Sales and Use Tax Law: vehicles: shell companies.

California SB1406 aims to address issues related to sales and use tax on vehicles purchased through shell companies. The bill modifies existing tax laws to ensure that these transactions are properly taxed, preventing tax evasion. It seeks to close loopholes that allow individuals to avoid paying taxes on vehicle purchases by using these companies.

CA SB1406 is a senate bill in the California 2025-2026 Regular Session, sponsored by Jerry McNerney (D), currently “Passed” since September 30, 2026.

We track 5,060 California bills this session, 43 of them sponsored by Jerry McNerney.

The key recorded vote (A, August 26, 2026) ended 59–19 and passed.

Supporters of SB1406 argue that this legislation is a crucial step towards ensuring fairness in the tax system. By closing loopholes exploited by shell companies, the bill will help maintain revenue for public services and promote accountability among vehicle purchasers. Advocates believe it will create a more equitable tax environment for all Californians.

Critics of SB1406 contend that the bill could impose unnecessary burdens on legitimate businesses and consumers who use shell companies for valid reasons. They argue that the legislation may complicate the vehicle purchasing process and could lead to increased costs for consumers. Detractors also express concerns about potential overreach in taxation that could stifle economic activity.

Source: LegiScan roll call vote data.