"Use tax" - surprise, surprise!

If you import a replica from outside of the USA it will go through US Customs. US Customs in turn will sooner or later forward a record of the import and its declared value to the state in which you reside. The state will then contact you to pay a "use tax" (sales tax) on the declared customs value. If you have your receipt for any use/sales tax paid when registering the car you can have a certified copy made of that receipt and deduct it from the amount owed the state, but that might cause some eyebrows to be raised if the declared value at registration was less (ha, ha - fraud?). The state may also impose penalties and late charges, but they'll probably be happy if you just pay the tax on the declared amount.

Your state may not have this interface with Customs or a property use tax. Mine does (Maryland), so I'm just gonna send them their blood money.

Hey George, can you give us some idea of how much taxes it cost to cover your IM? Seems like Henry could open an "office" in the U.S. and that be the shipping origin. Last year I bought a top, side curtains, tonneau, and his wide wheels and I was surprized at the import duty tax. Ouch.

Part of buying an IM is that IM clears the cars through customs and pays the duty, which may be another reason their prices are a bit higher. The Maryland state "use tax" will be a little over $1,000 (5% of the declared value at entry through US Customs).

Thanks George. I wondered how the import duty was handled re their cars. I still wonder if they could open a branch office in the US to cut down on the export fees, the savings could be passed along to the US customers? (I Maryland takes a grand bite just imagine what the USG wants...)

If memory serves me, IM was doing biz in the US, sold out, signed a non-competition agreement, moved to Canada ignored the agreement and went back into competiton with replica builders near and far...

Maybe there is an aspect of their original agreement that says they can't 'do business' in the US...

All the more reason to buy USA!

Well then Paul, don't buy any of the "American" cars or products that are made in Mexico (like some Fords), Japan, or China. Is a Toyota or Honda built in a US plant "American made"?

As far as I know IM honored their non-competitive agreement; these agreements are usually in effect for a period of five years, and some have even proven to be illegal (you can't sign away your livelihood).

(Message Edited 9/18/2002 2:03:31 PM)

Hey Erik, whatever happened to NAFTA (North American Free Trade Agreement) that was so highly touted a few years ago?

Wasn't the North American Free Trade Agreement just a ploy to build more manufacturing plants and send more American jobs across the border (the southern one, that is)? The cost of American labor is high. Just ask anyone whose job has been "outsourced" to another country that has an eagar labor force which will work for a fraction of what an American would be paid. Ask any I.T. professional whose job is now being performed by Indian nationals or a call center person whose position now resides in Jamaica.
John H.
whoa! get me off my soapbox.

All this stuff depends on what the agreement said and how it was structured. Non-competes should specifically define time and geographic boundaries. These can be very broad and are generally consistent with the intent and faith of the agreement. They often include both the original corporation and all principals or officers. I believe I recall a little ill feeling back when all this happened. But, if you make a deal, the binder needs to cover it or you have no recourse. However, that binder may cover the matter of opening a IM corporate entity in the U.S... But with Classic Motor Cars/Carriages way gone, who would pursue it???

(Message Edited 9/18/2002 3:37:31 PM)

Yes, George, NAFTA has all but gutted the textile economy here in NC. The garment industry left a decade earlier.

Back to IM, wasn't being glib about the possibility of them opening a branch office in the US if it would save new buyers certain import duties either on the front end or the rear. Henry may pay those taxes, but actually the consumer is with those taxes being built into the pricing.

As you know Henry is a smart guy and I am sure he has considered a US office for shipping purposes but it must not be worth it.

I believe Canada has some crazy deal where IM can sell cars in BC with not problems but it is more difficult in other provinces, though I could be mistaken about that. Having traveled to Canada on business and pleasure is the costs of goods sold up there is a bit more expensive than down here. All of the replacement parts I bought from Henry I had to pay the UPS driver on the spot an import duty, which added to the cost of my purchase -- not Henry's fault but caused me to rethink where I turn to buy parts.

I think Henry should stash a cuban stoggie in every part he ships to the US as a marketing gift. Now there's an idea!

I think people who live in Alberta and Ontario can't buy a new IM.