California Cracks Down on Montana Supercar Tax Loophole

14 Bay Area residents charged with $1.8 million in tax fraud for registering luxury vehicles out-of-state

Published on Mar. 9, 2026

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The California Attorney General's office has charged 14 Bay Area residents with tax fraud for allegedly registering over $20 million worth of luxury supercars, including a $1.8 million McLaren Elva, $1.5 million Porsche 918 Spyder, and $1.26 million Ferrari F12TdF, in Montana to avoid paying California sales tax. The state claims the vehicles were never actually used or stored outside of California, despite the fraudulent out-of-state registrations.

Why it matters

This crackdown on a long-standing tax loophole highlights California's efforts to recoup millions in lost tax revenue from luxury vehicle purchases. The state has been increasingly aggressive in using license plate readers and other enforcement tactics to identify residents trying to evade sales taxes by registering high-end cars out-of-state, particularly in Montana which has lax registration requirements.

The details

According to the California Attorney General's office, a 2024 investigation by the DMV, Department of Tax and Fee Administration, and Department of Justice revealed a scheme dating back to 2018 in which the defendants submitted false forms claiming the vehicles were purchased for use outside of California. However, the cars never left the state and were simply delivered, driven, and stored within California. The state claims it lost over $1.8 million in unpaid taxes as a result of this fraud.

  • The investigation into the tax fraud scheme began in 2024.
  • The charges were announced by California Attorney General Rob Bonta on March 9, 2026.

The players

Rob Bonta

The California Attorney General who announced the charges against the 14 Bay Area residents.

California DMV

The state agency that assisted in the investigation and has launched over 80 similar investigations since 2023, recovering $2.3 million in unpaid taxes.

California Department of Tax and Fee Administration

The state agency that worked with the DMV and Attorney General's office on the investigation into the tax fraud scheme.

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What they’re saying

“Every dollar of unpaid taxes is a dollar taken from California's roads, schools, and the vital services our communities rely on. Schemes that defraud the government of millions in taxpayer money will not be tolerated. Today's announcement should serve as a reminder: If you break the law and engage in fraud and theft, my office will hold you accountable.”

— Rob Bonta, California Attorney General

What’s next

The California Attorney General's office says it will continue to crack down on similar tax evasion schemes involving luxury vehicle registrations.

The takeaway

This case highlights California's aggressive efforts to close a long-standing tax loophole that has allowed some wealthy residents to avoid paying millions in sales taxes on high-end cars by exploiting lax registration laws in other states like Montana. The charges serve as a warning that such fraud will be aggressively pursued and prosecuted.