Manufactured Homes

PURPOSE: Sections 144.044 and 700.010, RSMo create a partial tax exemption for new manufactured homes and an exclusion for qualifying used manufactured homes. This rule interprets the tax law as it applies to the sale of manufactured homes. This rule also identifies charges included as part of the retail sale price of the manufactured home. (1) In general, the retail sale of a new manufactured home is considered to be a sale of sixty percent (60%) tangible personal property and forty percent (40%) service. The sixty percent (60%) portion of the sale price is subject to tax. The sale of a used manufactured home upon which Missouri tax has already been paid is not subject to tax. The sale of a used manufactured home on which Missouri tax has not already been paid is subject to tax on one hundred percent (100%) of the sale price. (2) Definition of Terms. (A) Dealer—any person, other than a manufacturer, who sells or offers for sale four (4) or more manufactured homes, recreational vehicles or modular units in any twelve (12)-month period. (B) Manufactured home—a factory built structure designed as a dwelling unit with or without permanent foundation, equipped with the necessary service connections and made to be readily moveable on its own running gear. A modular unit is not a manufactured home and is subject to the same tax rules that apply to a building constructed by a contractor. (C) Setup—the services performed and the materials used to perform the service for the purchaser at the occupancy site including but not limited to, moving, blocking, leveling, anchoring, supporting and assembling multiple or expandable units. (3) Basic Application of Tax. (A) Dealers selling new manufactured homes must collect and remit tax on sixty percent (60%) of the gross receipts from these sales. The dealer must provide the buyer of a new manufactured home a signed receipt confirming that tax has been paid. (B) The owner of a new manufactured home must produce a signed receipt for the tax on the purchase price of the new manufactured home when applying for title. If the owner fails to present a signed receipt, the owner must remit the tax due on the new manufactured home prior to title being issued. (C) The sale of a used manufactured home upon which Missouri tax has already been paid is not subject to Missouri tax. The sale of a used manufactured home upon which Missouri tax has not been previously paid is subject to tax on one hundred percent (100%) of the purchase price unless the used manufactured home meets the requirements of section 700.111, RSMo. (D) The transfer of the ownership of or title to a manufactured home involving the assumption of the obligation to pay for the home is considered a sale at retail of the manufactured home subject to tax unless Missouri tax has been previously paid. (E) The new manufactured home dealer is responsible for collecting tax on sixty percent (60%) of the retail sale price. The retail sale price includes additional tangible personal property installed by the manufacturer and the installed price of the following items of tangible personal property if installed by the dealer: 1. Central air conditioning; 2. Dishwasher; 3. Range or cook top; 4. Oven; 5. Microwave oven; 6. Refrigerator; 7. Washer and dryer; 8. Skirting; 9. Anchors and other stabilizing devices; 10. Blocks; 11. Shims; 12. Steps; 13. Gutters; 14. Decks; 15. Awnings; and 16. Plumbing and electrical parts and supplies necessary for installation and hookup of plumbing and electrical apparatus. Any other tangible personal property added by a dealer should be separately stated and taxed at one hundred percent (100%) of the sale price. (F) A dealer may elect to separately state charges for delivery, setup and installation. These charges would not be subject to tax because the dealer is performing a service. The dealer should pay tax, at the time of purchase, on any materials used in performing these services. Setup and installation can include but are not limited to adding a deck to the home or pouring concrete slabs as a foundation for the home. (G) The dealer should pay tax, at the time of purchase, on items that are attached to a used manufactured home on which Missouri tax was previously paid. The dealer should purchase items attached to a used manufactured home on which Missouri sales tax has not been paid under a sale for resale exclusion. (4) Examples. (A) A customer purchases a new manufactured home from a dealer for $40,000, including delivery, setup and installation. The manufacturer includes an installed stove, refrigerator, and washer/dryer. The cost of delivery, setup and installation is $5,000. If the dealer includes delivery, setup and installation in the retail sales price, tax is due on 60% of $40,000. If the dealer separately states delivery, setup and installation charges from the retail sales price, tax is due on 60% of $35,000. If the dealer separately states these charges, the dealer should pay tax on its purchase of any materials used for the delivery, setup and installation of the manufactured home. The customer should retain his paid receipt to verify tax paid when making application for license/title/registration of the manufactured home. (B) A dealer took a manufactured home in trade from a customer. The original owner paid Missouri tax. The dealer sells the used manufactured home. No tax is due on the used manufactured home because tax was paid on the original purchase of the home. (C) A dealer sold a new manufactured home including a stove and refrigerator added by the dealer. As an incentive, the dealer included a personal computer. The computer should be separately stated from the manufactured home sale price and taxed at 100%. The installed price of the stove and refrigerator can be included in the manufactured home sale price and tax is due on 60% of that price. The dealer may issue a resale exemption certificate when purchasing these items. (D) A dealer hires a contractor to add patios and garages to the site for customers who purchase new manufactured homes. These charges can be separately stated from the manufactured home sale price without being taxed. The contractor should pay tax on any supplies used to build the patios and garages because the contractor is the final user and consumer of these supplies. AUTHORITY: section 144.270, RSMo 2000*. Original rule filed Jan. 24, 2001, effective July 30, 2001. *Original authority: 144.270, RSMo 1939, amended 1941, 1943, 1945, 1947, 1955, 1961. Benton Homes, Inc. v. Director of Revenue, (AHC 1992). Benton Homes purchased various items such as carpet, drapes, appliances and water heaters for the repair and refurbishment of used mobile homes to upgrade the home for future sale to the public. Benton Homes avoided paying sales and use tax by purchasing these items under the resale exemption; however, the items were never “resold,” because the definition of “retail sale” excludes the transfer of used mobile homes. Items such as concrete blocks and furniture that did not lose their individual character when included in a used mobile home sale, were exempt from tax as they were purchased for resale in the regular course of business.