The tax loophole takes advantage of states like Montana that don’t have statewide sales tax. Visitors from other states purchase and register a car there to save money, sometimes by setting up a limited liability company.

Montana is the most popular state for car owners to take advantage of the loophole. In 2023, Big Sky Country had 879,000 licensed drivers but more than 2.3 million registered vehicles. Bloomberg found that Montana has more than double the national average vehicle-to-driver ratio.

Montana on pace for record number of new business starts “registering a car or an RV in a new Montana LLC is considered a new business in Montana”