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Old 06-05-2018, 21:57   #1
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LLC,s Best state for sailboat ownership.

I'm getting close to purchasing our formal livaboard boat and this time i'm going to go the LLC route. Anyone have any suggestions /preferences and why, for which state is the best to file it in for boat ownership?
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Old 07-05-2018, 06:29   #2
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Re: LLC,s Best state for sailboat ownership.

It is difficult to answer your question without understanding your reasons for owning the vessel under an LLC. Is the reason for taxes, liability, business, privacy, or something else?
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Old 07-05-2018, 06:51   #3
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Re: LLC,s Best state for sailboat ownership.

There is that word again..."best"...meaningless. As posted, question can only be answered if you define your criteria for what the "b" word means.

Does a "formal liveaboard" have a formal dining room?
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Old 07-05-2018, 06:57   #4
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Re: LLC,s Best state for sailboat ownership.

[sarcasm]Oh yeah, I would absolutely go with whatever legal and financial advice I got here... completely. [/end sarcasm]

Usually people who need to set up an LLC would have a lawyer who could answer this for them... if not, they need a new lawyer.
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Old 07-05-2018, 07:15   #5
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Re: LLC,s Best state for sailboat ownership.

Like previous replies, depends on what you define as best.

Best for initial purchase IE saving sales tax? Try RI or one of the other states that doesn't make you pay 6-7% sales tax on used boats.

Best for ongoing costs? Not California (or a few other states) that charge an annual ad valorem taxes on boats and other goods.

Best as a place to declare your state of residency? Lots of additional variables there like states that charge state income tax (do you have ongoing, taxable income), state where you might want to vote, or ???
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Old 07-05-2018, 07:27   #6
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Re: LLC,s Best state for sailboat ownership.

Why would you want to form an LLC to buy a boat as opposed to buying an LLC that already owns a boat?
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Old 07-05-2018, 07:57   #7
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Re: LLC,s Best state for sailboat ownership.

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Why would you want to form an LLC to buy a boat as opposed to buying an LLC that already owns a boat?
Probably because 99% of the boats in the US are privately owned so the selection of LLC owned boats will be very, very limited.
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Old 07-05-2018, 08:06   #8
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Re: LLC,s Best state for sailboat ownership.

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Originally Posted by billknny View Post
[sarcasm]Oh yeah, I would absolutely go with whatever legal and financial advice I got here... completely. [/end sarcasm]

Usually people who need to set up an LLC would have a lawyer who could answer this for them... if not, they need a new lawyer.
While the OP should ultimately seek pro legal and financial/tax advice, there are many here with relavant experience in this subject area...some of them are even pros.

No harm in educating yourself on a subject via Internet searches and discussions, then consulting appropriate pros. You are better equipped to ask intelligent questions and make good decisions with some background knowledge.

Also, not all pros are created equal, Ive had experience with incompetent "pros" in these fields, good basic knowledge of the subject area can help to spot quacks too.
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Old 07-05-2018, 08:10   #9
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Re: LLC,s Best state for sailboat ownership.

OP: what is your State of residency?
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Old 07-05-2018, 08:58   #10
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Re: LLC,s Best state for sailboat ownership.

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Originally Posted by belizesailor View Post
While the OP should ultimately seek pro legal and financial/tax advice, there are many here with relavant experience in this subject area...some of them are even pros.

No harm in educating yourself on a subject via Internet searches and discussions, then consulting appropriate pros. You are better equipped to ask intelligent questions and make good decisions with some background knowledge.

Also, not all pros are created equal, Ive had experience with incompetent "pros" in these fields, good basic knowledge of the subject area can help to spot quacks too.


Agreed. Start here for some basics and maybe get the answer you need. If not you come away with a little more knowledge and the ability to make a smarter decision if it becomes necessary to contact a "pro".
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Old 07-05-2018, 09:35   #11
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Re: LLC,s Best state for sailboat ownership.

State of residency won't matter much. The state where the boat is moored matters more. Most states have a "use" tax if you have not paid sales tax. They also make you pay the difference between the tax rate you paid in another state and their sales tax rate.

There are a few exceptions but the big question is where are you going to moor the boat. If you are going cruising internationally that is a different situation. Most owners buy the boat a couple of years before taking off to cruise so you are back to the situation in paragraph one.

And I agree with the post that if you need an LLC then you also need a tax lawyer.
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Old 07-05-2018, 09:38   #12
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Re: LLC,s Best state for sailboat ownership.

Purchasing an existing LLC means that you are purchasing assets and liabilities of old LLC-current and contingent. Not a good idea
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Old 07-05-2018, 09:45   #13
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Re: LLC,s Best state for sailboat ownership.

An LLC is a legal person so the State of your residence may not matter. Some States require you to pay sales tax on out of state purchases. Talk to your attorney or hire one and ask your particular questions. As said above R.I. is a good State if all you are doing is avoiding sales tax. Their Dept. of State is helpful. Just remember to get a tax ID number if you want to open a bank account.
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Old 07-05-2018, 10:02   #14
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Re: LLC,s Best state for sailboat ownership.

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Originally Posted by svGenesis View Post
I'm getting close to purchasing our formal livaboard boat and this time i'm going to go the LLC route. Anyone have any suggestions /preferences and why, for which state is the best to file it in for boat ownership?
I have had a similar question on my mind and would be interested to know what the perceived advantages are in the LLC route. I also have read that MD is better for initial purchase than VA for example due to sales tax and/or registration fees. There are a lot of folks with a lot of experiences on this forum that could provide some useful insights and I too have received bad advise from both financial and legal "pros". Please provide direct experiences, not speculation or guessing.
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Old 07-05-2018, 10:25   #15
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Re: LLC,s Best state for sailboat ownership.

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Originally Posted by stormalong View Post
State of residency won't matter much. The state where the boat is moored matters more. Most states have a "use" tax if you have not paid sales tax. They also make you pay the difference between the tax rate you paid in another state and their sales tax rate.

There are a few exceptions but the big question is where are you going to moor the boat. If you are going cruising internationally that is a different situation. Most owners buy the boat a couple of years before taking off to cruise so you are back to the situation in paragraph one.

And I agree with the post that if you need an LLC then you also need a tax lawyer.
Yes, location of boat is usually most important, but residency can have some relevance too: taxes, fees, registered agent address (handy if you live in State), need to register as a "foreign" biz...etc. Less significant, but still factors to consider.
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