How California Closed the Montana License Plate Loophole

39 points by speckx 4 hours ago on hackernews | 62 comments

blagie | 3 hours ago

> “The bill would hold any officer, manager, partner, beneficial owner, or member of a shell company personally liable for any unpaid taxes, and any interest and penalties on those taxes, the nonpayment of which may constitute a crime, due on the purchase of a vehicle, vessel, or aircraft.”

Is dumb.

You want comprehensive enforcement with reasonable penalities.

You don't want draconian laws randomly enforced.

grvdrm | 3 hours ago

You are speaking deeply to me about leaf blower bans in my town. They are useless.

collabs | 3 hours ago

If it is a blanket leaf blower ban, that is indeed asinine. However, I will gladly support a ban on two stroke engines for leaf blowers the same way I support requiring drivers to wear seatbelts.

deathanatos | 2 hours ago

> If it is a blanket leaf blower ban, that is indeed asinine.

Uh … okay, it isn't immediately obvious to me why that would be. My landlords insist on (literally) weekly leaf blowing, regardless of season, and so every Thursday the air outside the apartment is quite literally unbreathable, as it is slaked with dust and exhaust, and literally unbreathable inside if I were to open a window (i.e., living here, I have to remember to always close the windows prior to Thursday). Not to mention the sound.

Banning the gas ones fixes a portion of the problem, I suppose.

I don't think I'd care as much if the cadence was something reasonable, like monthly. One bad apple spoils the bunch.

The electric machines are way less intrusive. Ok with them.

jacobolus | 2 hours ago

Gas leaf blowers are a menace to society that should not be allowed in any urban or suburban area. (If you want to use one on your farm or whatever, go for it.)

blagie | an hour ago

Gas leaf blowers shouldn't be banned. What's needed is banning of the outputs:

- Pollution

- Noise

Regardless of the source. If someone comes up with a magic silent gas leaf blower which doesn't pollute, that's okay.

jacobolus | 18 minutes ago

There are some unavoidable sources of noise, so I'm not sure a blanket noise restriction is going to work. If someone is doing home renovation and the contractor needs to run a saw for a while, it's just going to be loud. Sometimes someone needs to jackhammer up a slab of concrete, or chip up tree pruning debris. Etc.

But gas leaf blowers are easily replaced by a much less neighbor-hostile alternative.

Notice that I didn’t say “I love leaf blowers”

The ban is useless because the only way to enforce it is to catch it in the act (in my town). Basically impossible. So it is a ban that could be enforced (other ways) but instead is just a suggestion - and not one that most people follow because there are almost no repercussions.

trelane | 3 hours ago

> You want comprehensive enforcement with reasonable penalities.

> You don't want draconian laws randomly enforced.

This depends entirely on what the goal of the law is.

bluGill | 3 hours ago

I don't think it will hold up in federal courts. This seems to apply to cars that the company officer who lives and drives in Montana as well. If this only applies to cars used more than 50% in CA is would hold up. Of course truck drivers who mostly don't drive in CA but that is home may find an out with that plan.

Details are important and very hard to get right.

jmilloy | 3 hours ago

> If anyone running the business is a California resident (by the updated definition outlined above), then the whole business is a California resident, and any assets (including Lamborghinis and Bugattis) held in the state are subject to California taxation.

I'm relying on the paraphrasing in article rather than the text of the law itself, but this says that it only applies to assets held in the state.

mikeryan | 2 hours ago

The core of the law, ie who is expected to register their car in CA and what state sales taxes need to be paid has already been in place for years and likely already challenged. This is just a modifier to address a particular loophole.

As long as nothing about this crosses state lines (ie they’re not trying to regulate out of state businesses or property) there’s not a lot to go on. Several states have taken similar steps to close this loophole. Famously the YouTuber whistlindiesel got arrested in Tennessee for this and the case is still pending

https://www.thedrive.com/news/is-the-government-making-an-ex...

bluGill | 2 hours ago

Details matter and the article may have them wrong, but my reading is this accidentally covers out of state cars as well. I'm not going to look up the law to see who is right though.

mikeryan | an hour ago

The cars are registered in MT but they’re under CA jurisdiction if they are primarily driven here. That’s the literal loophole. CA is not trying to force people to pay CA registration and sales tax on cars kept and used primarily out of state.

bluGill | 11 minutes ago

That is the intent of course. However it is really easy to write a law that missing important details and so despite the intent cover all cars regardless of where they are used.

hparadiz | 2 hours ago

This tries to apply a tax to people who have never set foot in California. I have no idea how this holds up.

linksnapzz | 3 hours ago

What, the government of CA is lobbing hastily-crafted, poorly considered legislation in the general direction of a problem that they think they have?

(surprised pikachu face)

sandworm101 | 3 hours ago

>>You want comprehensive enforcement with reasonable penalities. >>You don't want draconian laws randomly enforced.

Paying tax on a vehicle driven in a state is not unreasonable. And holding the executives of a shell/numbered/privately-held/tax-dodging organization liable for taxes owed is not draconian.

SoftTalker | 3 hours ago

Next headline: More wealthy people leaving California.

These shenanigans with vehicle taxes happen whenever a neighboring state has a significantly better deal. People register vehicles in friends or families names who live in that state, or form a legal entity there which can own the vehicles. Of course then the high-tax state writes more and more convoluted definitions of "residency" for the vehicle to make it subject to taxation, which are either hard to discover/enforce as a practical matter or someone finds a new loophole and the avoidance games continue.

Noaidi | 3 hours ago

> More wealthy people leaving California.

Good! I do not understand why people think this is a bad thing. I would rather be surrounded by poor, kind people than these rich sociopaths.

recursive | 3 hours ago

Good news. There are a lot more poor people in CA than rich.

linksnapzz | 3 hours ago

...and yet, the number of people willing to emigrate to live next to the "rich sociopaths" of sportscar-owning California is far greater than the # trying to emigrate to live amongst the poor, kind people of, say, Cuba.

Funny, that.

testfrequency | 2 hours ago

HN crowd used to hate the rich.

Now comments like this, defending losers with lambos, are seen as admirable.

randallsquared | 2 hours ago

What are you talking about? HN was a site for people aspiring to BE the rich, in the sense that it was operated by and revolves around a startup accelerator.

pessimizer | an hour ago

> HN crowd used to hate the rich.

I don't know where you heard this, but it is not true. HN is filled with people with many opinions about the rich, and also many rich people, and has always been.

Startup News, created by a founder of the venture capital incubator Y Combinator, did not ever uniformly hate the rich. It is sponsored by the extremely rich, and only exists because they wished it into existence and maintain it.

krapp | an hour ago

(raises hand) I hate the rich!

kube-system | 2 hours ago

No wealthy person is going to save money by relocating from California to avoid a $30-40k tax bill on an exotic car. Wealthy people have a beach house in California because they like California.

The people who relocate to avoid taxes are upper-middle class people who are overextended on their finances.

SoftTalker | 2 hours ago

Well they go through the trouble to form an LLC in Montana to own the car, to (illegally) avoid that tax bill. So clearly the tax isn't something they are just happy to pay. The LLC probably owns the beach house too, for some other tax dodge.

blaufast | 3 hours ago

Thank you California

Our willingness as a society to tolerate the expense, danger, and health issues brought by extensive car use will be looked back on with bewilderment. You can start to see the insanity when a 'classic' car drives by. It's noisy, heavy, dangerous, and smelly. It's allowed to noticeably pollute any area it passes through. We've made progress, but that level of noise, danger, and pollution is how every car on your street used to be.

Car culture has a unique flavor of regressive entitlement. Every bit of societal and legislative progress that has made cars cleaner and safer has been fought tooth and nail by this group.

Our government created a vast, expensive, open to use resource in roads and infrastructure, offers minimal restrictions an licensing for its use, barely enforces existing safety laws, and the combustion crowd shows outrage at the loss of their illegal activities.

I wish our culture was less tolerant of this behavior. It is a tiny percentage that costs the rest of us constantly. Sometimes its a motorcycle club, others it just rich people shucking the social contract. I'm looking forward to the last Harley getting recycled.

cowlevel | 3 hours ago

Is California making itself less car dependent or is it just taxing cars while remaining car dependent?

soperj | 3 hours ago

Still is pretty pollutant. You just don't see the brake and wheel dust as much as the fumes coming out of the car dusting everything with lead like they used to.

hydrogen7800 | 2 hours ago

>Car culture has a unique flavor of regressive entitlement. Every bit of societal and legislative progress that has made cars cleaner and safer has been fought tooth and nail by this group.

I'm a newcomer to this hobby, and am amazed how this resentment has perpetuated since their muscle cars were neutered in the 70's by emissions regulations. The resentment has transferred to subsequent generations who were not alive then, who still complain about all the emissions and efficiency efforts that carmakers undertake. Too much unnecessary machismo hanging around.

linksnapzz | 2 hours ago

You might be young enough to not remember how much engine performance turned to suck after about '74, and stayed that way for 15 years. Those '70s changes were worthwhile, but the 90-10 rule absolutely applies here.

hydrogen7800 | 2 hours ago

I am too young to have lived it, but I have read about the Malaise era. To me, it's just when American car manufacturers had to start competing globally, and couldn't, so kept making the same giant V8's, but with 160 hp.

linksnapzz | 2 hours ago

More wouldn't than couldn't.

The management was mostly of the opinion that gas prices would come down eventually, so there was little interest initially in making anything more efficient. Also, since small, efficient, cheap cars had miniscule or negative margins, there was a belief that competing in that market was optional.

linksnapzz | 2 hours ago

I am not overfond of Harley noise; and I understand that some people really object to the VOC-smell of poorly-tuned carburetors...but this is a bit much.

There's artistic merit in historic industrial design & engineering, and keeping those things in an operational state; for which I am willing to tolerate the occasional puff of blue smoke.

jhallenworld | 3 hours ago

I've seen car dealers in MA use Montana dealer plates. At the very least they are cheaper, avoids $220 / year excise tax and registration fees vs. $25 for Montana. I don't think it helps with any sales taxes- dealers don't have to pay when they buy cars, unlike customers. It would help if dealer uses the car personal reasons instead of just having it for resale.

Hmm... maybe I should start a car dealer just to avoid taxes on my next car..

The Montana plate for owners reminds of registering your boat in Wilmington Delaware to avoid state sales tax. You had to create an LLC to do this I think.

fedpost | 3 hours ago

Can I just take this moment to mention that I think we need a better system for car registrations across the board? I don't like that there are all these edge cases with titles, insurance, inspections/smog, window tint, plate expiry, taxes etc whenever you move or even travel. It feels like we've just turned vehicle ownership into a profit opportunity for the police to harass everyone over completely inconsequential nonsense the second you cross any state line (emissions/insurance aren't nonsense but bear with me pedants). Similarly it creates a mountain of work every time you move.

I wish you could just register under an LLC or trust or something wherever and have a generic plate that can go anywhere and force the states to agree on a set of standards that apply across the country.

Alternatively allow people to keep their plates indefinitely like phone numbers. Yes, this creates arbitrage opportunities but maybe we should be bringing up the standards of the arbitrage states instead of having assholes threaten everyone with guns for random infractions.

I'm kinda just throwing ideas out there but this current system is Kafkaesque.

sandworm101 | 3 hours ago

So a race to the bottom on licensing/taxation/safety/insurance/emissions? But only for those wealthy enough to have family trusts?

No. Each state needs the power to set minimum standards as to who can drive what. I don't want to see millionaires be allowed to drive around without insurance in unsafe cars simply because their daddy purchased them a share in a Delaware family-held plates LLC.

fedpost | 2 hours ago

You can create trusts for a few bucks. It's not an inherently rich people thing

sandworm101 | 2 hours ago

Ya, good luck trying to defend your 2$ out-of-state trust in local court when it is sued after not having proper insurance to cover the cars it "owns". But wait, you won't even be allowed into court as you need to be a lawyer to represent a corporate entity.

fluidcruft | 2 hours ago

States could harmonize laws (if they wanted to).

fedpost | 2 hours ago

That's kinda what I'm getting at I think. We've created a patchwork hell full of arbitrage and petty harassment and everyone's just kind of fine with it

kotaKat | 2 hours ago

Similarly, the car purchasing process is a nightmare. Carvana faced that one the hard way trying to sell across the US and ended up forming their own lobbying band to push for digital and electronic titling and registration.

https://www.estartcoalition.org/

I suspect eSTART is... a start to what you're looking for.

Spooky23 | 2 hours ago

The problem is you’re optimizing for bureaucratic efficiency over the needs of the people. There’s even issues with that at the state level that would be way worse.

So many Californians live in valleys that trap pollution. Strict emissions regulations have an immediate, tangible impact. South Carolina doesn’t have the same local issues and their standards vary. Likewise, tint stuff is mostly a police / safety issue, and is more of a problem in major metro areas. High tint is an issue in the Bronx. Not so much in rural Alabama.

I’d argue that the worst part of the system we have now is that we have a weird hybrid as disenfranchisement has become a political priority. Integration between states is driven by compacts between states and Canadian provinces and mediated through private entities like AAMVA and NLETS. That has facilitated other sharing agreements with insurers and other entities that is a serious and significant privacy violation.

We should be able to get a free passport card for identity, and make driving privilege licensure, vehicle registration, etc a purely state matter.

Someone could compile every vehicle regulation from all the states into one common list. It'd be more restrictive than any single state, but it would be consistent. And if someone doesn't like it, they can fall back to their local laws.

cmckn | 2 hours ago

Moves to different states are just not that common for the average American, and I would prefer for states to retain the power to implement their own policies in this area. I would not want to see e.g. California unable to change emissions policy because Texas isn’t on board.

Complexity is a cost of our federal system and I am okay paying it in most cases.

balderdash | 2 hours ago

I’m not sure what you mean by not that common. The ta millions of people a year- yes maybe it’s only ~1% of the population, buts it’s one percent every year, and I quarter you it’s no evenly distributed.

https://www.census.gov/newsroom/press-releases/2026/2024-sta...

imoverclocked | 2 hours ago

Except that states want their pound of flesh; California is definitely no exception.

There are entities that are federal registrations (eg: an aircraft with an "N-number" -- that N-number is federal) that individual states still try really hard to tax the same way as cars/trucks. Individual counties even take a stab at this.

It seems that the rules might be there for some benefit but mostly the rules help the state/county make income.

jeffbee | 2 hours ago

Window tint isn't nonsense, either. I think every stanced-out pickup with a tinted windshield should be apprehended and destroyed the instant it crosses my state's line.

gumby | an hour ago

Nobody seems to recognize how deranged it is that we drive around with easily identifiable numbers plastered on our vehicle. This has seemed weird and privacy-violating to me since I was a kid, yet even today when people complain about Flock cameras they don’t complain about what the cameras are looking for.

What if gun owners had to walk around wearing a huge plate with their gun registration number when they wanted to carry a gun?

And why do driver’s licenses have all sorts of extraneous info (all you need is a biometric, like a photo, expiration date, class of license, and any restrictions)? Just because I walked into a bar or bought a beer at the supermarket doesn’t mean they should be allowed to harvest my address, DOB etc.

The whole edifice is absurd.

> What if gun owners had to walk around wearing a huge plate with their gun registration number when they wanted to carry a gun?

Actually a very sensible proposition.

turlockmike | 2 hours ago

Eventually everything will be a use tax. It's the only fair tax and there will always be loopholes otherwise.

Schiendelman | 2 hours ago

You'd think that, but they are deeply unpopular.
If we're only doing tax policy that's popular, it's gonna be all corporate and high income household taxes.

smallmancontrov | 2 hours ago

If we're only doing tax policy that's popular with wealthy donors, it's gonna be ~all earned income and sales tax.

Oh wait, that's what it is.

downrightmike | 2 hours ago

Land use tax needs to start first

hparadiz | 2 hours ago

I don't get how it's constitutional for them to levy a tax on an officer of a company that does not live in the state just because one officer of the company does live in the state. Even weirder the law does not require the one officer that does live in California to have a company car. In other words they are trying to tax out of state cars with no proof those cars were ever in the state. This is gonna cause a mess in the courts.

downrightmike | 2 hours ago

Taxation without representation

jmilloy | 13 minutes ago

They only tax the assets that are held in the state. I don't know where you're getting that they will tax out of state cars.

> If anyone running the business is a California resident (by the updated definition outlined above), then the whole business is a California resident, and any assets (including Lamborghinis and Bugattis) held in the state are subject to California taxation.

bradlys | an hour ago

I think the tax hole loop is a bit annoying but I also find it annoying that CA won't allow you to register a shitload of cars in the state, period.

It's due to the asinine carb laws. Even if you have a car that would pass smog, they won't let you register it. I don't see this doing anything when a ton of vehicles get a pass. For instance, all motorcycles don't fall under this rule and they are the biggest polluters out there.

It's just dumb.

All these complaints people have about cars - yet don't see any legislation out there that's bringing the clean energy public transit revolution. Just more rules without any relief.