A Long-Standing Planning Technique
For years, vehicle owners across the United States have used a legal mechanism available under Montana law to reduce or eliminate sales tax on high-value automobiles and vehicles. Montana is one of the few states with no general sales tax, and its business-formation statutes allow non-residents to establish limited liability companies (LLCs) without physical presence in the state.
Mont. Code Ann. § 35-8-201.
“One or more persons may organize a limited liability company… without regard to residency or domicile.”
Because vehicle registration may be made in the name of such an LLC, Montana law authorizes registration for entities formed in the state, even when the owner resides elsewhere.
Mont. Code Ann. § 61-3-303(1)
“A nonresident who has an interest in real property in Montana may register, in the county where the real property is located, a motor vehicle, trailer, semitrailer, or pole trailer operated or driven upon the public highways of this state.”
When a vehicle is titled to a Montana LLC and registered in Montana, no sales tax is imposed. The process is straightforward, inexpensive, and widely used. Thousands of taxpayers—particularly RV owners, auto collectors, and individuals with multistate footprints—have relied on this structure in entirely legitimate ways.
And yes—sometimes it is legal.
Montana LLC registration is not inherently evasive. Many taxpayers fall into categories where the arrangement is fully compliant. Most states only impose use tax when a vehicle is brought into the state for use beyond a temporary period. Montana LLC registration is perfectly legal when the vehicle is:
- used primarily out of state,
- not garaged in a taxing state long enough to trigger nexus,
- genuinely used by a Montana entity conducting business activities,
- or owned by full-time RV-ers who have no fixed “primary-use” jurisdiction.
Plenty of taxpayers follow the rules and remain fully compliant.
Where It Turns into Tax Evasion
The legal boundary appears not in Montana’s statutes but in the use-tax regimes of other states, which impose taxes based on where tangible personal property is actually used, stored, or consumed.
Tennessee’s statute is illustrative. Tenn. Code Ann. § 67-6-203(a) provides:
“A tax is levied… on the privilege of using, consuming, distributing, or storing any tangible personal property within this state.”
The location of registration is irrelevant. The presence and use of the vehicle within the taxing state control the tax obligation. California’s Rev. & Tax. Code § 6201(a) contains nearly identical language:
“An excise tax is hereby imposed… on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer.”
Colorado, Georgia, Utah, and most other states follow the same framework. Even brief or intermittent vehicle presence can trigger a tax obligation if the vehicle is primarily garaged or operated in the state. And when the tax owed is significant, the consequences escalate.
This is the backdrop against which the Montana LLC strategy has shifted from a quiet tax-planning practice to a high-visibility enforcement focus.
A Shift in Enforcement Attitudes
While the Montana LLC structure has existed for decades, state tax authorities have increasingly viewed widespread out-of-state use as a direct loss of revenue. Several states have implemented new data-matching systems, statutory presumptions, and investigative programs aimed specifically at identifying vehicles registered to Montana entities but used elsewhere.
Utah Senate Bill 52 (2025) authorizes data sharing to identify residents operating vehicles registered out of state. Utah officials describe the pattern as a “loss of revenue” and an “abuse of the tax system.” Wyoming has created a statutory presumption that out-of-state registration does not relieve Wyoming residents of tax responsibility. Georgia and California have deployed automated license-plate readers, toll-tag correlation, insurance-database cross-checks, and dealer-compliance audits.
Across states, the environment is shifting, and the use of Montana registration is no longer viewed solely as tax minimization, but increasingly as a compliance signal.
A High-Profile Case Puts in the Spotlight
For years, discussions around Montana plates largely lived in forums, dealership back rooms, and niche tax circles. As state revenues declined and enforcement tools expanded, what was once a technical issue of use-tax nexus and residency has increasingly been framed as willful evasion when the facts support it.
On November 15, 2025, Tennessee authorities arrested YouTube content creator Cody “WhistlinDiesel” Detwiler at his home in Putnam County, Tennessee. Detwiler is known for destroying high-end vehicles for an online audience, and the visibility of his videos became part of the evidentiary trail against him.
Detwiler purchased a 2021 Ferrari F8 Tributo, titled it to a newly formed Montana LLC, and registered the car in Montana—thereby avoiding Tennessee’s approximately 7% sales tax, which would have exceeded $30,000. The Ferrari later appeared in several of Detwiler’s widely viewed videos, including one in which it was driven through a Texas cornfield and ultimately set on fire.
The case contains every element capable of drawing national attention:
- a high-value vehicle,
- public visibility,
- a Montana LLC,
- a significant asserted tax liability,
- and treatment as a criminal matter rather than a civil tax dispute.
Tennessee prosecutors secured a grand-jury indictment charging both Detwiler and his LLC with two felony counts of tax evasion. The charges rely on Tenn. Code Ann. § 67-1-1440(g):
“It is a Class E felony for any person willfully to attempt in any manner to evade or defeat any tax due the state of Tennessee; provided, that if use tax of less than five hundred dollars ($500) is involved, the offense is a Class A misdemeanor. Each act done in violation of this subsection (g) is a separate offense.”
The indictment also ties the alleged offense to Tennessee’s use-tax statute. Prosecutors argue that although the Ferrari was registered in Montana, it was used, stored, and operated primarily in Tennessee, triggering Tennessee tax regardless of registration formalities.
Detwiler’s dramatic arrest was executed by six officers, recorded in real time by Detwiler’s production team, and viewed by millions within hours. Overnight, a niche tax-planning technique became national news—not because the underlying statutes had changed, but because one very public case illustrated how states are now prepared to enforce them.
Detwiler disputes the charges and has publicly maintained his innocence. His defense will almost certainly argue that the car wasn’t primarily garaged in Tennessee, that much of the footage shows it being used out of state, that the Montana LLC was properly formed, and that—at worst—any dispute is a civil use-tax issue, not a criminal one.
“We are asking the state what the qualification is for the amount of time the vehicle would be in or operated out of Tennessee, considering the car burned down in Texas and was traveling in other states while I owned it.”
I Got Arrested for “Tax Evasion”
Ultimately, Detwiler’s legal outcome hinges on proof, not optics or paperwork. To sustain a criminal charge, authorities will have to prove that Detwiler intentionally sought to evade Tennessee tax and that the Ferrari was actually based in Tennessee. Without clear evidence of both, the felony charge is a stretch; with them, the Montana paperwork still won’t save him from tax liability. Intent determines criminality, but location establishes taxability.
A Loophole Entering a New Phase
The Montana registration model has existed for years with little controversy, but the enforcement climate around it is shifting. States are taking a closer look at where high-value vehicles actually operate, and they’re willing to pursue cases when the facts support it. Detwiler’s situation drew attention because of who he is, but the underlying issue applies broadly: vehicle taxes follow use, not paperwork. For taxpayers relying on these structures, the critical question is whether the real-world facts will withstand state tax authority scrutiny.
This material has been prepared for informational purposes only, and is not intended to provide or be relied upon for legal or tax advice. If you have any specific legal or tax questions regarding this content or related issues, please consult with your professional legal or tax advisor.
