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Old 31 May 2015, 18:55   #1
zip
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Buying a boat vs. buying the LLC that owns it.

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?
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Old 01 June 2015, 10:25   #2
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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.

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Old 01 June 2015, 13:42   #3
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I'm confused. If I buy a boat from a shop I pay sales tax but no recurring annual tax...
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Old 01 June 2015, 14:24   #4
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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!
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Old 01 June 2015, 15:32   #5
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Ahh... So a company owning a boat doesn't have to pay registration? Round here that'd be called a fax avoidance scheme!
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Old 01 June 2015, 15:34   #6
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Round here that'd be called a fax avoidance scheme!
No that would be email ;-)
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Old 01 June 2015, 17:59   #7
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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.
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Old 02 June 2015, 10:14   #8
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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.

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Old 02 June 2015, 13:33   #9
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No that would be email ;-)
very good!
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Old 03 June 2015, 09:19   #10
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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.
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