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So, you're thinking about trying to title your car in another state to try to evade requirements like inspections or certain insurance requirements or maybe even sales taxes. Maybe you have the wrong kind of paperwork and you're thinking, "If I go to another state, I can get my paperwork passed." Well, whether it's Vermont, Montana, or other states that you think are going to be easier, keep in mind that if you use another state's process to evade rules in your state, you're probably going to get caught. Here's why.

Here's a good example of what's called ALPR. ALPR stands for automated license plate readers. And that means that there are cameras all over the place that are monitoring license plates that are driving by. So, here's what happens. Let's say you live in California and you have a vehicle that is not going to pass smog or not going to pass inspection or maybe you don't want to pay sales tax. So you say, "Hey, I'll just title this vehicle in Montana so that way I don't have to pass smog. I don't have to pay the tax. I don't have to get it inspected and I'll just drive it around with Montana license plates."

Well, that's great. Now, first of all, you have to put it in the name of a corporation because states don't give out titles if you're not a resident. But what the loophole is, what people do is they form a corporation in that state in Montana. They put the car in that corporation and then they just drive it around in your state and you think you're legal because it's a legal plate. However, every state has a law that says if you are a vehicle operator in your state, you have to title and register the car in the state where you primarily use the vehicle.

And you might say, well, if it's a company car, I can use it anywhere I want. Yeah, you can. But what they're going to do is they're going to use ALPR data, automated license plate readers, that's going to see these license plates all over the place. Now, first of all, in most states, because Montana is such a notorious loophole, if a police officer sees a Montana plate far away from Montana, they're going to run the plate manually on their computer. And if they see that it's a corporation, they can stop you, check your ID, if you have a California license, why are you driving a Montana car? And if your answer's no good, they'll submit a report to the franchise tax board and they're going to investigate and they're going to find out that that corporation is in your name or in the name of somebody that is in California.

But even if they don't catch you manually, automated license plate readers are monitoring these plates. If they see the Montana license plate driving by the same intersection every day for a month, they're going to figure this is not just somebody vacationing in Santa Monica. This is not somebody just visiting Disneyland in Anaheim. This is somebody who has titled and registered a vehicle out of state to evade something and they're going to open an investigation. All they have to do is request the records from Montana Secretary of State. It'll give them a print out. It'll see the name of a person that's the registered agent or the name of a person that's an officer and they will track it back to you. And then they know when you go by an intersection because you go there every day. They'll pull you over. They may be allowed to seize and impound your vehicle.

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Now, back to your video. They may also not have to give it back. If they can prove tax fraud, if you did not pay sales tax, if you did not register the vehicle properly, if you did not do smog, they can seize your vehicle and you're out of luck. You lose the car for good and you can't get it back. So, these loopholes, you're not the only one that's heard of it. The governments know about it. All the different DMV commissioners know this inside and out. The tax departments of every state have very clear understanding of how these work and this is how they undo it. They have task force, groups, committees that are looking to try to catch people that are doing it.

What does ALPR look like? Well, here's a picture. Flock, if you notice on this picture, it says Flock. That stands for Flock Safety. It's a company that sells these cameras not just to police departments, but if you're an HOA, if you're an apartment complex, a parking lot, you can get Flock cameras for your private sector location and it'll track the license plates there. The governments can buy that data even from a parking lot, even from, you know, if you pull into, you know, Van's grocery store, they can track your license plate. Police cars, tow trucks, taxis, all kind of cars have these ALPR readers all over the place and they're taking pictures just like this and they can automatically read the license plate and track it back.

If they see Montana plates on a regular basis, they're going to flag you and investigate to see why you have a Montana plate. Look, if you're just visiting on vacation, no harm, no foul. But if they see that it's in a corporation name, an LLC name, Montana LLC, they're going to investigate further and undo you because they're going to figure that you did it for a reason. Either your car is not eligible because it's not going to pass inspection. Maybe it's not allowed in California. Maybe you did tax evasion because Montana has no sales tax. Maybe it's something that won't pass smog. Either way, they're going to get to the bottom of it and eventually it'll cost more than what it would have to properly register in the first place.

So, you may get away with it to begin with, but at some point, it's going to come back to haunt you. Plus, the other problem is insurance. When you tell your insurance agent where you garage the car, where you do the car, you're going to have to tell them either Montana or California. If you tell them Montana, you're going to have a Montana insurance card. And if you use the car in California, if the car gets stolen, it gets damaged, or you cause a wreck, your Montana insurance might not cover you because you said that it's a Montana use vehicle. If they can see that you've been using it in California most of the time, they can deny your claim, which means if you total your car, you're out the money.

Now, if you tell them it's a California address with Montana plates, they may now turn that in to the California Franchise Tax Board. Or even if they don't, if the franchise tax board looks up your insurance and they see that you put California as an address, that just proves that you're evading California laws for a California-used vehicle. So, it's a catch-22. No matter what state you declare that you're using it in for your insurance, it's going to create some problems for you.

So, think twice about these out-of-state loopholes. Even though it might save you some money or, you know, do something that makes it easier, in the long run, it could create a lot more liability for you than you signed on for. If you like this video, be sure to click on a few others on our channel to see if there's other information that might be helpful to you about this same subject or maybe even other related subjects that could assist you with your resolution of your issue.