State laws govern the sale of mobile and manufactured homes. The laws in different states can vary, although most states mandate that you must pay sales tax when you buy a new manufactured home from a dealer. A manufactured housing use tax is collected from the person to whom a new manufactured home is sold, or shipped if the mobile home is purchased outside of the state and then brought into the state for use.
A consumer is required to pay sales tax when purchasing a new manufactured home from a dealer or mobile home dealership. Generally, the dealer is responsible for charging and collecting sales tax when he sells the mobile home. In order to do so, a new mobile home dealer must be licensed in the state where he sells manufactured homes. When you buy a new mobile home, the dealer also must give you a copy of the sales contract and copies of any manufacturer warranties. The sales contract should list a description of the home, the total cash price you are paying and other conditions of the sale.
When Dealers Pay Sales Tax
In some states, dealers who sell new manufactured or mobile homes do not collect sales tax from a buyer. Instead, the dealer owes sales tax based on what the dealer pays for the home. A dealer is not responsible for paying sales tax until he sells a new mobile home. When the buyer receives financing for the home or the dealer receives payment, the dealer must then pay sales tax on the home according to the tax rate in effect in the buyer's county of residence. Although the mobile home dealer cannot charge the buyer sales tax, the dealer can recover the sales tax he must pay by raising the price of the mobile home.
Buying a Used Mobile Home
If you are buying a used mobile home from an owner, the lender financing the home with a mortgage or personal property loan normally sees that the sales taxes are paid. However, if you are paying cash for the mobile home instead of financing the purchase, you are responsible for paying sales tax when ownership of the mobile home is transferred to your name. As a rule, sales tax is assessed and collected when you register the home with the motor vehicle agency in that state.
Other Tax Implications
Whether you purchase a new manufactured or a used mobile home, you must pay property taxes on the home if the home is registered in an individual's name and attached to a concrete or other permanent foundation. Manufactured homes registered to a dealer or dealership, or homes not attached to a foundation that are registered to individuals, are taxed as personal property. Mobile homes usually are exempt from sales and use taxes if the home is permanently affixed on real property and is subject to local property taxes. Sales taxes paid on a mobile home are tax-deductible on your federal income tax return.