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- Hacker News
- Vehicle registration and taxation is one of those things that made sense on a state level back when economies were more regional and auto travel wasn’t so ubiquitous. Now that both are no longer true, a patchwork system of 50+ different schemes makes it trivial to exploit loopholes.
This is one of those functions best handled at a national level and dispersed proportionally back to the states based on population relative to total registrations. It doesn’t have to mean the end of local or vanity plates (those could still persist with local DMVs functioning as federal tax collecting agents), but moving to a national or international scheme makes increasing sense.
by stego-tech - When someone first explained the montana loophole, I couldn't believe it was legal, and the consensus at the time was that no, it wasn't actually legal. If you got into an accident, you'd have some difficult explaining to do to your insurance. What the state did here was make it more obvious that people shouldn't be doing this.
The real loophole for normal people is that CA outsources smog checks, there are facebook groups advertising that they will pass your car -- the one without catalytic converters, for example. California is this interesting blend of lawlessness and rule-following, high taxes but also tons of absurdly low taxes (think Prop 13).
by carefree-bob - I've always found that a bit odd. CA is especially determined to make "any employee's child's dog exists in CA occasionally" a liability for the corresponding business. I'd be quite tempted as a new business owner to make spending more than 9 consecutive days in CA a fireable offense just to avoid these sorts of shenanigans. It's nice that they closed a "loophole," but they opened a bunch of other nonsense in the process.by hansvm
- Huh, similar situation in Italy: “Tens of thousands of Italian drivers have purchased Polish number plates for their cars and motorbikes in an elaborate scheme to evade road taxes and pay lower insurance premiums.
An estimated 60,000 motorists — mostly in and around Naples — have been enticed by the promise of 70 per cent savings on road tax and insurance fees to transfer ownership of their vehicles to shell companies in Poland and register the vehicles there, according to an industry group.
Now with Italy’s general election looming, Giorgia Meloni’s rightwing coalition has announced “the elimination” of the unpopular annual road tax that helped spawn the evasion schemes. The bollo auto will be cut for an estimated 14.5mn small and midsized vehicles — a giveaway that will cost Italy’s already strained public coffers an estimated €2.4bn in lost revenue next year” [1].
[1] https://www.ft.com/content/74e70f0c-3788-4343-93d7-9c8740ee2...
- pretty sure in a lot of these cases it’s already illegal, enforcing the law is another matter. someone actually has to pull over the montana plate owner, then the state has to sue them for tax evasion, build the case, etc. Thats just not gonna happen. ideally there would be a nationwide standard for registration and taxes.
also the new hot thing in california is to have dealer plates on your million dollar car. you never register it, never pay taxes, but it’s still legal to drive. you just need to own a dealership, but on paper again that’s not hard if you’re rich
by kart23 - Montana person here. I'm on the other side of this trade: trying to buy cars in California[1] that I'm going to register in Montana. My experience has been that it's very hard to exploit this "loophole". I know that because even not trying to exploit the loophole. I have to jump through hoops to prove to a dealer that I really live in Montana. And then the car has to be either put on a transporter, taken to the border (or all the way to Montana), or driven by an employee of the dealership to the border. Then we have to get paperwork notarized by someone at the border that the vehicle really left CA. You also have to pledge in writing that you wont bring the car back into CA except for maintenance. I've had dealers in LA just plain refuse to sell me a car because I lived in Montana. So it was not in recent years anything like as easy as "put a Montana plate on it" <waves hand>.
The article calls the ownership entities "fake LLCs". They were in fact completely real kosher Montana LLCs. The issue at hand is that CA wants to disallow the case where the LLC is owned by someone who is a CA resident. That's not the same as "fake".
Finally, anyone from California should experience the Montana DMV (called MDT here). It's like checking into the Four Seasons compared to the CA DMV! You can phone them and they'll answer within a few rings and help you out. You can go down to their office at the court house and perhaps have to wait in line for 5 minutes, but perhaps just walk straight up to the counter. They will help you figure out vanity plate letters, endlessly checking whether ideas you have are already registered. I almost make up excuses to go to the DMV, it's so nice there. Montana also has a system of sponsored plates. There are about 100 of them, which allows you to choose a plate of almost any color, which is nice if you want it to match the car color.
[1] Why do that? Well there are 100X more cars for sale in CA, and the prices are lower.
by dboreham - 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.
by fedpost - Interesting and somewhat related: Youtuber Cody Detwiler (whistlindiesel) was arrested last year and charged with multiple tax evasion felonies for using the Montana loophole to register his vehicles.
According to Detwiler, Tennessee did not bother to notify him in advance that he was in violation. Instead, they sent heavily armed men to his place of business, handcuffed him, and took him to jail. His bond was $20000.
Detwiler spoke out publicly on his Youtube channel about the arrest, claiming that he was targeted specifically because his celebrity status would bring attention to Tennessee's position on the loophole. Shortly afterward, Detwiler was arrested a second time at the airport while returning from a trip abroad, and charged with a separate Montana loophole violation.
Detwiler says that Tennessee authorities visited his accountant months before he was charged, asked her specific information about his vehicles being registered in Montana, and told her not to let Detwiler know about they were investigating him.
by waltwalther