Absolutely.

But make it illegal first. Make sure it's a "loophole" as opposed to what it currently appears to be: a specifically crafted loophole that over half the Fortune 500 can fit through.

Huh? There is nothing illegal about setting up a corporation in Delaware or South Dakota.

If you have a Delaware corporation doing business in, say, California, and you refuse to register as a foreign corporation in California and follow the laws applicable to businesses in California, that is a different matter.

The Delaware corporation is perfectly legal; the failing to follow California's laws when your company is doing business there isn't.

Over half the Fortune 500 is incorporated in Delaware. Countless private companies are incorporated in Delaware and other states, with their owners properly registering as foreign corporations and paying applicable taxes and fees in second states where they do business.

The person in question wasn't arrested for buying and registering a car in Montana. He was arrested for not paying the tax he owed on it under Tennessee law after he brought it into Tennessee. The law there states that sales or use tax is owed on a vehicle if the vehicle is primarily housed and operated in the state.

Under Tennessee law, you are also required to change an out-of-state vehicle's registration to Tennessee if it's brought into the state and operated there for more than 30 days.

So, in summary, you can buy a car in Montana and pay no sales tax and it's not a crime. It becomes a crime when you use the Montana purchase to evade paying taxes in another state where you actually use and house the car.