1. Sales and Use Taxes on Manufactured Homes
Wisconsin Housing Alliance
Basic Training Boot Camp
May 12, 2015

2. Definitions "Manufactured home"
Federal definition applies for state tax purposes:
Structure designed to be used as a dwelling
With or without a permanent foundation
Meets HUD Code standards (42 USC )

3. Definitions "New manufactured home" "Used manufactured home"
Never been occupied, used, or sold
"Used manufactured home"
Previously occupied, used, or sold

4. Definitions "Used mobile home"
Vehicle manufactured or assembled before June 15, 1976
Designed to be towed as a single unit or in sections on a highway by a motor vehicle
Equipped and used, or intended to be used, primarily for human habitation
With walls of rigid uncollapsible construction
Overall length of more than 45 feet

5. Real Property vs. Personal Property
Real property improvement
Home is permanently affixed to land owned by the owner of the manufactured home
Permanently affixed: Sits on a foundation (off the wheels and on some other support) and connected to utilities
Personal property
Not permanently affixed to real estate, or
Affixed to land owned by someone other than the owner of the home (e.g., home installed in manufactured home park)

6. Tax Treatment – New Manufactured Home is Real Property
Real property improvement in Wisconsin:
Seller/installer pays tax on 65% of purchase price of home
No deduction for trade-in
No tax owed on sale of home by seller/installer to customer
Seller/installer should include tax paid in its selling price of home

7. Tax Treatment – New Manufactured Home is Real Property
Example:
Dealer buys manufactured home for $70,000 and sells home to Customer for $80,000 (labor and materials)
Dealer permanently affixes home
Land is owned by Customer
Land is in Wisconsin
Dealer owes sales or use tax on its purchase of home
Tax computed on 65% of Dealer's purchase price
Tax computation: $70,000 x 65% = $45,000 x 5% = $2,275

8. Tax Treatment – New Manufactured Home is Real Property
Real property improvement outside Wisconsin:
No Wisconsin sales or use tax owed by seller/installer on purchase or sale of home - Exemption applies
Seller/installer should contact other state to determine its tax responsibilities

9. Tax Treatment – New Manufactured Home is Real Property
Real property improvement outside Wisconsin:
Exemption from Wisconsin sales and use tax applies for purchases on September 1, 2011 and after.
Before September 1, 2011, purchases of manufactured homes in Wisconsin that were used for real property improvements outside Wisconsin were taxable.

10. Tax Treatment – New Manufactured Home is Personal Property
Seller/installer of home may buy home without tax, for resale
If home sold in Wisconsin - seller/installer owes sales tax on 65% of selling price of home
No deduction for trade-in
If home sold outside Wisconsin (customer receives possession of the home at location outside Wisconsin), seller/installer does not owe Wisconsin sales or use tax on the sale of the home

11. Tax Treatment – New Manufactured Home is Personal Property
Example:
Dealer buys manufactured home for $70,000 and sells home to Customer for $80,000 (labor and materials)
Dealer gives vendor exemption certificate claiming resale
Dealer permanently affixes home
Land is not owned by Customer
Land is in Wisconsin
Dealer owes sales tax on its sale of home
Tax computed on 65% of Dealer's sales price
Tax computation: $80,000 x 65% = $52,000 x 5% = $2,600

12. What’s Included in 65% Computation?
For an item to be taxed at 65%, both conditions must be met:
Item must be part of the manufactured home structure
Examples: Plumbing, heating, electrical systems, appliances, or equipment carrying a manufacturer's warranty
Item must be sold in the same transaction as the home

13. What’s Included in 65% Computation?
Example 1:
Dealer buys manufactured home for $72,000 and sells home to Customer for $84,000 (labor and materials)
Home is sold as real property
For additional $2,800, Manufacturer includes central air conditioning unit with manufacturer's warranty
Air conditioning unit has manufacturer's warranty
Dealer's entire purchase price ($74,800) is taxed at 65%

14. What’s Included in 65% Computation?
Example 2:
Dealer buys manufactured home for $72,000 and sells home to Customer for $84,000 (labor and materials)
Home is sold as real property
Dealer buys central air conditioning unit for $2,800 from person other than the vendor of the home
Home taxed at 65% of Dealer's purchase price
Air conditioning unit taxed at 100% of Dealer's purchase price
Air conditioning unit does not qualify for 35% exemption because it was not purchased as part of the home

15. What’s Included in 65% Computation?
Example 3:
Dealer buys manufactured home for $76,000 and sells home to Customer for $86,000 (labor and materials)
Central air conditioning unit included with home
Air conditioning unit carries manufacturer's warranty
Home is sold as personal property in Wisconsin
Dealer's entire sales price ($86,000) is taxed at 65%

16. What’s Included in 65% Computation?
Example 4:
Dealer buys manufactured home for $76,000 and sells home to Customer for $86,000 (labor and materials)
Dealer buys central air conditioning unit for $2,500 from person other than the vendor of the home (without installation)
Dealer installs air conditioning unit in home
Air conditioning unit carries manufacturer's warranty
Home is sold as personal property in Wisconsin
Dealer's entire sales price ($86,000) is taxed at 65%

17. What’s Included in 65% Computation?
Examples of other items taxed at 65%, if they are part of the manufactured home and sold in same transaction as the home:
Skirting
Refrigerators
Furnaces
Washers
Dryers

18. Foundations
Installed foundations are real property, regardless of where they are constructed
Dealer or other contractor who installs foundation owes sales or use tax on purchases of concrete and other materials used for foundation
Dealer's charge to customer for foundation is not taxable

19. Foundations
If dealer makes single combined charge for (1) manufactured home sold as personal property and (2) foundation, dealer should make reasonable allocation of selling price
Amount of selling price allocated to home taxed at 65%
Amount of selling price allocated to foundation is not taxable

20. Carport or Garages Sold With Home; Home Sold as Personal Property
Carport/garage set in concrete or attached to a concrete foundation and attached to home
Dealer may buy carport/garage without tax, for resale
Dealer owes sales tax on total sales price of carport/garage

21. Carport or Garages Sold With Home; Home Sold as Personal Property
Carport/garage set in concrete or attached to a concrete foundation, but not attached to home
Dealer must pay sales or use tax on purchase of materials for carport/garage (if Dealer buys installed carport or garage from subcontractor, Dealer's purchase is nontaxable)
Dealer's sale of carport/garage is not taxable

22. Carport or Garages Sold With Home; Home Sold as Real Property
Carport/garage set in concrete or attached to a concrete foundation, and attached to home
Dealer must pay sales or use tax on purchase of materials for carport/garage (if Dealer buys installed carport or garage from subcontractor, Dealer's purchase is nontaxable)
Dealer's sale of carport/garage is not taxable

23. Carport or Garages Sold With Home; Home Sold as Real Property
Carport/garage set in concrete or attached to a concrete foundation, but not attached to home
Dealer must pay sales or use tax on purchase of materials for carport/garage (if Dealer buys installed carport or garage from subcontractor, Dealer's purchase is nontaxable)
Dealer's sale of carport/garage is not taxable

24. Decks or Steps Sold With Home; Home Sold as Personal Property or Real Property
Deck/steps attached to a concrete foundation, but not attached to home
Dealer must pay sales or use tax on purchase of materials for deck/steps (if Dealer buys installed deck or steps from subcontractor, Dealer's purchase is nontaxable)
Dealer's sale of deck/steps is not taxable

25. Ramp Sold With Home; Home Sold as Personal Property or Real Property
Dealer buys materials and builds ramp
Ramp attached to a concrete foundation, but not attached to home
Dealer must pay sales or use tax on purchase of materials for ramp
Dealer's sale of ramp is not taxable

26. Ramp Sold With Home; Home Sold as Personal Property or Real Property
Dealer buys pre-built ramp
Ramp attached to a concrete foundation, but not attached to home
Dealer does not owe tax on purchase of ramp (exempt as "mobility-enhancing equipment")
Dealer's sale of ramp is not taxable

27. Dealer Mistakenly Charges Sales Tax on Real Property Improvement
Customer is eligible for refund of tax paid to dealer in error
Dealer owes sales or use tax on its purchase price of the home
Dealer may deduct amount of sales or use tax it owes on its purchase price of the home from the refund it gives to customer

28. Freight
Manufacturer's freight charge is taxable if property sold by manufacturer is taxable
Example 1:
Manufacturer invoices Dealer for new manufactured home
Dealer will sell home as real property in Wisconsin
Invoice: $70,000 manufactured home + $2,000 freight = $72,000 total charge.
Dealer owes sales or use tax of $2,340 ($72,000 x 65% = $46,800 x 5% = $2,340)

29. Freight
Example 2:
Manufacturer invoices Dealer for new manufactured home
Dealer gives manufacturer exemption certificate claiming resale
Invoice: $70,000 manufactured home + $2,000 freight = $72,000 total charge
Dealer will sell home for $82,000 as personal property in Wisconsin
Dealer owes sales tax of $2,665 ($82,000 x 65% = $53,300 x 5% = $2,665)

30. County and Stadium Taxes – Dealer Sells Home as Personal Property
Sales takes place where customer receives possession of home
If sales takes place in county that has adopted the tax (taxable county), sale is subject to county tax
If sale takes place in baseball or football stadium district, baseball or football stadium district tax applies

31. County and Stadium Taxes – Dealer Sells Home as Real Property in Wisconsin
If dealer receives and stores home in taxable county, dealer owes county sales or use tax on purchase price of home
If dealer receives and stores home in baseball or football stadium district, dealer owes baseball or football stadium sales or use tax on purchase price of home
If total county and stadium tax rate for location where home is permanently affixed to land is higher than the total county and stadium tax rate where home was received or stored, dealer owes difference for county where home is affixed

32. County and Stadium Taxes – Dealer Sells Home as Real Property in Wisconsin
Example 1:
Dealer buys manufactured home and receives and stores home in Fond du Lac County
Dealer permanently affixes the home to Customer's land in Winnebago County (nontaxable county)
Dealer owes 5.5% tax on its purchase price of the home, since it first received or stored the home in Fond du Lac County

33. County and Stadium Taxes – Dealer Sells Home as Real Property in Wisconsin
Example 2:
Dealer buys manufactured home for $70,000
Dealer gives manufacturer exemption certificate claiming resale
Dealer receives and stores home in Dodge County
Dealer permanently affixes the home on Customer's land in Milwaukee County (total state, county, and stadium tax rate in Milwaukee County is 5.6%)
Dealer owes state, county, and stadium use tax, as follows:
Wisconsin state use tax: $2,275 ($70,000 x 65% = $45,500 x 5%)
Dodge County use tax: $ ($70,000 x 65% = $45,500 x 65% x 0.5%)
Additional use tax for Milwaukee County and baseball stadium district: $ ($70,000 x 65% = $45,500 x 0.1%)

34. County and Stadium Taxes – Dealer Sells Home as Real Property in Wisconsin
Example 2 (cont'd):
Dividing the additional $45.50 between Milwaukee County and the baseball stadium district:
Milwaukee County portion $37.92 ($45.50 x 5/6)
Baseball stadium portion $7.58 ($45.50 x 1/6)
Reporting on sales and use tax return:
Milwaukee County use tax – report $7,584 of taxable purchases for Milwaukee County ($7,584 x 0.5% = $37.92)
Baseball stadium use tax – report $7,580 of taxable purchases for baseball stadium district ($7,580 x 0.1% = $7.58)

35. County and Stadium Taxes – Dealer Sells Home as Real Property in Wisconsin
Dealer receives and stores home in nontaxable county (county where neither county or stadium taxes apply), and
Dealer permanently affixes the home to customer's land in a nontaxable county
Dealer does not owe county or stadium tax on its purchase price of the home

36. County and Stadium Taxes – Dealer Sells Home as Real Property in Wisconsin
Dealer receives and stores home in nontaxable county (county where neither county or stadium taxes apply), and
Dealer permanently affixes the home to customer's land in a taxable county and/or in a stadium district
Dealer owes county and/or stadium tax on its purchase price of the home

37. County and Stadium Taxes – Dealer Sells Home as Real Property in Wisconsin
Example:
Dealer buys manufactured home and receives and stores it in Sheboygan County (nontaxable county)
Dealer gives its vendor an exemption certificate claiming resale
Dealer permanently affixes the home on customer's lane in Milwaukee County
Dealer owes 5.6% use tax on 65% of its purchase price of the home (0.5% Milwaukee County use tax and 0.1% baseball stadium use tax)

38. County and Stadium Taxes – Dealer Sells Home as Real Property in Wisconsin
Dealer receives home at jobsite in taxable county or in a stadium district
Dealer owes county and/or stadium district tax on its purchase price of the home
Tax owed for county and/or stadium district where jobsite is located

39. County and Stadium Taxes – Dealer Sells Home as Real Property in Wisconsin
Dealer receives home at jobsite in nontaxable county that is not in a stadium district
Dealer does not owe county or stadium district tax on its purchase price of the home

40. County and Stadium Taxes – Dealer Sells Home as Real Property Outside Wisconsin
Dealer receives and stores home anywhere (regardless of whether in Wisconsin or outside Wisconsin)
Dealer does not owe county or stadium district tax on its purchase price of the home

41. Used Manufactured Homes
Home sold as real property
No tax on seller/installer's purchase of home
No tax on sale of home to customer
Home sold as personal property

42. Used Mobile Homes Home sold as real property
No tax on seller/installer's purchase of home
No tax on sale of home to customer
Home sold as personal property

43. Lease or Rental- New & Used Manufactured & Mobile Homes
Real property
Lease or rental for continuous period of less than one month
Taxable (exception for leases and rentals by hospitals and certain other organizations)
Leases and rentals of manufactured and mobile homes are taxed at 100% of rental amount
Lease or rental for continuous period of one month or more
Not taxable

44. Lease or Rental- New & Used Manufactured & Mobile Homes
Personal property
Lease or rental for continuous period of less than one month
Taxable (exception for leases and rentals by hospitals and certain other organizations)
Leases and rentals of manufactured and mobile homes are taxed at 100% of rental amount
Lease or rental for continuous period of one month or more
Not taxable

45. Home permanently affixed to owner's land:
Installation or Complete Replacement of Item Permanently Affixed to Manufactured or Mobile Home
Home permanently affixed to owner's land:
Treated as real property improvement
No tax on charge for labor and materials
Contractor pays tax on purchase of materials

46. Home not permanently affixed to owner's land:
Installation or Complete Replacement of Item Permanently Affixed to Manufactured or Mobile Home
Home not permanently affixed to owner's land:
Exempt on charge for labor
Tax on charge for materials
No tax on contractor's purchase of materials (purchase for resale)

47. Repair of Items Permanently Affixed to Manufactured or Mobile Home ("Deemed Items" in sec (2)(ag), Wis. Stats.)
Exempt on charge for labor
Tax on charge for materials
No tax on contractor's purchase of materials (purchase for resale)

48. Home permanently affixed to owner's land:
Repair of Items Permanently Affixed to Manufactured or Mobile Home (Items Not "Deemed Items" in sec (2)(ag), Wis. Stats.)
Home permanently affixed to owner's land:
No tax on charge for labor and materials
Tax on contractor's purchase of materials

49. Home not permanently affixed to owner's land:
Repair of Items Permanently Affixed to Manufactured or Mobile Home (Items Not "Deemed Items" in sec (2)(ag), Wis. Stats.)
Home not permanently affixed to owner's land:
Exempt on charge for labor
Tax on charge for materials
No tax on contractor's purchase of materials (purchase for resale)

50. Questions? Mike Hinnendael Wisconsin Department of Revenue
(608)
Becky Haines
(608)