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Registration Question

Discussion in 'General Yachting Discussion' started by island21638, Sep 9, 2008.

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  1. island21638, Sep 9, 2008
    #1
    island21638

    island21638 New Member

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    I have always had a DE registration and paid no tax. I live close to DE and thus run in DE about 51% of the time? I am looking to live on my next boat for about two years while I travel the loop. I was told to register my next boat about 600K ( lots of saved taxes) into a DE corporation. Has anyone done this or any better ideas out there. I hate to pay taxes in a state that I won't be in?
    Thanks in advance
  2. K1W1, Sep 9, 2008
    #2
    K1W1

    K1W1 Senior Member

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    I think your first line says it all.

    But bear in mind........


    No one I have seen here yet posts their professional position as being a tax attorney or tax specialist......that not always your ears will relay the truth.
  3. NYCAP123, Sep 10, 2008
    #3
    NYCAP123

    NYCAP123 Senior Member

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    If it's legit, wonderful, but if you're talking of opening a shadow corp. or a P.O.Box residence consult your attorney. I've heard that has been a red flag for the IRS for many years now.
  4. island21638, Sep 10, 2008
    #4
    island21638

    island21638 New Member

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    Thank you everyone since I will be living on the boat for a few years I will charter if possible every now and then. Yes I do have my Captains license. Will I make money, probaly not but I hope it will pay for the beer. What other states have no tax on boats?
  5. Pascal, Sep 10, 2008
    #5
    Pascal

    Pascal Senior Member

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    Rhode Island has no tax. it's ok for a De. Corp to own a boat documented with a homeport in RI.

    you really need to consult an attorney who specializes in that field.

    Problems happen when people register/document a boat in one state to avoid taxes but keep it in their homestate. If you travel with the boat, chances are you're not going to exceed states limits after which you need to register locally (90 to 180 days) and pay taxes...

    and some states have exemption for out of state residents who want to register a boat because it spends time in their waters. For instance, in Florida, if you've owned the boat for more than 6 months and purchased it without intent of moving it to Florida waters you can register it without paying sales tax.

    bottom line, rules vary from state to state, consult a maritime attorney.
  6. island21638, Sep 10, 2008
    #6
    island21638

    island21638 New Member

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    Thanks Pascal,We have a home in Fl that we will be selling. I did not know that about the taxes in Fl. We will be on the boat 100% of the time,we will own no other homes just the boat and never be in any state for more than 60 days max. This is why I asked . Why pay tax in a state that I have nothing to do with other than I bought the boat there.The boat will always be in the corp name just as my homes are. Thank God I did this years ago. It really gives you protection if you ever should need it. Just keep the corp spotless.
    Right now my boat is docked in Md on the C&D canal. I am 5 minutes from DE. So most of my boating is in DE. Perfectly legal. I run up to AC often also NJ. I seldom boat in Md, did it for years now looking for new spots.
    See you on the loop next year.
    Now to find the perfect boat.


    Thanks Again
  7. Pascal, Sep 10, 2008
    #7
    Pascal

    Pascal Senior Member

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    the reason people get in trouble with delaware corp. or when they homeport/register in another state to avoid sales/use tax is that they use or keep the boat in their home state waters. As long as you don't do that, then you're fine.

    what kind of boat are you looking for?
  8. NYCAP123, Sep 10, 2008
    #8
    NYCAP123

    NYCAP123 Senior Member

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    Pascal,
    Read that post again.
    "Right now my boat is docked in Md on the C&D canal. I am 5 minutes from DE. "
    That 5 minutes may as well be 5 hours, especially since that's a Md. zip.
    Even if most of his boating is done in Del. how do you prove that if their boats have been docked in Md? I'm guessing that the home is in Md. from that zip. I suspect that the paper trail leads directly to Md., not Del.
  9. island21638, Sep 10, 2008
    #9
    island21638

    island21638 New Member

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    I won't have a home port.
    Looking for 3 year old to new 38-43 trawler with a single. Want to see the new North Pacific and Fanthom yachts. If the stock market improves OA and Selene would be a nicer choice but I am always open. The reon for a newer boat is I am a neat freak and it would be hard to find a flawless older boat
  10. NYCAP123, Sep 10, 2008
    #10
    NYCAP123

    NYCAP123 Senior Member

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    "flawless" boat?:D :D What's that. I always step on board with the thought of what will break next.:cool: (Just playing with ya skip:) )
  11. island21638, Sep 10, 2008
    #11
    island21638

    island21638 New Member

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    If you really want to have some fun, take what you paid for the boat, cost of money, depr,maintance,gas,ins,dockage,BEER, and than divide by how many times you used it and there will be a For Sale sign on it. The boat I am selling cost me about $2,000 per used day last year. WOW. This is why I rather live on it full time and enjoy the loop.
  12. Loren Schweizer, Sep 10, 2008
    #12
    Loren Schweizer

    Loren Schweizer YF Associate Writer

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    As you mentioned subsequently in this thread, you owned Florida property when you set up the DE Corp. which is a no-no if you got caught in FL waters.
    As Pascal mentioned using the boat out of state for six months and then cruising in FL waters without a tax liability (a separate issue from the DE registration), most folks are unaware that the six months has to be in a U.S. Taxing Jurisdiction, i.e., not, for example, in Bimini.
    There are many Documentation services (half a dozen here in FLL) that will advise you of your options along with, as K1W1 mentioned, a disclaimer to consult legal counsel knowledgeable in tax law.

    Full disclosure: While not a lawyer, I know enough law to keep my clients out of hot water.
  13. island21638, Sep 10, 2008
    #13
    island21638

    island21638 New Member

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    Thank you Loren, To try and make things clear, I have a DE corp, it pays taxes in DE. The boat is kept in MD but used over 60% of the time in DE and other states. I would have to say 5 % in Md. I have homes in Fl,Md. Fl is a second home that I go to about 4 times a year. The boat was bought used in Md with DE reg, is still has a DE reg under my corp name. Homes are in corp names This is legal,it is much cheaper to transfer property in a DE corp even in Md. Pefectly legal. Let me be clear I am not looking to break the law but if I buy the new boat in lets say CT would I pay taxes in CT since at that point I will have no homes in any state but the boat will be my home for the next two years. So what state would you pay taxes in or not. Thus DE. If I am not in any state for long I can't see what I am doing wrong? Maybe I am missing something. For those loopers what do you do when you sell your homes?