WIESBADEN, Germany (June 1, 2015) -- 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 you meet three conditions. You must take physical possession of the vehicle prior to shipment, have valid permanent change of station orders and import it for personal use. However, the exemption does not free you 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 you can also prove it by simply putting a copy of your movement orders in the glove compartment.
Second, you must have a set of official permanent 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 your personal use or for use by immediate family members.
"If you had six dependents of driving age," Dean explained, "you could justify importing seven vehicles duty-free; one for each of them and one for yourself."
However, it is illegal to use the exemption to import vehicles for third parties or 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. You can obtain state tax information from the relevant department of motor vehicles, which can be found at the first link in the "Related Links" section to the right of this story.
Call a military customs office to find out more about federal customs exemptions or your local transportation office to learn about shipping procedures and fees.
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