody Detwiler is his name, if he can make a somewhat convincing case that he was close to or following the law because it was purchased for a business reason, that to me just speaks to how confusing this all continues to be and why there’s such a range of opinions and beliefs about the legitimacy or propriety of the law because none of it’s clear. None of it’s clear.
Andrew: Our whole country’s run on vague enforcement of laws. I mean, think about speed limits. Does everybody go exactly the speed limit? Absolutely not. And yet some people get pulled over. That’s just the way that our systems work. It’s weird, but there’s following the law and then there’s not. And then there’s a huge area in between of, I’m just going with traffic, and you can fly under the radar almost indefinitely that way.
Kyle: As long as there’s enough traffic, and it does seem that there is enough Montana plated traffic out there that you can easily slip by until … I’m sure some of these people in California were quite surprised to be indicted, especially the owners themselves, not the dealers, because they know what they’re doing. The owners, you could make a case, as I’m sure some of the defense attorneys will, that they thought what they were doing was totally fine because this whole system exists to enable it. So why wouldn’t I do this? What’s the problem guys?
Andrew: And it’s going to be really interesting to see what does end up happening with what these lawyers argue. I bet we’ll get some press releases from them, too. So we should pay attention to that. They do have the potential to set some precedents. If it goes the law enforcement way, maybe they’ll get like a interstate DMV agreement like they have with Utah. And if not, then maybe it won’t matter as much anymore. I have mixed feelings about it. I mean, it is like, well, there’s 50 states. Why do you have to … Can’t you just pick whichever ones you want to follow the law of? But obviously, that’s not a prudent way to run society.
Kyle: It makes it tricky. The patchwork of laws in this country, it comes back to bite us. It does have some upsides for sure, but it does also come back to bite us and makes coming together on what should be a simple thing of like, “Hey, if you live in a state, you should probably pay that state’s sales tax. And if you don’t want to pay sales tax, you should live in a state that doesn’t have it. ” This gets all muddied.
Andrew: Yeah, it is. And it’s like you were saying with the emission stuff, it’s like high pollution old cars are such a tiny fraction of the problem. So it’s tough to really write these laws in a way that makes sense for absolutely everybody. To me, somebody buying an exotic luxury car, I mean, yeah, pay your state taxes. There’s no reason not to.
Kyle: And if you can’t afford to, don’t buy the $200,000 car. Buy a different car. Someone who is good at the economy, help me budget this, my family is dying. Because it’s like, if your financial stability is make or break on paying the registration fees on the really expensive car that you just bought, what are you doing? What are you doing?
Andrew: Right. Should I feed my family or register my Porsche 918? Somebody, please help me. I can’t figure it out.
Kyle: OK. So Montana, we touched on this earlier, but just to put a fine point on it, Montana has no incentive to do anything about this. I would be curious to see the emails. I assume there are emails between whoever in Montana, I know the governor’s office, state legislators, people at the DMV, people in charge of making this happen on their end, and these other states that are like, “Guys, that’s our money. What are you doing?” But I mean, I don’t know what kind of pressure any other state could put on Montana to do something about this. It doesn’t seem like there is.
Andrew: Yeah. I don’t know about pressure. I think it would have to be more of an incentive. It’d be like, “Hey, we’ll cut you some money if you can help us rat out the right people. ” I mean, because yeah, what’s California going to sanction from Montana? But yeah, so it might have to be honey rather than vinegar. So the real question is, are these tax leniency laws actually helping any businesses run or what problem? Well, who knows?
Kyle: After however many years of this, it pretty clearly is Montana’s like, “Well, we make a fair amount of money off this, so why not keep it going? Why not keep it going?” And also, I’m sure because Montana has a fairly decent number of people with second homes there, the idea was, well, if you live somewhere else, but Montana’s your second home, you can register your Montana car here through an LLC. And even if you only spend a month out of the year here, the car’s registered here, and you don’t have to deal with an out-of-state plate in Montana or take the car back and forth.
So there are reasons why this law could exist and makes sense on some level, but the potential for abuse is obvious and proven, and I don’t think there’s any way to have this law exist in its current form without this continuing. I just don’t see it being closed.
Andrew: Isn’t it kind of ironic that a lot of people will buy these exotic cars as a flex, but then they have this very obvious, “I didn’t want to pay money stamp on the very same bauble of personal flexing.” I find that kind of fascinating. It’s like, if you buy Laborganis, I mean, one and only reason to buy such a car is to advertise your wealth, right? But then you also have a Montana tag and it’s like, “But I don’t want to spend this money, but I want to spend this other money.” It’s just so goofy and dumb. Our society’s terrible.
Kyle: That’s what the Montana plate says. “I have enough money to afford this, but I don’t want to give any of that back to this state, guys.”
Andrew: Exactly. And there are so many people who will cheer for it too and be like, “Yeah, good for you for taking all of that money and not letting anybody not spreading the wealth at all.” It’s like people just do not get it.
Kyle: I’m sure there are people listening to this thinking, again, it’s the law allows it and taxes are way too high anywhere, everywhere, all over the place and all methods and formats. So what does it really matter if this loophole exists? And you shouldn’t judge people for doing something that thousands of other people do. And again, there’s no real incentive to not do other than the fear of getting caught.
I don’t know. I’m not trying to get into an ideological debate about taxes. I just think that it is very clear and very obvious and direct connection that if you live in a state and drive on its roads, you should pay something to help with the upkeep of those roads and the infrastructure around it. And if your car is registered in Montana, you’re not, you’re just not. And if it’s a really expensive car, that means you can afford to. And it’s quite a juxtaposition.
Andrew: The real flex would be like living in Iowa and registering all your stuff in California and be like, “You know what? I’m going to pay extra tax.” No, but it is … Yeah, it’s a weird one. I mean, I see a lot of comments that are like, “Oh, it’s like, why would you give your money to the government? It’s all corrupt. So you should use this corrupt method of keeping your money from the government.” And it’s just like, okay, none of this makes any kind of sense.
Kyle: Well, that’s the world we live in. So I think it’s … We don’t know when the next wave of enforcement will come. As we said, California has teased it a bit by saying, “Oh, we got 500 dealers that we’re taking a close look at and we see all these transactions.” And so I think we can expect maybe sometime in the next few months, maybe later this year to see another case like this bubble up, but it’s a drop in the bucket, frankly. We don’t have exact numbers on how many cars are registered in other states to Montana and are floating around there, but it’s a fair number.
Andrew: Yeah. Well, maybe the best chance of changing the tide is just the court of public opinion. Just, you see a Montana tag at cars and coffee, ask him where he lives, see if he feels guilty about it.