14 people charged. 56 counts. Over $20 million in exotic cars. A Ferrari that burned in a cornfield. And a YouTuber with 10 million subscribers who may have been exactly the poster boy the authorities were looking for.
Outside of the United States, buying a car is fairly straightforward. You pay the purchase price, you pay whatever tax your government applies, you register the car, you drive it. In the US it is more complicated, because tax and registration rules operate at state level rather than federally, and that patchwork of rules created a loophole that the wealthy have been exploiting for decades. Until very recently, almost nobody got caught.
How the Montana loophole works
Montana is one of only five US states with no general sales tax. It also imposes no emissions testing, no vehicle inspections, and charges minimal registration fees. Critically, it allows non-residents to form a limited liability company (LLC) in the state with almost no friction. An LLC can be created in a day for around $1,000. That LLC can then register and own a vehicle in Montana, regardless of where the owner actually lives.
Buy a $1.5 million Porsche 918 Spyder in California, where the combined state and local sales tax can reach 10.25 per cent, and you are looking at a tax bill of over $150,000. Register the same car to a Montana LLC you formed last Tuesday, and that bill disappears. The car wears Montana plates. The paperwork says it lives in Montana. You drive it in Beverly Hills.
That is the scheme. And it has been operating openly for so long, and so widely, that you can find forum guides, YouTube tutorials, and specialist companies offering to set the whole thing up for a fixed fee. Montana has the lowest average annual vehicle mileage of any US state, just 6,300 miles, which is widely attributed to the number of expensive cars registered there that never actually go anywhere near Montana.
What California just did about it
On 7 March 2026, California Attorney General Rob Bonta announced a 56-count criminal complaint against 14 individuals in the Bay Area for their alleged roles in a scheme to evade reporting of over $20 million in luxury vehicle purchases. The charges include conspiracy, filing false sales tax returns, failing to file tax returns, perjury and money laundering. The defendants allegedly worked with dealership employees and shipping agents to submit fraudulent California DMV and tax administration forms stating that vehicles had been purchased for use outside California, when in fact they were delivered, driven and stored within the state. The vehicles named in the complaint include a McLaren Elva valued at $1.8 million, a Porsche 918 Spyder at $1.5 million, and a Ferrari F12tdf at $1.26 million.
"When bad actors abuse legal loopholes and submit fraudulent documents to evade their obligations, the California Department of Justice will not stand idly by. Every dollar of unpaid taxes is a dollar taken from California's roads, schools, and the vital services our communities rely on."
That was AG Bonta. California says it has now launched 81 criminal investigations since 2023, identified 601 fraudulently registered vehicles and recovered $4 million in unpaid taxes and fees. Separately, the state has been conducting civil audits of nearly 500 dealerships suspected of facilitating similar schemes.
The enforcement tools being used are not complicated. Automatic licence plate readers identify Montana-plated vehicles appearing regularly in California. Insurance records, toll data, and social media posts all establish where a car actually lives. If your insurance shows a Los Angeles address and your car is on a Montana plate, you are already on a list.
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The man who may have accelerated all of this
Cody Detwiler, better known online as WhistlinDiesel, has 10 million YouTube subscribers and built his following largely by buying expensive vehicles and destroying them. In 2023 he purchased a $400,000 Ferrari F8 Tributo and registered it to a Montana LLC, avoiding approximately $30,000 in Tennessee state sales tax. He then drove it through a cornfield in a viral video, where it caught fire. Tennessee watched those videos. In November 2025, a Williamson County grand jury indicted him on two felony counts of tax evasion. Officers arrived at his property in force, arrested him on camera, and the footage went everywhere. He was released on a $20,000 bond. In January 2026, he was reportedly arrested a second time on similar charges while arriving at an airport.
Detwiler has maintained his innocence throughout and argued the authorities are targeting him specifically because of his profile.
"They think it will make a wave through the luxury car community and bring in tax money. They picked the wrong guy to run an example on."
He may be right that it was deliberate. He may also be right that it will not go the way the state hopes in court. But the broader point, that high visibility enforcement against a recognisable figure sends a message to thousands of quieter practitioners of the same scheme, is almost certainly the intention.
Where the law actually sits
The Montana LLC structure itself is legal in Montana. The problem arises in every other state. US law generally requires a vehicle to be registered in the state where it is primarily used and garaged. Most states allow a grace period, commonly 30 to 90 days, before out-of-state registration becomes a violation. Exceed that and you are required to register locally and pay applicable taxes. Doing so knowingly through fraudulent documents, as California alleges in its complaint, crosses from a civil tax matter into criminal territory. Convictions can result in prison time, not just back taxes and penalties.
Utah passed legislation in 2025 specifically targeting the practice. Vermont closed its own registration loophole in 2023. Multiple other states have active investigations running. California's crackdown is the most aggressive so far, but it is not operating in isolation.
The loophole is not closing because states suddenly discovered it exists. It is closing because the combination of licence plate reader technology, cross-state data sharing, insurance records, and the extraordinary visibility that social media now gives to exotic car ownership has made enforcement operationally viable in a way it was not a decade ago. The same culture that made Montana-plated supercars a status symbol, the Instagram posts, the YouTube videos, the car meet appearances, handed prosecutors their evidence.
Sources: California Attorney General press release, 7 March 2026 | Bloomberg Tax | The Drive | Autoblog, 9 March 2026 | Carscoops | Dexerto, November 2025 | Sky Hi News, January 2026 | Business Law Southwest | Milton Law Group