Federal vs. State Registration
According to Sean Morris, one of the foremost experts on JDM vehicle importation, most people can not grasp the difference between vehicle legalization and vehicle registration.

# Legalization – a vehicle in full compliance with Federal Motor Vehicle Safety Standards, and Environmental Protection Agency standards.

# Registration - registration is the responsibility of the individual states and localities. Most states do not check to see wether a vehicle is federally legal. If they see the vehicle, and are paid the registration fees, they will give registration for the vehicle.


Many people seem to get confused that if a vehicle is registered, that it is legal or "legalized". A registered vehicle is just a registered vehicle. Registration could still be revoked by the DOT, EPA, or customs service, if the vehicle was found to have entered into the country fraudulently.

NHTSA is not responsible for regulating the operation of motor vehicles on public roads in the U.S. nor for titling or registering motor vehicles for such operation. That is instead the responsibility of the individual States. Some States may require a manufacturer's certificate of origin (MCO) or manufacturer's statement of origin (MSO) to register a new motor vehicle. These are not federally required documents. NHTSA, therefore, is not in a position to offer guidance to prospective vehicle manufacturers or vehicle purchasers on obtaining a needed MCO or MSO. Consumers with questions regarding these documents should direct those questions to their State’s Department of Motor Vehicles (DMV). Prospective manufacturers seeking guidance on obtaining MCO or MSO documents should contact the American Association of Motor Vehicle Administrators (AAMVA) at 703-522-4201 or visit that organization's website at http://www.aamva.org.

99% of the time "State Titled" and "State Registered" translates to "Illegally imported and titled as kit car". Cars that appear "legal" (to a state) can be impounded by the Feds. Likely, no. Possible, yes. It has happened before (in AZ, in particular) and may be stepped up if the Feds decide they're "fed up" (no pun intended) with the flouting of the law. Many illegally-imported Skylines roam the streets unmolested on a regular basis. However, there's always the chance that something goes wrong (usually due to an accident, a vandalism / theft, or simply an "anonymous call") that brings the car to "official" attention.