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California Officially Closes the Montana License Plate Loophole
Key Takeaways
- California SB 1406 became law on Sept. 30, 2026, after more than seven months of legislative work.
- The law targets shell companies used to register vehicles out of state, especially in Montana, to avoid California use tax.
- SB 1406 expands the California-ness test to partnerships and limited liability partnerships and removes the old 50% out-of-state ownership threshold.
- A shell company can now be treated as a California resident if any shareholder, partner, member, or beneficial owner is a California resident.
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DT Editorial Team··via thedrive.com