Sales tax rate change for manufactured and mobile homes in North Carolina.

Sales tax rate change for manufactured and mobile homes in North Carolina.

Recently, the North Carolina Department of Revenue has published directives regarding upcoming sales tax rate changes for modular and manufactured homes. Both changes take effect on January 1, 2014.

Modular homes and manufactured homes are not the same, of course. Each is defined by North Carolina law:

  • A modular home is a “factory-built structure that is designed to be used as a dwelling, is manufactured in accordance with the specifications for modular homes under the North Carolina State Residential Building code, and bears a seal or label issued by the Department of Insurance ….”
  • A manufactured home is a “structure that is designed to be used as a dwelling and is manufactured in accordance with the specifications for manufactured homes issued by the United States Department of Housing and Urban Development.”

Modular homes

Through the end of 2013, modular homes sold at retail are subject to a 2.50% state sales tax rate. This special rate applies to “all accessories attached to the modular home when it is delivered to the purchaser….”

Session Law 2013-316 amends N.C. Gen. Stat. § 105-164.4(a)(8); under the amended law, which takes effect on January 1, sales of modular homes sold at retail and attached accessories are subject to the North Carolina general state sales and use tax rate of 4.75%.

However, modular homes sold at retail are not subject to local and transit sales and use tax rates (N.C. Gen. Stat. § 105-467(a)).

The directive specifies that “the sale of a modular home to a modular homebuilder is considered a retail sale.” In addition, “A person who sells a modular home at retail is allowed a credit against the tax imposed by [North Carolina law] for sales or use tax due and paid to another state on tangible personal property incorporated in the modular home.”

Manufactured homes

Through the end of 2013, manufactured homes sold at retail are subject to a 2.00% state sales tax rate. This special rate applies to “all accessories attached to the modular home when it is delivered to the purchaser….” In addition, if you purchase a manufactured home prior to December 31, the maximum tax rate is $300.00 per article.

Manufactured homes sold at retail are not subject to local and transit sales and use tax rates (N.C. Gen. Stat. § 105-467(a)).

Session Law 2013-316 amends N.C. Gen. Stat. § 105-164.4(a)(8); under the amended law, which takes effect on January 1, sales of manufactured homes sold at retail and attached accessories are subject to the North Carolina general state sales and use tax rate of 4.75%.

Additional information about the taxation of manufactured and modular homes is available on the NC Department of Revenue website.

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