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WIESBADEN, Germany — U.S. personnel stationed overseas can ship U.S. specification vehicles to the United States free of federal tax and duty. This exemption can mean big savings if one meets three conditions: a person must take physical possession of the vehicle prior to shipment, have valid PCS orders and import it for personal use.
However, the exemption does not free people from state taxation.
“Most people who miss out on the exemption do not take physical possession of the vehicle before shipment,” said Mike Dean, director of the European Command’s Customs and Border Clearance Agency. “If you have a car shipped directly from the factory, you risk having to pay the 2.5 percent federal import duty.”
Registering a vehicle is the best way to show possession, but this can be proved by simply putting a copy of movement orders in the glove compartment.
Second, one must have a set of official change of station orders in hand before shipping a vehicle. The exemption is not for people on extended leave or temporary duty.
Third, the vehicle must be for personal use or for use by immediate family members.
“If you had six dependents of driving age, you could justify importing seven vehicles duty-free: one for each of them and one for yourself,” Dean said.
However, it is illegal to use the exemption to import vehicles for third parties or in order to sell them.
People importing vehicles as part of a PCS can save federal duties and taxes, but state taxes on imported vehicles can be high. State tax information can be obtained from the relevant department of motor vehicles; links to these can be found at www.eur.army.mil/rmv/Stateside_DMV/.
Contact a military customs office to find out more about federal customs exemptions or contact the local transportation office to learn more about shipping procedures and fees.
