California Governor Gavin Newsom has signed Senate Bill 1406, a measure designed to help the state recover unpaid taxes tied to vehicles registered through out-of-state shell entities.
The new law gives California additional tools to address cases in which a vehicle is registered outside the state while tax obligations may remain unpaid in California. The legislation has been described as closing a loophole associated with Montana registrations.
According to Carscoops, SB 1406 is aimed at vehicles placed on out-of-state registers through shell arrangements rather than conventional ownership and registration practices.
While the law applies in California, it highlights a wider issue for vehicle owners and tax authorities: registration choices can carry legal and financial consequences when they are used to avoid taxes due in the place where a car is actually kept or used.