Scope Of Manufactured Home Sales Tax Exemption

Manufactured homes - sales tax exemption clarification. As it existed before the enactment of the act, the state sales and use tax exemption statute (exemption statute) exempted from state sales tax, and through operation of another statute also exempted from local sales taxes, 48% of the purchase price for the initial sale of "factory-built housing" and 100% of the purchase price for any subsequent sale of a "manufactured home" (sales tax exemption). The exemption statute referenced another statute defining "factory-built housing", but in Senate Bill 03-182, concerning the consolidation of programs implemented by the department of local affairs that pertain to the regulation of construction, the general assembly replaced the existing definition of "factory-built housing" with a new definition of "factory-built residential structure", and the statute referenced in the exemption statute actually defines the latter term. This definition of "factory-built residential structure" includes only "structures designed to be installed on a permanent foundation" and therefore arguably limited the sales tax exemption, which had previously clearly applied to structures designed for occupancy in either temporary or permanent locations, to only those structures designed to be installed on permanent foundations.

The act clarifies the scope of the sales tax exemption by amending the exemption statute to exempt "manufactured homes" instead of "factory-built housing", which clarifies that the sales tax exemption applies to homes designed to be installed on either temporary or permanent foundations.

(Note: This summary applies to this bill as enacted.)