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CHAPTER 14 – MANUFACTURED HOUSING

 

 

INTRODUCTION

 

Prior to March 1, 1982, mobile homes were taxed under the Motor Vehicle Sales and Use Tax (Chapter 152).  Effective March 1, 1982, manufactured homes, previously called mobile homes, became subject to the Manufactured Housing Sales and Use Tax Act.  This is a brief chapter which will hopefully help the auditor distinguish between items taxed under the Manufactured Housing Sales and Use Tax Act and items taxed under the Motor Vehicle Sales and Use Tax.

 

DEFINITIONS

 

HUD-Code Manufactured Home:

A structure constructed on or after June 15, 1976, according to the rules of the United States Department of Housing and Urban Development, transportable in one or more sections, which in the traveling mode is eight body feet or more in width or 40 body feet or more in length, or when erected on the site is 320 or more square feet, is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning, and electrical systems.

 

Manufactured Home:

A HUD-code manufactured home, a mobile home, or modular home.  A manufactured home does not include a recreational vehicle, park model, or house trailer.  It does not include a structure which is not designed as a residence.

 

New Manufactured Home

A manufactured home that has not been subject to a retail sale.

 

Used Manufactured

A manufactured home that has been subject to a retail sale.

 

Mobile Home:

A structure constructed before June 15, 1978, transportable in one or more sections, which in the traveling mode is eight body feet or more in width or 40 body feet or more in length, or when erected on site is 320 or more square feet, is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning, and electrical systems.

 

Modular Home:

A dwelling constructed in one or more modules at a location other than the homesite, or constructed utilizing one or more modular components, and designed to be used as a permanent residence when the modular components or modules are transported to the homesite and joined together or erected and installed on a permanent foundation.  The term includes the plumbing, heating, air conditioning, and electrical systems.

 

A Modular Home Does Not Include:

• Housing constructed of sectional or panelized systems not utilizing modular components
• A ready-build home which is constructed so that the entire living area is contained in a singe unit or section at a temporary location for the purpose of selling it and moving it to another location
• Any dwelling constructed in modules incorporating concrete as the predominant structural component

 

Retail Sale:

A sale to a consumer as opposed to a sale to a retailer for resale or for further processing and resale.

 

TAXATION OF MANUFACTURED HOUSING

 

The manufactured housing sales tax is due on all new manufactured homes sold by manufacturers on or after March 1, 1982.  A manufactured home is presumed to be sold at the time the home is sold or consigned by the manufacturer to a retailer or other person in Texas or is shipped to any point in Texas for the use and benefit of any person. 

 

New manufactured homes purchased outside Texas for use, occupancy, resale or exchange in Texas are subject to a use tax.  The person to whom or for whom the manufactured home is sold, shipped, or consigned in Texas is liable for the use tax.  Credit would be allowed for any sales or use tax previously paid on the manufactured home in any state.  Also, a use tax would not be due if the manufacturer has previously paid the Texas Manufactured Housing Sales and Use Tax on the manufactured home.

 

The tax does not apply to any manufactured home purchased used at retail in Texas. 

 

The tax rate (both sales and use) is 5.0% of 65% of the sales price of the manufactured home.  This amounts to 3.25% of the total retail sales price.  The sales price does not include any shipping, freight, or delivery charges for the manufactured home from the manufacturer to the retailer or other person if those charges are separately stated on the invoice or bill of sale.  The manufacturer must be permitted with the Comptroller and must report and pay the tax to the Comptroller on or before the last day of the month following the month in which the manufactured home was sold. 

 

RECORDS REQUIRED

 

Every manufacturer selling, shipping, or consigning manufactured homes to or for any person in Texas shall keep on file for audit purposes for the limitation period records showing:

• The identification number of each module or section of each manufactured home sole, shipped, or consigned
• The name of the retailer or other person to whom or for whom the manufactured home was sold, shipped, or consigned and the address to which the home was delivered in Texas
• The sales price of each manufactured home sold, shipped, or consigned

EXEMPTIONS

 

There are exemptions for manufactured homes sold, shipped, or consigned to or for the use or occupancy by:

• The United States or its unincorporated agencies or instrumentalities

• Any incorporated agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States

• The State of Texas or its unincorporated agencies or instrumentalities

• Any county, city or town, special district, or other political subdivision of the State of Texas

• Any organization created for religious, educational, charitable, or eleemosynary purposes, provided that no part of the net earnings of any such organization is for the benefit of any individual and provided that the use of the manufactured home is related to the purpose of the organization

 

An exemption certificate is available to support tax-free sales.  The exemption certificate must include:

• Names and addresses of the manufacturer, retailer, and purchaser

• A description of the manufactured home

• The address where the manufactured home will be installed

• Reason for exemption

• Signatures of both the retailer and purchaser

 

A retailer must keep a copy of the exemption certificate attached to the invoice or bill of sale transferring title of the manufactured home to the purchaser.  The manufacturer must retain the original exemption certificated attached to the invoice or bill of sale.  An exhibit of a Manufactured Housing Sales and Use Tax Act exemption certificate is included later in this chapter. 

 

The tax is not imposed on a manufactured home that is sold to a Texas retailer for resale at retail to a resident of another state if the home is transported to and installed for occupancy on a homesite located in another state.  However, tax would be due if the home is titled or registered in Texas or if the home is used for any purpose other that display prior to being transported outside Texas.

 

When a manufacturer located in Texas ships a manufactured home to a point outside Texas, the tax is not imposed if:

• The manufacturer ships the manufactured home with his own vehicles

• The manufacturer delivers the manufactured home to a carrier who delivers the home under a bill of lading to a consignee located outside Texas

 

If a retailer who has previously paid the sales tax to the manufacturer on a manufactured home that is later transported outside Texas prior to any use in Texas may claim a credit or a refund from the manufacturer. 

 

NOTE:

There is no exemption for a bad debt.  For example, a manufacturer sells and delivers a manufactured home to a retailer in Texas and reports and pays the tax to the Comptroller.  The manufacturer finances the sale to the dealer through a related corporation with recourse.  The dealer later defaults on the note.  The manufacturer pays back the related corporation, and the manufacturer repurchases the manufactured home, including the amount of sales tax paid.  The manufacturer is not entitled to a credit of the sales tax previously reported and paid.  Any recourse would have to be against the dealer.

 

 

EXHIBIT – TEXAS MANUFACTURED HOUSING SALES TAX RETURN

 

 

 

EXHIBIT

TEXAS MANUFACTURED HOUSING SALES AND USE EXEMPTION CERTIFICATE

 

 

EXHIBIT – MANUFACTURED HOME –

SUBJECT TO TEXAS MANUFACTURED HOUSING SALES AND USE TAX

 

 

 

 

 

EXHIBIT – TRAVEL TRAILER

SUBJECT TO MOTOR VEHICLE SALES AND USE TAX

 

EXHIBIT – MOBILE OFFICE

SUBJECT TO LIMITED SALES AND USE TAX