I am a yacht broker representing both the buyer and seller in a transaction involving a boat that is titled into a Delaware limited liability corporation (LLC). The buyer has completed the sea trial and survey, and the parties are preparing to close, pursuant to the provisions of the vessel purchase agreement. The buyer is also considering the purchase of the LLC itself, to avoid payment of California sales or use tax and to continue the liability protections that are available through LLC ownership. Can you offer some guidance as to the significant issues that we should be aware of in this type of transaction?
We are often asked to comment on the pros and cons of ownership of a boat by a corporation or LLC, and I will note at the outset that it’s not for everyone. However, before we get into the pros and cons of owning or buying a boat through a business entity — whether a corporation or an LLC — we need to address a logistical issue raised by our reader.
He indicated that the parties are planning to “close” the deal pursuant to the provisions of the vessel purchase agreement, but that the...
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2 Responses
Can you provide the same clarification as to sales and excise tax in the state of Washington for the purchase of an LLC in California of a documented vessel to be relocated to Washington? Would that LLC also be exempt of both in the state of Washington?
This is such a very informative article. Never thought of this before. Surely helpful, especially to those who are looking into obtaining a boat.