Unclear on US sales tax laws. Help a Brit out?

[benanderson89]

I'll try to keep it short.

Basically, I'm heading to PA next year, and I'll use that as my opportunity to finally grab myself a Camaro to ship back to the UK. Considering the deal my friend got on a '14 Charger, I'm keeping my eyes open for very low milage Chevys since the savings on models with as little as 5k on the clock are quite substantial.

How does Sales Tax in the US apply to a used car?

In the UK, a dealership can charge tax on the entire transaction or just the profit margin of the vehicle. If its a private sale you don't have to declare any tax (buyer and seller both). If you're a foreign buyer, no tax is charged since its being exported (this applies to new cars, too).

Is it a similar story for the USA? Since I'm British, will I not have to pay sales tax from a dealership since I wont be registering it in that country? Does this also apply to new cars (if the dealer allows the sale)?

This is the last piece of the puzzle I need solving before I can be truly comfortable buying a car overseas.

Thanks!
-Ben

[Mr. iNCREDIBLE]

sales taxes are State to State specific, however I believe that vehicle sales tax in all states is collected at the rate of the buyers home residence (so if I live in CA and buy in PA, I would still pay CA sales tax rate).

since you are talking PA, I would start by looking through their tax FAQs:

https://revenue-pa.custhelp.com/app/...ntry/related/1

[mlee]

Tax laws are different state by state. But generally on a used car taxes are paid on the value of the car when it's registered in that state. For me it's 6.25%.

Pretty sure when you buy from a dealer you would get taxed even if shipping to UK but I could be wrong. Maybe someone with more knowledge on the subject will chime in.

[benanderson89]

Originally Posted by mlee

Pretty sure when you buy from a dealer you would get taxed even if shipping to UK but I could be wrong. Maybe someone with more knowledge on the subject will chime in.

This is the burning question, really. If I am charged tax I'll be paying tax on tax on a car with tax.

That would be 6% on the MSRP in PA, then 10% import duty at UK customs, then UK sales tax on top of everything else at 20%. Add on the shipping container fees + conversions to make it road legal (mostly lighting) and a $24,000 1LS comes alarmingly close to $40,000.

[mlee]

Originally Posted by benanderson89

This is the burning question, really. If I am charged tax I'll be paying tax on tax on a car with tax.

That would be 6% on the MSRP in PA, then 10% import duty at UK customs, then UK sales tax on top of everything else at 20%. Add on the shipping container fees + conversions to make it road legal (mostly lighting) and a $24,000 1LS comes alarmingly close to $40,000.

Most guys I know that have shipped registered them here for a while before they left so I'm not sure how a direct ship works. Maybe that's where the duty comes in and you don't get taxed.

[benanderson89]

Originally Posted by mlee

Most guys I know that have shipped registered them here for a while before they left so I'm not sure how a direct ship works. Maybe that's where the duty comes in and you don't get taxed.

I wouldn't be able to do that in the UK anyway. The laws are anything if thorough.

If the car belongs to me and is 6 months old from date of purchase or more, then I don't pay the 20% sales tax.

The problem is that I need to also prove I've been living in the USA for one year or longer. Sadly, I'm only going there for a 2 week holiday. 50 weeks short of claiming it tax free!

[GMteSSted]

If you purchase the car for export you will not pay a state sales tax. The sales tax is only charged by the state the car is registered (licensed) in. You are not registering the car, therefore no sales tax. Each state does have a limit on the days you have to actually export the car. Each state is different. Tennessee is 3 days maximum for the car to leave the state.
Also you need to make sure if it's a new car it can be exported. Manufacturers place limitations on the exporting of their new cars sold in the USA due to fair trade rules. I believe if it is a used car, pre-owned, then you are clear of the fair trade rules and can export.

[benanderson89]

Originally Posted by GMteSSted

If you purchase the car for export you will not pay a state sales tax. The sales tax is only charged by the state the car is registered (licensed) in. You are not registering the car, therefore no sales tax. Each state does have a limit on the days you have to actually export the car. Each state is different. Tennessee is 3 days maximum for the car to leave the state.
Also you need to make sure if it's a new car it can be exported. Manufacturers place limitations on the exporting of their new cars sold in the USA due to fair trade rules. I believe if it is a used car, pre-owned, then you are clear of the fair trade rules and can export.

Thank you! Excellent answer! I'll keep it bookmarked so I can reference it when I go to a dealership.

[Snidely Whiplash]

Find a forum military member who is about to be transferred to a US military base in Europe purchase the car and send it to Europe free of charge. You then purchase the car from him. Keep the deal low key and you'll save a ton of money.

Even better if you have a military member who yearns for a Euro sports car. You guys make a trade when he gets there.