Current through Register Vol. XLI, No. 38, September 20, 2024
122.1. General rule. Consumers sales and use
taxes apply to the sale or use in this State of mobile homes. The term "mobile
homes" is defined for purposes of these regulations to mean "manufactured
homes," as defined in Section 122.2 of these regulations. If the manufactured
home will be used by the owner thereof as the owner's principal year-round
residence and dwelling, a special consumers sales and use tax rate of three
(3%) applies to the sale or use rather than the general consumers sales and
service tax rate. All other purchases and uses of manufactured homes are
subject to the general consumers sales and service tax rate.
122.1.1. Before the special three percent
consumers sales and use tax rate can apply to the sale of a manufactured home,
the purchaser must give to the vendor of the manufactured home a properly
executed exemption certificate. If the vendor of the manufactured home is not
required to collect this State's consumers sales or use taxes, the purchaser
must remit the amount of consumers sales or use taxes due directly to the Tax
Commissioner.
122.1.2. A
manufactured home owned and used by a nonresident outside this state for more
than six months prior to moving it into this State and establishing residency
here is exempt from use tax.
122.1.3. If the manufactured home was
purchased outside this State, then the amount of sales or use taxes lawfully
paid to another state on the purchase price of the mobile home may be applied
to reduce to zero any West Virginia use tax liability based on the purchase
price.
122.2.
"Manufactured Home" Defined. The term "manufactured home" means a structure,
transportable in one or more sections, which in the traveling mode is eight
body feet or more in width or forty body feet or more in length or, when
erected on site, is three hundred twenty or more square feet, and which 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
contained therein; except that such term shall include any structure which
meets all the requirements of this definition except the size requirements and
with respect to which the manufacturer voluntarily files a certificate which
complies with the applicable federal standards as set forth in the National
Manufactured Housing Construction and Safety Standards Act of 1974 (
42 U.S.C.
5401, et. seq.) and the federal manufactured
home construction and safety standards and regulations promulgated by the
Secretary of the United State Department of Housing and Urban Development to
implement such act. The term "manufactured housing" includes:
122.2.1. Units containing parts that may be
folded, collapsed or telescoped when being towed and that may be expanded to
provide additional cubic capacity.
122.2.2. Units composed of two (2) or more
separately towable components designed to be jointed into one (1) integral unit
capable of being separated again into the components for repeated towing.
122.2.2.1. For purposes of these regulations,
such units shall include, but not be limited to, "modular homes" comprised of
two or more sections, with or without a chassis, built to a state or model code
other than the National Manufactured Housing Construction and Safety Standards
Act, which are primarily constructed at a location other than the permanent
site at which they are to be finally assembled, which are shipped to the
permanent site with most permanent components in place, and which require less
than five percent (5%) of final assembly (measured by the cost of construction
materials and labor) at the permanent site of installation.
122.2.3. Units designed to be used
for residential, commercial, educational or industrial purposes, excluding,
however recreational vehicles. As used herein, "recreational vehicle" means a
vehicular portable structure built on a chassis designed to be used as a
temporary dwelling for travel, recreational and vacation uses, permanently
identified "travel trailer" by the manufacturer of the trailer and when factory
equipped for the road, having a body width not exceeding eight feet and a body
length not exceeding thirty-two feet.
122.2.3.1. Beginning July 1, 1989,
recreational vehicles are subject to the vehicle title privilege tax imposed by
W. Va. Code '17A-3-4.
When that tax is paid, the recreational vehicle is exempt from consumers sale
and use taxes.
122.3. Sale and Installation of Manufactured
Home by Seller.
122.3.1. When a retail dealer
of manufactured homes sells a manufactured home from his inventory and agrees
to hook-up and connect the same, or to arrange for the hook-up and connection
to be done by another, consumers sales and use taxes are due on the gross
proceeds which the retail dealer derives from the entire transaction. By
statute, the hook-up and connection of a manufactured home is deemed to be
incidental to the sale thereof when the retail dealer does the hook-up and
connection or arranges for another person to do the hook-up and
connection.
122.3.2. Activities
which are included in the phrase "hook-up or connection" include, but are not
necessarily limited to, the hooking-up of utility lines, the blocking up of the
home, the underskirting of the home, attaching the home to the foundation, the
finishing of interior trim, the joining together of modules or sections, or
mere delivery of the home to the site.
122.3.3. If the vendor of the home, or
another whose work is arranged for by the vendor, prepares the site for the
home by constructing a foundation for the home or by installing utility lines
to the site or doing other contracting activity, the hook-up and connection of
the home are no longer incidental to the sale of the manufactured home. Under
these circumstances, the vendor should charge consumers sales and use taxes on
only the sales price of the mobile home. Consumers sales and use taxes should
not be charged on the contracting service. For example, the sales price of a
manufactured home is $20,000.00. The vendor prepares the site at a cost of
$5,000.00. The sales price of the home is subject to consumers sales and use
tax. Site preparation, which is classified as contracting, is not taxable; but
the materials purchased for use or consumption in the contracting activity
would be taxable to the contractor at the time of purchase.
122.3.3.1. The special rule provided in
Section 122.3.2 is contrary to the general rule that when materials are
provided as part of a contract for contracting services the contractor is
deemed to be the consumer or user of all the material used or consumed in the
contract and must pay consumers sales and use taxes on the purchase price of
such items. If the general rule were to be applied, the contractor would pay
tax on the purchase price of the manufactured home at the rate of six percent
(6%) even though, the contract might be with a person who will utilize the
manufactured home as such person's principal year-round residence and dwelling.
In order to preserve the benefit of the lower consumers sales and use tax for
such persons, this special rule is provided. This special rule shall have no
effect on the general rule; and if the general rule is successfully challenged
because of this special rule, the special rule must be set aside.
122.3.4. Charges for activities
which are incidental to the sale of a manufactured home are taxable at the rate
of six percent (6%), regardless of the anticipated use of the home. To
illustrate, a manufactured home cost $20,000. The vendor agrees to deliver,
hook-up and connect the home at the customer's site for $2,000. Because the
purchaser will use the manufactured home as his principal year-round residence
and gives the vendor a certificate to that effect, the $20,000 charge for the
manufactured home is taxed at three percent (3%). The $2,000 charge is taxed at
six percent (6%).
122.3.5. A vendor
of manufactured homes who sells accessories for manufactured homes or other
tangible personal property must collect consumers sales and use taxes at the
six percent (6%) rate.
122.3.6. See
Section 107 of these regulations for information relative to
contracting.
122.4.
Activities by an Independent Third Party.
122.4.1. The hook-up and connection or
installation of manufactured homes by a contractor who is not the vendor of the
home, and who is not a person whose services are arranged for by the vendor of
the home, will generally be classified as the performance of a contracting
service.
122.4.2. Tangible personal
property and taxable services used or consumed in the preparation of the site
or in the hook-up and connection or installation of the home are taxable at the
time of sale to the contractor.
