European delivery works out because you don't pay new car tax if you buy the car in Europe, drive it enough so it's no longer new (~100 miles or so) and ship it home. This exemption was originally put in place because a bunch of GIs wanted to bring home the sporty little cars they drove in England during WWII.
That's a really astute observation. I've heard of people doing this before, but didn't realize that the whole auto-vacation was about a tax dodge. Really interesting.
The BMW fan wiki suggests that's not a tax/tariff dodge as much as the fact that BMW doesn't pay the incentive payment to dealers for euro delivery cars:
In particular, the reverse doesn't work as easily, so a program where Europeans fly to California to buy a car and ship it back wouldn't be a great idea financially. It varies by country, but in many European countries you need to have resided abroad for at least one year in order for a car purchased abroad to count as a personal effect that you can bring back with you tax-free.
Wouldn't you still have to pay sales tax on it in California? When I moved here I had to pay retroactive sales tax on a vehicle leased 2 years earlier in a different state.
Only if you're a California resident. If I reside in Oregon, purchase a car, and change my residence to California, it's an $18 non-resident fee plus the $100 registration. No sales tax paid.
Only if purchased > 1 year from registration (or first use in California). If purchased within the last year you pay the tax difference between the states. You can work it out in the online calculator.
European delivery works out because you don't pay new car tax if you buy the car in Europe, drive it enough so it's no longer new (~100 miles or so) and ship it home. This exemption was originally put in place because a bunch of GIs wanted to bring home the sporty little cars they drove in England during WWII.