State of residency for a full time live-aboard

[bumpkin]

Can you tell us benefits of putting the boat in an LLC?

I was told it was a good way to sell the boat. I would sell the Llc and its assets, the boat, rather than selling the boat.

It may help the next owners attain insurance. Geico has a policy of no more than 4 owners on boats they insure. The Llc will own the the boat while we use it and while the next owners use it.

It should protect against hidden liens and may limit liability. The rules are picky for keeping the Llc at arm's length. Llc must be at arm's length to have any liability limiting usefulness.

Lisa and I cannot pay for any expenses. We have to use an Llc credit card and bank account. It seems stupid to me in that we fund the accounts. Llc must pay its own credit card bill from its money that we put in the bank account.

We cannot have the same login. We must leave our account and relog in everytime we go from one to the other. Currently we bank at the same bank as the Llc. I'm not sure how long that will last.

The Llc and advice as it relates to water was provided by a maritime lawyer. Maintaining the rules between the Llc, Lisa, and myself is being watched over by our nonboating lawyer-accountant.

Hope that helps you understand why we would spend the money.

Mike

 

[BandB]

The section of the law that you have referenced may appear to say 60 days per visit, but that isn’t the way the WA tax authorities enforce the law. WA tax law is famous for being vague and difficult to interpret, as evidenced by many discussions here on TF.

In practice, a non-resident boater has 60 days per year to be in WA without tax consequences. Beyond that, you need to deal with cruising permits and repair exemptions, both of which create other complications. Stay beyond 60 days without those other exemptions and you will get a tax bill if you show up on the tax authority’s radar. By far the best practice for non-WA boaters is to comply with the 60-days-per-year-rule and avoid the debate with the tax man.

I know you are in Florida and this is unlikely to affect you, but it’s important for other readers to have accurate info to stay out of trouble.

It very definitely did effect me and we did utilize section 5 at 60 days per visit. Now we're being told by some that's not what it says. We did this with two boats.

 

[BandB]

I was told it was a good way to sell the boat. I would sell the Llc and its assets, the boat, rather than selling the boat.

It may help the next owners attain insurance. Geico has a policy of no more than 4 owners on boats they insure. The Llc will own the the boat while we use it and while the next owners use it.

It should protect against hidden liens and may limit liability. The rules are picky for keeping the Llc at arm's length. Llc must be at arm's length to have any liability limiting usefulness.

Lisa and I cannot pay for any expenses. We have to use an Llc credit card and bank account. It seems stupid to me in that we fund the accounts. Llc must pay its own credit card bill from its money that we put in the bank account.

We cannot have the same login. We must leave our account and relog in everytime we go from one to the other. Currently we bank at the same bank as the Llc. I'm not sure how long that will last.

The Llc and advice as it relates to water was provided by a maritime lawyer. Maintaining the rules between the Llc, Lisa, and myself is being watched over by our nonboating lawyer-accountant.

Hope that helps you understand why we would spend the money.

Mike

It looks like you're receiving excellent advice on separation. Yes, it can get humorous. One additional thing I might add to your protections if you don't already have it. When you use the LLC's boat, do you pay the LLC? Then do you have an agreement/contract that relieves the operator or renter of all liability?

Without such agreement, and they are subject to legal challenge, if you have an accident, the LLC incurs liability but also you as operator incur personal liability? I'm guessing you have something to protect you.

I advise anyone setting up an LLC to use lawyers and accountants as he has done. Otherwise, you may just be spinning your wheels and wasting your time and money.

 

[dannc]

...
Think the same issues applies to RVs and cars. People game it. No moral or ethical reason not to. Still, we’re one country. Wonder if taxation at a federal rather than state level would be more efficient and fairer.

The idea of the Federal government taxing our properties is beyond scary. It is bad enough I don't own my real estate, I just lease it from the county...

We almost had to sell our land years ago because the property tax went up so much. The irony is that our land is prime development land and the people in power don't like development, well they do, if it benefits them. Their tax increases almost forced us to sell our land which would have meant more development, which they hate or so they say.

I know a family, who several generations back, lost the family land because the widow grand mother could not pay the property tax and the sheriff sold the land to pay the taxes. Today, that land has sprouted subdivisions, strip malls, mega churches, car dealers, etc. The land is worth millions per acre. The part that really ticked me off, is that the mega church started as a little, itty, bitty country church on land donated by the man who died. His grave is in the church yard, but not cared for at all the last time I saw it.

The states need to compete on taxes and other issues. I want the ability to leave a state that is messing up spending and taxes and go to a state that is more responsible.

Later,
Dan

 

[guy with a boat]

It very definitely did effect me and we did utilize section 5 at 60 days per visit. Now we're being told by some that's not what it says. We did this with two boats.

I realize that it did affect you and you apparently avoided being taxed. My clarification was intended to be helpful to others, not knowing if you plan to return to WA state. It may also be helpful to you at some point.

I can’t argue with your interpretation of the law based upon the wording, but I can tell that’s not how they enforce the law.

 

[BandB]

I realize that it did affect you and you apparently avoided being taxed. My clarification was intended to be helpful to others, not knowing if you plan to return to WA state. It may also be helpful to you at some point.

I can’t argue with your interpretation of the law based upon the wording, but I can tell that’s not how they enforce the law.

And I spoke today with a builder there who agrees with me and says his customers have had no issues. Sounds like it may be specific counties. I intend to make some calls and report back what I find. It may be a couple of days before I can.

 

[twistedtree]

And I spoke today with a builder there who agrees with me and says his customers have had no issues. Sounds like it may be specific counties. I intend to make some calls and report back what I find. It may be a couple of days before I can.

I'm very interested to hear what you find. I have been operating under the same understanding as Guy With A Boat, but for whatever reason I was not paying attention to section 5 as BandB points out, and I can't disagree with his reading of it.



Keep in mind that I have been told things by DOR people that I challenged as not being reflected in the laws or any published guidelines, and I never heard boo afterwards. So I don't think all of them have a common understanding.