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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
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export car tax

Resolved Question:

If i'm buying a brand new car and will not going to have it under my name(buy it with a clean title from the dealer) exporting the car as a gift to china,(might sell it later, haven't made up my mind) do i have to pay taxes when i buy the car? how do i tell the dealer that the car is not going to be use in US? Just tell them? And what kind of taxes do i have to pay before the car can enter china(as an un-used car), can you tell me as the overall percentage of car value for the total tax amount?

Also, once i gave the car away, do i still have to pay any type of property tax? do i need to report my sales(to US) as tax if i decided to sell the car in china? thank you
Submitted: 7 years ago.
Category: Tax
Expert:  Ed Johnson replied 7 years ago.

DearCustomer

Lets talk U.S. sales and use tax. In order to avoid the tax, by shipping a car overseas, the dealer has to ship the car directly. Else, you would have to take possession of it in order to move it yourself, which would require payment of sales tax. Some dealerships will write up the paperwork in such a way that it appears as if they are shipping it, but you are actually the shipper. They would simply indicate for delivery to China. You would get temporary or tranport tags to move the vehicle to the shipping doc.

The taxes for export are:

34.2% tarrif

Value added tax of 17%

Consumption tax of 8% (if over 2200 cc engine)

You pay value added tax n the tarrif as well so 17% times the 34.2%

 

 

Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
Ed Johnson and other Tax Specialists are ready to help you
Customer: replied 7 years ago.
Reply to Ed Johnson's Post: Can you show me for an detail example if a car is $80,000

By means of taxes for export it out of US,
do i have to pay more taxes(import) if i'm shipping my car to China?

Thank you
Expert:  Ed Johnson replied 7 years ago.

There is no export tax for the car.

Tarrif: 32.4% X 80,000 = 25,920

VAT: 17% X 80,000 = 13,600

Use tax: 8% X 80,000 = 6,400

Vat again 17% X 32.4%=.0551 (5.51%) X 80,000 = 4,408

TOTAL tax on entry to China: 50,328 dollars or roughly 62 % of the price of the car.

 

You are going to have to pay sales tax most likely in bloomington. I assume you mean bloomington, minnesota.

remember, if you take possession of the car, even to transport it yourself to a shipper, sales tax is required. It has to be delivered by common carrier or by the dealership to the ship in order for you to avoid sales tax.

There is no export tax in the U.S.: In the US, export taxes are unconstitutional since the US constitution contains a clause prohibiting their use. The U.S. did enact an export profits tax law, but that does not apply in exporting for personal use.

 

 

 

Customer: replied 7 years ago.
and for me getting that car out of states, do i have to pay property tax every year? or if i decide to sell it, do i have to include it in my income tax?
Expert:  Ed Johnson replied 7 years ago.

DearCustomer

There is no property tax in the united states in any state where the car is not garaged. if it is garaged in a state wihtout property tax or outside the U.S. there is no property tax to pay.

You are permitted to sell a few cars a year without paying income tax on the proceeds as it is considered your personal car and you are not doing it for profit. Every state is differnet in this regard.

Some allow four cars per year and some eight.

for sure, for this one car, you would not have to pay capital gains or income tax in the United states.

The sale of a car in china may be subject to tax in china, but not the U.S.

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Ed Johnson
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