Tax Type
Retail Sales and Use Tax
Description
Mobile home set-up components; Change in Department policy
Topic
Taxability of Persons and Transactions
Date Issued
07-19-1991
July 19, 1991
Re: Request for Ruling: Sales and Use Tax
Dear*********************
This will reply to your letter of March 11, 1991 in which you request a ruling on behalf of your client, ****************(the "Taxpayer"), as to the proper sales and use tax application to "set-up" components that become an integral part of mobile homes upon installation.
FACTS
Va. Code § 58.1-608(1)(b) provides an exemption from the Virginia retail sales and use tax for "motor vehicles, trailers, and semitrailers, mobile homes and travel trailers." Instead these items are subject to the Virginia motor vehicle sales and use tax administered by the Virginia Department of Motor Vehicles (DMV). Based on prior DMV interpretations regarding which items are to be properly included in the definition of "sales price" under Va. Code § 58.1-2401, the Department of Taxation (TAX) held that the "set-up" components used in the installation of mobile homes (i.e. concrete blocks, wedges, anchors, strapping, etc.) are subject to the 4 1/2% retail sales and use tax (see P.D. 85-65 (3/27/85) enclosed). The Taxpayer is requesting that TAX reverse its position and allow "set-up" components, included in the sales price of a mobile home, to be taxed at the same rate as the mobile home itself, i.e. 3% motor vehicle sales and use tax.
RULING
It is apparent from the information provided, that the mobile home industry has significantly changed over the last several years. These changes have caused both TAX and DMV to review their current policies to determine what changes may be necessary in order to keep up with current trends. Based upon this review, DMV and TAX have determined that mobile home dealers shall collect the motor vehicle sales tax and the retail sales tax, as follows:
- All "set-up" components that become an integral part of a mobile home which are attached or purchased at the time a mobile home is sold shall be included as part of the sale price of the mobile home and taxed at the motor vehicle sales and use tax rate of 3%. Set-up components include: concrete blocks, wooden wedges, concrete footers, steps, blocking boards, anchors, anchor strapping, anchor nuts and bolts, strap buckles, roof brackets, foundation skirting, awnings, plumbing waste pipe and fittings, water pipe and fittings, bolts, screws, nails, electrical wiring, disconnect boxes, circuit breakers, connectors, conduit pipes, ground rods, electric adapters, heat tape, carpet tape, insulation, caulk sealant, and roof flashing.
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- Septic tanks and separately stated charges for labor or installation are not to be included in the purchase price.
- Septic tanks and separately stated charges for labor or installation are not to be included in the purchase price.
- All "set-up" materials purchased after the initial sale of the mobile home would fall under the Virginia Retail Sales and Use Tax Act and be taxed at the rate of 4 1/2%. Purchases of this nature are not purchased at the time the mobile home was purchased, therefore, are not included in the purchase price.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner