In this first installment of our "Practical Immigration" blog series, we are going to address one of the questions our clients most frequently ask
"So now that I have my visa and am ready to move to the US, what happens to my car?"
Our team has had to figure this answer out for ourselves to help our clients successfully navigate the legalities of automobile importation, and this blog post will aim to provide a clear understanding of what to expect through that process.
Step 1: Confirm Your Eligibility and Vehicle Compliance
Before you can import your car, you must ensure it meets US safety and emissions standards. The vehicle must comply with the US Department of Transportation ("DOT") and the Environmental Protection Agency ("EPA") regulations. Here is what you need to know:
- DOT Compliance: The car must adhere to US Federal Motor Vehicle Safety Standards ("FMVSS"). Look for the certification label typically found in the door frame. If the car does not meet FMVSS, modifications may be required. Canadian cars may have a Canadian equivalent label, in which case a Manufacturer's Letter will be required.
- EPA Compliance: The vehicle must meet US emissions standards. Check for an EPA compliance label under the hood. If it is not compliant, you will need to determine if it can be modified to meet the standards.
Many vehicles in the US and Canada are built in North America and made to meet the necessary standards for both countries.
Step 2: Prepare the Required Documentation
Once you have confirmed compliance with safety and emissions standards, it is time to prepare your importation paperwork. Ensure you have the following documents:
- Vehicle Title and Registration: Proof of ownership.
- Proof of Compliance: Certification labels for DOT and EPA compliance.
- Manufacturer's Letter: A statement from the vehicle manufacturer verifying compliance with US standards, if applicable.
- Bill of Sale: This will be important to determine whether a duty tax will be required.
- CBP Form 7501: Entry Summary form.
- DOT HS-7 Form: Declaration that the vehicle complies with US safety standards.
- EPA Form 3520-1: Declaration of compliance with emission standards.
Step 3: Importation Procedures at the Border
When you arrive at the US border, you will need to declare the vehicle and present the required documentation to Customs and Border Protection ("CBP"). Here is a step-by-step process:
- Arrival at the Border: Upon arrival, inform CBP officer that you are importing a vehicle. You should then be directed into the secondary inspection area.
- Present Documentation: Submit all necessary documents, including CBP Form 7501, DOT HS-7, and EPA Form 3520-1.
- Vehicle Inspection: CBP may inspect your vehicle to ensure compliance with all US regulations.
- Pay Import Duties: You may be required to pay import duties if you have owned it for less than one year. The duty rate for vehicles is usually 2.5% of the vehicle's value but may vary depending on the vehicle type and trade agreements.
Step 4: State-Specific Requirements
After clearing CBP, you will need to register your vehicle in the state where you will reside. You should also be mindful that each state will have its own Department of Motor Vehicles ("DMV") regulations and requirements, typically involving:
- Safety Inspection: Certain states require a vehicle safety inspection.
- Emissions Testing: States with more stringent emissions standards may require an emissions test.
- State Registration: Register the vehicle and obtain state license plates. This involves paying registration fees and possibly sales tax.
- Insurance: Obtain auto insurance in the state where the vehicle will be registered.
While importing your automobile from Canada to the US may seem like a daunting task, it can be a smooth and quick process with proper guidance, preparation, and implementation.
Moodys Tax Law is only about tax. It is not an add-on service, it is our singular focus. Our Canadian and US lawyers and Chartered Accountants work together to develop effective tax strategies that get results, for individuals and corporate clients with interests in Canada, the US or both. Our strengths lie in Canadian and US cross-border tax advisory services, estateplanning, and tax litigation/dispute resolution. We identify areas of risk and opportunity, and create plans that yield the right balance of protection, optimization and compliance for each of our clients' special circumstances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.