Most cost effective state to register / own an airplane within an LLC in?

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Johnbo

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Johnbo
Looking for a bit of anonymity and am considering forming an LLC, and hiring a registered agent so that my plane can be owed and registered that way.

Is there a consensus as to which states have the lowest annual costs associated with this setup? I’m assuming I will need to consider one time setup costs, annual LLC costs, annual registered agent costs, annual registration fees, property taxes, and ????

thx!
 
What is your goal? Why will you have an LLC own your plane?

If you have an LLC based in any location other than your home base, you'll be:

1. Adding the expense of maintaining an LLC in the state in which the LLC is organized;
2. Adding the expense of registering and maintaining the foreign-state LLC in your home (base) state;
3. Substantially increasing the likelihood that your home state will tax your aircraft as a business asset; and
4. Making money for whatever service sold you the bill of goods that placing your plane in an LLC will (except in specific business circumstances) save you money or protect you from liability.

Bonus: Many people think (because what a friend told them or what they read in an advertisement) that having a plane held in an LLC in a state other than your home base will shield you from taxes in the home state - and it might, for a while, after which you'll pay all the tax, plus interest, plus penalty. Fun stuff.
 
Furhter, even if you put it in an out of state LLC, you may owe some taxes/filing fees to the state you're based in.

I agree with the two above but the magnitude depends on what state you are based in.
 
Johnbo said:
Looking for a bit of anonymity
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Depends on who or what you want anonymity from. Regardless, when it comes time to register the aircraft most personal anonymity is lost due to regulatory requirements.
 
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For what it is worth my insurance guy also said, a good lawyer is going find a way around an LLC to get to you, then again he sells insurance. :)
 
Colorado is $25 per year. But depending on your state, you might not be buying much anonymity. Some states require member disclosure as part of the publicly-available annual report.

liability protection - separate issue. No form of entity will protect you from responsibility for your own actions injuring a person or damaging property.
 
midlifeflyer said:
liability protection - separate issue. No form of entity will protect you from responsibility for your own actions injuring a person or damaging property.
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I would think if you ever were involved in a maintenance decision, put oil or gas in the plane they are going to sue you anyway.
 
Total WAG - Delaware
 
Delaware is ok - many corporately owned LLCs are formed in Delaware and I used to form them all the time in Delaware. However, as @SCCutler so correctly points out, you will likely gaining nothing by forming an LLC in some state other than your home state beyond a bunch of headaches and the law of unintended consequences. If you are considering co-ownership at some point, then owning an airplane in an LLC has a number of advantages over owning it in a partnership and that might be a good reason to go through the time and expense of properly forming an LLC. But again, I wouldn’t bother with an out of state LLC.
 
Anonymity from whom? There may be other ways to achieve it without playing the taxman-keepaway game.
 
Depending on what state you're basing the airplane in, a lot of states just tax based wherever the airplane is based or spends a significant amount of time.

I never did it because it just seemed like a lot of extra steps and hassle for no real benefit. When you start digging into most things like this you quickly find out that entities that write tax laws are actually not stupid enough to let you just put a different name on something and avoid paying. You'll also find that if you're a sole owner it really doesn't shield you from liability the way some people believe...
 
The anonymity is limited to the casual googler and flightaware geek. A few states allow you not to disclose the members or managers of a llc and your annual report can be filed by a straw man like an attorney. It won't stop a plaintiffs attorney from finding out who owns the thing.
 
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