Taxes on a Vehicle Bought Overseas

[Sputnik1961]

I am in the military and looking at buying a car through a military sales program. the good thing is you can ge tthe car exactly as you wanted and for a good amount off and it will be delievered to the states when I return from deployment. I am looking at a 2011 5 series and will save about 6k off of MSRP.

The only thing I have not been able to find out is if I will have ot pay takes once I get back. I am in Virginia now but am a Florida resident and thouhgt about registering the vehicle in florida. I have read the FL Dep of Revenues website and they have a 6% "use tax" is that what I would have to pay when I register the vehicle? I found Virginia has a 3% sales tax on new cars. Would it be legal for me to register the vehicle in virginia, where I am stationed, or would I have to go with Florida.

I would like to find a way of not paying any sales tax since I am not buying it in the states but is there a legal way of going about that?

[Bubba Jimmy]

You'll have to pay the use tax. Also, if the car is not manufactured to U.S. EPA standards plan on spending $1500+ to add emissions equipment. Florida will charge the use tax plus an impact fee. Even if you register in VA first, you still have the FL impact fee. Plus you'd have the VA personal property tax.

Sorry, but you're a citizen of a country that taxes just about everything excpet farting, and that's only because they've not found a way to count those.

[Sputnik1961]

I would buy this car through BMW and they would make the car to US specs so I assume the impact fee would not apply.

VA's sales tax is half of FL so I would save just over $1500 by simply registering the car then. That would more than make up for the extra I have to pay in personal property tax (~200 or so). Would I need to pay that personal property tax since I am not a Virginia resident?

I checked on the FL department of revenues website and I would be exempt from the use tax if I register and used the car in VA for at least 6 months. So the cheaper thing I guess would be to register in VA for a year and then switch over later so that i do not keep getting hit with the personal property tax if I am not exempt from that.

I will try to read up on VA personel property tax.

[Bubba Jimmy]

Sorry, but the VA personal property tax is much higher than $200 on a nice new 5-series Bemer. And you will pay a Florida impact fee for any vehicle you bring into the state and register, no matter what. That has nothing to do with EPA. The $1500 is the average cost to convert cars built to European standars to US emissions. But they are going to charge you more for the same thing on the other end, so that's probably a wash.

More research to do, I'm afraid.

[Scott67]

This is way out of my area, but I do know people who have bought cars overseas, driven them there a little, and then imported them as a used car. I don't know the mechanics of how they did it, but my understanding was that this greatly reduced the taxes and import fees that they had to pay.

[Bubba Jimmy]

Think about this logically for a minute. If there were significant cost savings associated with buying a car overseas and then exporting them back to the US, then normal market forces would have set up an entire network of businesses competing in this area to help people do it. You wouldn't even have to fly to Germany or Japan. You could simply arrange for the export right over the phone. After all, if you could do it and save money, then why couldn't a company with contacts all over the world do it even more efficiently? Not only are there EPA standards to meet, but also DOT standards on tires, headlamps, and many other safety standards. You might have to pay a duty. You might have to pay a gas guzzler tax (IRS form 720). Shipping alone is likely to be $1500 or more.

http://www.epa.gov/otaq/imports/

[Sputnik1961]

I do mot understand how the impact fee would apply since this car would be like any other BMW I would buy at a dealer; BMW builds it to US specs and delivers it like all the other US cars they build. So the gas guzzler tax I would not pay unless i choose a vehicle that falls in that catagory and the EPA/DOT standards would not be a problem since the car is built to US specs

this is a program for military only (stationed or deployed overseas) and basically I would get the car built to the exact specification I want delivered to a local BMW dealership for about $7000 less than MSRP. The benifit is I do not have to haggle the dealer down to this price; it is just what I get.

I am just wondering about the taxes. I have tried to find exemptions but military buying overseas is not one of them, nor is buying while in a combat zone (which I am).

I did more reading on VA property tax and it would be roughly $1000 (I based the $200 on the fact that that is what my girlfriend pays on her car, which is not a BMW), I am not familiar with all the details but I think it is yearly and it is based off of some sort of book value as of the first of the year (or something like that).

From my research I have been able to do I think it would be cheaper to register in VA. The VA tax is 3% vice 6% in FL, and because I am a FL resident in the military I would be exempt from property tax in VA. I assume that I would not pay a FL impact fee if the car is not registered there.

I can register in FL later, after a year or so. I would be waived from the use tax after 6 months of the car being used in a different state. But I am not familiar with the impact fee. Is that only to do with bringing in a car built to another countries specs? if so I would assume I would not get this since the car is build like any other american BMW.

I have looked into the buying a car from BMW and driving it around europe on a vacation then having it sent back to the states. you save about $5000 off of MSRP so it is not as good. the taxes would be less on a "used car" and I have not looked into that too much. BMW does have that program set up but it looks like it would cost more than the opetion I have through the military.

[jamze132]

The military sales programs allows us service members stationed overseas to purchase a new car at considerable discounts. For instance, I just purchased a 2010 BMW X5 for $53K. The MSRP at bmwusa.com was $64 for it, so I saved $11K. I bought my wife a 08' Mini Cooper S and as part of the program, the vehicles are shipped back to the US for free.

However, if you do not take ownership of the vehicle in Europe 6 mo. prior to shipping it, you are responsbible to pay some heavy fees. Each state has their own tax and registration fees, so it would be prudent to check with the state you plan on registering the vehicle. I do know that if you have the car built and you don't take ownership until you get back to the US, you will be paying all sales tax on that vehicle. Hence the reason, we drive them around for longer than 6 mo. prior to going back to the US.

Some states waive or have reduced fees for members of the military, but again, you will have to check with each state.

And for the record, all cars purchased through a military sales program in Europe are US specs. For instance, if I was interested in buying an Audi, I would go to audiusa.com and build the car the way I want it. I would print off the summary and take it to the military rep here in Europe and he would order it. Most times, you save between $3K-$10K off of the MSRP and of course there is no sales tax. But beware, some states will make you pay some form of sales tax on the vehicle the first time it is registered in the US. Some states exempt military members. Most cases, they take a percentage of the vehicles current worth and make you pay that.

[Bubba Jimmy]

It's pretty easy to get 10% off MSRP at any dealer in the U.S. right now, even on luxury brands.

[Who'sThatGuy]

It's pretty easy to get 10% off MSRP at any dealer in the U.S. right now, even on luxury brands.

I was thinking the same thing... You can get better then 6K off a BMW at the moment by just haggling at the dealer.