I'm starting a small landscaping business and forming an Idaho LLC. I want to buy a truck that will be used 100% for the business. Can the LLC own the vehicle outright, or do I need to own it personally and lease it to the LLC? What are the insurance and tax implications? Any advice appreciated.
LLC
Can an Idaho LLC own a vehicle used for business purposes?
Yes, an LLC can own a vehicle. It's common. Just make sure the title and registration are in the LLC's name. Insurance might be a bit higher but not a big deal. I did this for my plumbing company.
You'll need an EIN for the LLC to get the title in its name. Also Check with your insurance agent—some personal policies won't cover commercial use. Good luck!
Just don't forget to file the annual report. Idaho LLCs are easy but the fees add up. Also, if you finance the truck, the lender might require a personal guarantee anyway.
My accountant told me it's better for the LLC to own it for liability reasons. If someone sues, they can't come after your personal assets as easily. But I'm not a lawyer, so YMMV.
Seriously, talk to a CPA. The tax treatment (depreciation, Section 179) can be a big deal. Don't just rely on forum advice.
What about the Idaho vehicle registration? Do they require the LLC to have a physical address in the state? I'm in a similar boat but my LLC is registered in Idaho while I live in Washington.
PineyWoods, Idaho requires a physical addrss for the LLC, but you can use a registered agent service. As for the vehicle, it might need to be registered where it's primarily garaged. Might be a hassle if you're out of state.
Oh great, another LLC question. Next you'll ask if you can write off your coffee. (But yes, the LLC can own the truck. Just keep good records.)
I second the CPA advice.Also, if you're using the truck for personal errands sometimes, you might need to track mileage and reimburse the LLC. Gets messy.