Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 32 - Receipts Exempt From Use Tax › Rule 701-32.3 - Mobile Homes and Manufactured Housing

Current through Register Vol. 47, No. 3, July 24, 2024
A use tax is not to be imposed on any mobile home or
				  manufactured housing if the tax has been previously imposed pursuant to Iowa
				  Code section
				  4232. and paid. In
				  order for the exemption to be allowed, the purchaser of the mobile home or
				  manufactured housing has the responsibility to provide the county treasurer
				  with documentation verifying that the Iowa use tax was previously paid. On or
				  after July I, 2008, all taxable mobile homes or manufactured housing is subject
				  to a use tax in an amount equal to 20 percent of the mobile home's or
				  manufactured housing's purchase price (80 percent of the home's or housing's
				  purchase price is exempt from use tax). Prior to July I, 2008, all taxable
				  mobile homes or manufactured housing was subject to a use tax in an amount
				  equal to 60 percent of the mobile home's or manufactured housing's purchase
				  price (40 percent of the home's or housing's purchase price is exempt from use
				  tax). The trade-in allowance provided in Iowa Code section
				  4231(6).
"b
				  "
is considered a reduction in the purchase price if (1) the property
				  traded for the mobile home or manufactured housing is a type of property
				  normally sold in the regular course of business of the retailer selling the
				  home or housing, and (2) the retailer intends ultimately to sell the traded
				  property at retail or to use the traded property in the manufacture of a like
				  item.
Example 1: In January of 2008, a manufactured housing dealer
				  receives from the factory a new manufactured home that has a sales price of
				  $20,000. The dealer sells it and takes the purchaser's old manufactured home
				  worth $5,000 in trade. The dealer keeps the traded-in manufactured home as an
				  office. The Iowa use tax is computed as follows:
Sales
				  price.................................................... $20,000
Less
				  trade-in....................................................
$
				  5,000
Buyer's
				  price.................................................. $15,000
Amount subject to
				  tax............................................ $12,000
($20,000 X 60%) Use tax at
				  5%.................................................... $ 600
The trade-in allowance does not apply since the traded-in
				  manufactured home will not be ultimately sold at retail or used to manufacture
				  a like item.
Example 2: Same date and facts as given in Example I with the
				  exception that the dealer lists the trade-in for sale.
Sales
				  price.................................................... $20,000
Less
				  trade-in....................................................
$
				  5,000
Buyer's
				  price.................................................. $15,000
Amount subject to
				  tax.............................................$ 9,000
($15,000 X 60%) Use tax at
				  5%.................................................... $ 450
The trade-in allowance applies since the traded-in
				  manufactured home will be ultimately sold at retail.
Example 3: In September of 2008, a manufactured housing
				  dealer receives from the factory a new manufactured home that has a sales price
				  of $40,000. The dealer sells it and takes the purchaser's old manufactured home
				  worth $10,000 in trade. The dealer intends to resell the used manufactured
				  home. The Iowa use tax is computed as follows:
Sales
				  price.................................................... $40,000
Less
				  trade-in...................................................
$10,000
Buyer's
				  price.................................................. $30,000
Amount subject to
				  tax.............................................$ 6,000
($30,000 X 20%) Use tax at
				  5%.................................................... $ 300
The trade-in allowance does apply since the traded-in
				  manufactured home will be ultimately sold at retail or used to manufacture a
				  like item. Because the transaction occurs after July 1, 2008, only 20 percent
				  of the purchase price is subject to the 5 percent use tax.
This rule is intended to implement Iowa Code section
				  4236. as amended by
				  2008 Iowa Acts, House File 2700, section 64.