Mobile Homes, Modular Homes and Manufactured Homes

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.