Do You Pay Tax On Shipping Cars?

1. When You Do Have To Pay Taxes
2. When You Can Deduct Car Shipping Costs
3. International Vehicle Transport & Taxes

One of the most frequent questions we get from our customers is if they have to pay taxes when they ship a vehicle. For most people and in most cases, the answer is going to be “no” since vehicle shipping is generally a tax-exempt service, at least if you’re shipping to and from the United States. In some cases, you may even be able to deduct the cost of shipping a vehicle, so long as you’re relocating for work or business. There generally are tax considerations when shipping internationally, which are dependent on the country you’re shipping to and the specific taxes they have on imports there.

When You Do Have To Pay Taxes

If you’re shipping a car that you already own (within the United States), then you do not have to pay taxes on the shipping costs. However, if you buy a car and the cost of shipping is included as part of the purchase price, then the cost of shipping is taxable, along with the vehicle itself. The reasoning behind this is that the total cost of the vehicle is taxable and, if auto transport is included in that, then it is considered part of the “sale price.” This applies to both new and used vehicles so it’s an important thing to keep in mind if you’re buying a vehicle from out of state and having it shipped to you as part of the total cost.

Since vehicle transport costs are not taxable, only those bundled with an auto sale are taxable. For example, if you purchase a car out of state and make arrangements to have it shipped on your own, it is not taxable. However, if the seller of the vehicle arranges for shipping, it is considered part of the purchase price and is taxable, along with the vehicle itself.

A-1 Auto Transport is an affordable, professional car shipping company with more than two decades or experience behind our services. With locations in every major metro area in the U.S., there’s no shipment that we can’t handle, regardless of the size, scope, or distance of your request. We are happy to give FREE cost estimates to all interested parties, either by using our online request form, or by calling us today at 1-800-452-2880!

When You Can Deduct Car Shipping Costs

There is one circumstance in which you can actually deduct the cost of car shipping from your taxes, which is tied to moving for work. If you are relocating for a job, your moving expenses are considered tax deductible, which includes vehicle transport costs. There are, however, a few criteria you need to meet in order to file for this particular deduction. First, your new job must be at least 50 miles further away than it was at your previous residence, which is a fairly easy standard to meet for most people that are moving. Second, you need to work full-time for 39 weeks of your first year at your new position. If you are an independent contractor, the full-time work requirement extends to two years.

International Vehicle Transport & Taxes

What we’ve covered above only applies to vehicle shipping within the United States, which is quite different from international or overseas transport taxes. The tax burden you’ll face with international transport mainly has to do with the two countries involved, though almost all of them will assess some form of tax on all vehicle imports. In some cases, this tax can be very high, so it’s important to check the import/export laws of the countries in question to fully understand the cost and taxes involved with international vehicle transport.