Taxes on imported vehicle

I moved to the US on an F-1 student visa last December and brought my car with me. I didn't import it at the border as I wasn't sure I would be keeping it here. I decided to keep it here, so I took my manufacturers letter, registration, import form and EPA form to the local CBP office. The guy looked kind of confused, and he stamped my registration and manufacturers letter and said that's all I would need to register.

I next went to the County Clerks office to register, but they said I needed an appraisal of my vehicle and I need to pay sales tax. I didn't read anything about that in the literature I read about importing a vehicle, and there's nothing about that on the Tennessee DMV website either for people bringing in vehicles from out of state.

Has anybody every encountered this before? My car is a piece of crap, worth probably about $2000 Canadian or less. But sales taxes here are around 16% I think, I don't want to fork over $320 when I already paid taxes on the car when I bought it >:(

There shouldn't be any taxes, it's a personal effect. Show them the CBP clearance, the tariff code on it should reflect that it's a personal effect if the CBP guy did his job correctly.

Obviously State sales tax laws vary but you haven't actually acquired anything, tell the agent at the DMV it's the same as an interstate title transfer.

Update on this, I contacted the state revenue board and got the following response:

Technically, what you face is a use tax. This was enacted at the same time ( 1947) as the sales tax and has the same rates, but is imposed upon the importation of tangible personal property into Tennessee for use in Tenn. the same as if purchased in Tenn. ( Ref. Tenn. Code Ann. Sect. 67-6-206). Tenn. Code Ann. Sect. 67-6-210 does provide an exemption for the importation of a personally owned motor vehicle from another state during a change of legal residency but an equal exemption for importation from another county is not present in
statutory language.

So you're stuffed (unless you register it in another State first). Being Tennessee and being fairly far inland the legislature probably didn't think about it back in 1947. You get these sort of situations with the DL laws as well, because the State tries to comply with the Real ID Act and makes a hash job of it because they simply enact what DHS says in their guidance rather than actually examining how to make their law fit with the Federal law.

So you end up with situations where States either require you to have a visa in your passport or an I-94 or they won't issue you a DL. Well it is actually possible to be in the US as a Canadian for an extended period of time without an I-94 (on TN-1 it's optional to get one) and you have no visa either.

Some States like Florida, Texas and to a lesser extent California actually examine the situation a lot more carefully so their laws make more sense but if it's an inland State or a State with a small population, prepare yourself for wackiness.

The one that got me was all that fuss in New York about issuing a DL using the "alternate" provisions of the Real ID Act which to any objective observer was a perfectly sensible thing to do given the number of Canadians who live and work there, but it turned into a big pile of nonsense about "illegal immigrants" getting licences.

Ya, it seems not in the "spirit" of the tax, since it was imported as part of my personal property and I have already paid taxes on it, but I'm stuck paying it for now. I am going to appeal to the state commissioner of revenue though in hopes that they'll review the legislation and issue a clear interpretation.