Buying a boat vs. buying the LLC that owns it.

zip · 31 May 2015, 22:55

The boat I looked today is LLC (Limited Liability Corporation) owned.
I will definitely contact legal counsel and my accountant if I decide to make an offer to purchase.
From what I determined in my brief Internet search to day there is no CA sales tax if the LLC is purchased, which on a 35K dollar boat would save you around $3150. You then pay an annual LLC tax of $800.
If I buy the boat out of the LLC, I pay the sales tax, and around 1% of the boats value a year in taxes, which would be around $350.
So, 10 year in an LLC would be around $8000.
10 year of private ownership of the boat would b around $6650, without considering the depreciation.
There are also legal advantages to be considered if I ever decide to run the boat as a charter.

Does anyone have any experience with a LLC?

jyasaki · 01 June 2015, 14:25

An LLC is a corporate entity. If you go that route, look into other tax burdens; you're not just buying a boat, you're buying a corporation that has a boat as an asset. Lots of legal implications, I'd guess.

jky

ShinyShoe · 01 June 2015, 17:42

I'm confused. If I buy a boat from a shop I pay sales tax but no recurring annual tax...

Poly · 01 June 2015, 18:24

Quote:

Originally Posted by ShinyShoe

I'm confused. If I buy a boat from a shop I pay sales tax but no recurring annual tax...

Thats because you live in a country with no boat registration! If they could they would!

ShinyShoe · 01 June 2015, 19:32

Ahh... So a company owning a boat doesn't have to pay registration? Round here that'd be called a fax avoidance scheme!

Poly · 01 June 2015, 19:34

Quote:

Originally Posted by ShinyShoe

Round here that'd be called a fax avoidance scheme!

No that would be email ;-)

Pikey Dave · 01 June 2015, 21:59

Quote:

Originally Posted by ShinyShoe

I'm confused. If I buy a boat from a shop I pay sales tax but no recurring annual tax...

What we need are loads of rules & regs & compulsory qualifications/inspections etc. Then we we'll be able to have an annual tax to pay for it all, just like the Cousins & Europeans, I'd hate to miss out.

jyasaki · 02 June 2015, 14:14

Quote:

Originally Posted by ShinyShoe

I'm confused. If I buy a boat from a shop I pay sales tax but no recurring annual tax...

Here in California, if I buy new, I pay the price of the boat, sales tax on that price (generally in the 8-10 percent range depending on county tax rates), a bi-annual registration fee to the Dept of Motor Vehicles (not sure what the rate is, but seems to be about 3-5% of value), plus an annual "Luxury Tax" paid to the county I live in (because apparently having a boat is considered too posh for them not to make money on.) That's the mandatory stuff; does not include voluntary costs like fuel and insurance.

jky

Glow · 02 June 2015, 17:33

Quote:

Originally Posted by Poly

No that would be email ;-)

very good!

zip · 03 June 2015, 13:19

JKY,

In Southern California we don't have to pay that once every two years DMV fee based on the value on the boat. On cars and RVs, yes, but not boats. It is only around $10.

SIBRider · 03 June 2015, 20:50

Here in Oregon we don't pay annual tax on cars or boats. Just registration fee. On boats it's by length per foot. Oh, an we don't have sales tax either.

jyasaki · 04 June 2015, 07:41

Quote:

Originally Posted by zip

JKY,

In Southern California we don't have to pay that once every two years DMV fee based on the value on the boat. On cars and RVs, yes, but not boats. It is only around $10.

Sure you're not thinking of trailers? That's a 10 year $10 fee.

Pretty sure my boat reg was more than $10. More like $50ish. It is every 2 years though.

jky

ncp · 04 June 2015, 13:26

I paid $25 to register mine last year (I opted out of paying the the quaga muscle fee since I will never be taking the Willard to a fresh water lake). I've never had personal property tax charged on it either - I think the value is under the threshold.

steco1958 · 04 June 2015, 13:42

I am soooooooooooo happy to be English based on what I have just read !!!

jyasaki · 05 June 2015, 00:05

According to DMV, it's $36 (quagga) or $20 (non quagga) per 2 years. Initial reg is a bit more.

Property tax may be county based.

jky

ncp · 05 June 2015, 00:43

You're right, $20 for 2 years.

zip · 05 June 2015, 02:03

yep, that's what I remember. It used to be $10 for two years. A friend of mine tried to opt out of that fresh water deal, and he said he got denied by the DMV.

I thought the yearly tax was CA wide.

prairie tuber · 07 June 2015, 04:00

Annual taxes on boat and cars??? Whatever happened to the land of the free and the home of the brave?

Pikey Dave · 07 June 2015, 06:34

Quote:

Originally Posted by prairie tuber

Whatever happened to the land of the free and the home of the brave?

They all moved to Vegas & Atlantic City & opened casinos😏

.....sh1t happens.......

jyasaki · 09 June 2015, 18:39

Quote:

Originally Posted by prairie tuber

Annual taxes on boat and cars??? Whatever happened to the land of the free and the home of the brave?

They're Free and Brave and taxing everyone else.

jky