Imported an American Tele - Tax Free!

[jodie]

Here's a little story I want to share with you. Still can't believe it myself....

I live in Holland, but a few days ago I was in Detroit on a little business trip (my yearly visit to the auto show). When I had a little spare time I decided to check out some guitars at the Roseville Guitar Center. They had a really nice looking American Telecaster, swamp ash body, natural finish, maple fingerboard. It was on sale for $ 940, case included. I played it through a Hot Rod Deluxe, and I just loved it. Even better then the Hwy One I already have.

Time to do some calculating. First add 6% Michigan sales tax. And then off course I'd have to pay import duty (3.7%) plus sales tax (a hefty 19%) when I brought it back into Holland. Which adds up to $1230. Now that may sound like a lot of money, but I figured the same guitar would cost something like $ 1500 in Europe, so it would be worth my trouble to bring it all the way home. I decided to buy it. After some negotiating the GC salesman let me have it for $ 940, including tax, which made the financial picture a little better already. But things turned out even better. Way better!

The next day I flew back to Holland. UA gave me no trouble at all taking the Tele on the airplane as a carry on. No problem taking it through airport security either. Back at Amsterdam airport I had to go through customs. I was very tempted to go through the "Nothing to declare" gate, but I decided not to, because they let you pay double if you're caught.

So I went to the "Goods to declare" area, where I was approached by a young customs officer. I told him I was bringing in a guitar from the US. He asked me what kind, and when I told him a Telecaster he just went nuts! He asked me to open the case, then he longingly looked at the guitar for a long time, and went on telling me that he was a rockabilly player, that he loved James Burton and Elvis and that he wanted to get a Tele too, although he now played an Ibanez Artcore.

After talking about music and guitars for a while it was time to get down to business. I showed him the receipt for the guitar, and he went into his office to look up the exact tariffs. A few minutes later he came back and told me that apparently there was a new kind of penalty tax on certain goods from the US, and that instead of the expected 3.7% I would now have to pay something like 18% import duty, plus 19% sales tax, plus an extra fine. However, because he thought this "wouldn't be fair" he wasn't going to write it up. He was just going to let me walk out, without paying anything! I couldn't believe it, but he opened the automatic sliding doors, wished me luck with my guitar, and I walked out just like that. Paying no duties, no tax, nothing.

So here I am in Holland, with an American Tele, for an American price. "There ain't no such thing as a free lunch." Well maybe sometimes there is!

Jodie

[kuma52]

Congrat, seems 2005 will be a good year for you.

[SeanGephart]

That was very cool of him!

I'm curious, is it very difficult to find American Fender guitars in Europe and abroad?

[jaybee001]

what I don't understand is why you would have to pay a fine for declaring goods? If you'd have tried to get in without paying, yes, but in this case??

[jaybee001]

Originally Posted by SeanGephart

That was very cool of him!

I'm curious, is it very difficult to find American Fender guitars in Europe and abroad?

it's not difficult, and if you don't have any "special wishes" you can take one off the wall at most stores - if you want anything that is NOT in stock at the time of buying (color, model...) you are in for a WAIT. I ordered my Tele Thinline RI'72 (MIM, I know, but US is the same) early November 2003 and I guess they sent someone out to plant a tree THE VERY NEXT DAY, the guitar arrived end of February 2004!!!

[PeterUK]

I'm delighted for you. :D

I've often been tempted to dodge the import tax and duties, but if you get caught, not only can they double the tax and duty but they can also seize the goods!

Good for you. :D

BTW, I was under the impression that the local sales tax can be waived in some States if the goods are for export. Anyone in the USA confirm this?

A good news story involving Customs!

:D Peter

[SeanGephart]

I know that if you are from a state that doesn't have state sales tax, you can buy an instrument in another state (that does have state sales tax) without it (usually). I've only be able to do this a couple of times, as I don't travel much.

Of course, bartenders love me in Canada as I always tip them my coins :)

[Raymond]

Originally Posted by PeterUK

BTW, I was under the impression that the local sales tax can be waived in some States if the goods are for export. Anyone in the USA confirm this?

In some places only Peter, like in New Orleans. Some cities have adopted such a policy for tourist purposes. Other places simply have so sales tax like Delaware. In NYC certain articles are not subject to sales tax, to boost tourism also, and there's a period during the Xmas season in which the sales taxes is waved in DC for purchases up to a certain value that I can't remember. That's done to get business from the near states of Virginia and Maryland.

In New Orleans, for example, they use the same system I saw in France some years ago, pre-Euro era, in which you'd pay the sales tax at the time of the purchase but then in the airport you'd bring your receipts and passport to claim it back.

[PeterUK]

Originally Posted by Raymond

In New Orleans, for example, they use the same system I saw in France some years ago, pre-Euro era, in which you'd pay the sales tax at the time of the purchase but then in the airport you'd bring your receipts and passport to claim it back.

Thanks Raymond. They used the same system in Singapore when I worked there. It seemed to work well apart from the time I realised that I had checked all my bags, including the ones with the receipts in!

:D Peter

[Sarge]

Us guitar players gotta stick together. One day I was following a tractor trailer kind of close and unbeknownst to me I went through a red light that I didn't see. Suddenly I heard the police siren and flashing blue lights behind me. So, I pulledover and ask what I did wrong. The cop told me I ran the red light. I told him I didn't see it as I was looking to my left and right for the Guitar store. Upon noticing my tatoo on my arm of a stratocaster, he ask me if I played guitar. We talked for some time about guitars then he told me to be more carefull in the future and don't get a GAS attack at the guitar store. If we didn't share a common interest I would have gotten a ticket. Us guitar players gotta stick together!

[sparky]

Originally Posted by SeanGephart

I'm curious, is it very difficult to find American Fender guitars in Europe and abroad?

Here in the UK it's not difficult, just expensive; we pay about twice as much as you lucky Americans for the same guitar! That's far more than the additional cost of shipping, taxes and import duty.

[SeanGephart]

Does Ebay make this situation any better?

[Telemaniac]

Originally Posted by SeanGephart

Does Ebay make this situation any better?

Yes and no - it does mean you can import a guitar for much less than UK price at the moment, because of the strong pound against the dollar, which hasn't seemed to result in a reduction of cost for Fenders in the UK! Probably beause Fender probably still charge UK dealers in sterling (I import software from Philadelphia to resell in the UK, it's still the same price!). Musicians' Friend and Guitar Centre won't export Fenders to the UK.

I must have imported a dozen guitars through Ebay in the last two years, all of them have been really good - until the one that arived yesterday. Supposedly undamaged it has been heavily scarred and dented and retouched badly. Serves me right for buying a Gibson!

And that's the downside, you can't collect the goods, which means that you have to take a lot on trust - although through the TDPRI (thanks Erique who helped me last year with a 52RI) you can sometimes find out a little bit about the vendor.

[J-man]

Originally Posted by SeanGephart

That was very cool of him!

I'm curious, is it very difficult to find American Fender guitars in Europe and abroad?

No, not difficult at all, it's just that the strong pound against the dollar means that it is incredibly cheap to buy guitars in the US

[Seanycaster]

A colleague at work was in NYC with her husband. When GAS got to him he, naturally, succumbed to it. Thing is he bought a cheap case and a bunch of stickers along with the guitar and that night in their Hotel, he reliced the case. On his return home the case looked like it had been half way round the world with him. They walked through "Nothing to declare" and all was well. Theres nothing like sticking it to the Man!

[PeterUK]

Originally Posted by Seanycaster

A colleague at work was in NYC with her husband. When GAS got to him he, naturally, succumbed to it. Thing is he bought a cheap case and a bunch of stickers along with the guitar and that night in their Hotel, he reliced the case. On his return home the case looked like it had been half way round the world with him. They walked through "Nothing to declare" and all was well. Theres nothing like sticking it to the Man!

Be careful what you post here. Just because your friend decided to import a guitar and avoid the import duty and tax, doesn't mean that that purchase is now void of those charges. If HM Customs and Excise read this, they could decide to pursue the tax and duty plus a hefty fine, by requesting from you name of your friend and the nature of the purchase. Unlikley, but let's not tease the authorities into action.

By the way, I discovered that importing Vintage and/or Rare guitars are exempt from import duty and taxes. A good friend of mine who runs a great guitar shop here in Nottingham, recently imported a 1969 Rickenbacker and a 1970s double neck Gibson SG. Both were held in Customs while the C&E argued amoungst themselves what the definition of Vintage and Rare actually is.

In the end, they determined the Ricky was Vintage and let it pass without duties and taxes but they imposed an import tax and VAT on the Gibbo because they did not deem the 1970s era as Vintage and that the double neck was not a rare guitar as they were made in enough numbers to ensure that they weren't a rare guitar.

So based on that, now's the time to get you 1950s Tele. Buy in the USA and you've got no import tax or duty to pay. Well, so I'm told.

:D Peter

[SeanGephart]

I was going to ask something like that also,
could you just claim you took the the guitar with you,
or that if was a gift? it's sort of "cheating", but 40% duty/tax on guitar is out of hand...

[Telemaniac]

Officially, UK import tax is about 21.5% )17.5% VAT plus 3.4% on the new total) on the total cost of the goods INCLUDING shipping.

With a dollar rate around 1.85 it's still good, unless Fender actually allow the dollar rate to reduce the UK sterling price - although I can't see that happening.

[SeanGephart]

I was referring to the original post -

"A few minutes later he came back and told me that apparently there was a new kind of penalty tax on certain goods from the US, and that instead of the expected 3.7% I would now have to pay something like 18% import duty, plus 19% sales tax, plus an extra fine."

which looks like 37% to me...

[curtis]

Hi Peter

I would be really grateful if you could get some more details on this exemption, so that I can look it up - the duty and VAT means a lot of money on a vintage tele.

Thanks, David

[jhundt]

you ARE coming, aren't you?

[PeterUK]

Originally Posted by curtis

Hi Peter

I would be really grateful if you could get some more details on this exemption, so that I can look it up - the duty and VAT means a lot of money on a vintage tele.

Thanks, David

OK. Here's is what I found out.

Customs and Excise have special classification teams which will help you classify specific guitars. If you can prove it to be vintage (have the specific numbers of guitars made in that year, etc.) then they MAY claissify it as Vintage and potentially they will exempt you from Import Duty but may subject it to VAT.

If, however, you can prove it is both vintage and rare - loosely defined as not being used for purpose, i.e. to be added to a collection - they MAY classify it as Rare. If you prove it was owned by someone famous, then it MAY be also classified as both Vintage and Rare.

From the conversation I had with the C&E people, it depends on whether or not you're prepared to argue the case and whether they are prepared to listen, and which paticular officer is dealing with your claim.

This was experience of my friend who argued that both were vintage and rare but only managed to get one classified as such.

If not, you'll have to pay 3.7% duty and 17.5% VAT.

Sadly, no black and white answer, but worth arguing as you could save a pile of money!

Final piece of advice. Get it sorted before you make the purchase and they will issue you with a Classification Certificate to include with the shipping documentation or for you to present to the Officer at the point of Import, e.g. airport.

Hope this - sort of - helps.

:D Peter

[curtis]

Thanks for the extra info Peter, this is very interesting.

Up until now the only angle that I could find is something called Temporary Importation where a guitar is being imported for an exhibition and will be taken out of the UK within a period of two years.

I will do some more digging over the next week or two, try to get the legislation and will let you know the result.

One test of rarity might be the price measured in multiples of a new Tele!

David

[Tiddles]

Wel