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If you are considering the creation of a corporation to register a
vessel please make sure you explore all aspects of the transaction.
Others have already touched on state tax issues as well as personal
liability. But you also need to consider federal tax issues as well. We
researched having the company I own purchase our last boat. What we
found was that if a corporation owns to boat, and you use it for
personal use, you are liable for income tax on the fair market
lease/charter rate for the period you used the boat. Note that this is
fair market, not whatever you decide to declare.
If the fair market charter rate for your vessel is $5,000/week and you
use it for six weeks in a year, that $30,000 is considered income to
you. Thus you are liable for income tax on that amount. Yes many, if not
most, people don't declare this. But it is a liability, and if you chose
not to declare it and get audited, the IRS will have unkind words to say
to you.
You also need to be aware that if you use the boat for anything which
could be considered business use you need to address all the commercial
operation of a vessel issues. There is a difference between you taking a
client out on your own personal boat, and taking the same client out on
a boat owned by the corporation.
IANAL, your mileage may vary, etc., etc., etc.
-Jim
M/V Maņana
Seattle, WA
