Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 282 - Reeipts Subject to Use Tax Depending on Method of Transaction › Rule 701-282.7 - Sales of Mobile Homes, Manufactured Housing, and Related Property and Services

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Sales of
				mobile homes, manufactured housing, and related property and services for one
				package price.
This rule is applicable only to mobile homes and
				manufactured housing sold as tangible personal property rather than in the form
				of real property. If, at the time of the sale, a mobile home or manufactured
				housing is real property, this rule is not applicable to it. If a mobile home
				dealer buys a mobile home, incorporates that mobile home into real estate in
				the manner required by and described in Iowa Code section
				435.26, and then sells the
				mobile home to a consumer, the sale of that mobile home, the sale of any
				services used to transform the mobile home from tangible personal property to
				real property, and the sale of any tangible personal property with the mobile
				home (such as furniture) are governed by rule 701-Chapter 219, which deals with
				building contracts and building contractors. Sales of manufactured housing in
				the form of real estate are governed by rule
				701-282.8 (423).
When a customer purchases a mobile home or manufactured
				  housing from a dealer, the customer often wants the dealer to prepare the
				  mobile home or manufactured housing so that it is ready for the customer to
				  move into it. To render a mobile home or manufactured housing "ready to move
				  into," a dealer may sell, with the home or housing, certain tangible personal
				  property and will also perform or arrange for other parties to perform various
				  services.
With respect to any one particular mobile home or
				  manufactured house that a dealer may sell, a dealer may provide any combination
				  of the following services or provide the following services and sell the
				  below-listed property to any person purchasing the home or house:
a. Connect the electricity.
b. Connect the water.
c. Connect sewer system lines.
d. Sell and install skirting. Skirting is
				used to fill the space between the bottom of the mobile home or manufactured
				house and the ground. It gives the home or house an appearance more like a
				conventional home because it covers up this space.
e. Build and install steps for a
				door.
f. Build a deck.
g. Do minor repairs.
h. Install and sell a foundation upon which
				to place the mobile home or manufactured housing.
i. Sell furniture or appliances (e.g., air
				conditioners, refrigerators, and stoves) for use in the mobile home or
				manufactured housing. Install the appliance (e.g., an air conditioner) if
				necessary.
A dealer selling a mobile home or manufactured housing on a
				  "ready-to-move-into" basis usually sells that home or housing and the services
				  and additional property necessary to render it livable for one "package price."
				  The dealer and customer do not bargain separately for the sale of the various
				  articles of tangible personal property (e.g., the mobile home or manufactured
				  house and appliances) or the services (e.g., electrical installation) that are
				  part of this package price; nor is the dealer's package price broken down to
				  indicate any of the expenses that are components of the package price either in
				  the dealer's sales contract or on any sales invoice.
The package price of any one particular mobile home or
				  manufactured house will vary depending upon how many services the dealer will
				  provide or how much tangible personal property the dealer will sell in addition
				  to the home or house. In many cases, a dealer will contract with a third party
				  to perform the services promised in the dealer's contract to a customer. For
				  example, the dealer will contract with a third party to hook up the home or
				  house purchaser's electricity, install window air conditioning, or build a deck
				  or perform minor repairs on the mobile home or manufactured house.
In the situation described above, the "purchase price" of a
				  mobile home or manufactured house is the entire package price charged for the
				  home or house, additional personal property for use in and around the home or
				  house, and services performed to render the home or house livable. The entire
				  amount of the package price, reduced by 80 percent, as explained in rule
				  701-219.7 (423), is used to
				  calculate the amount of use tax due resulting from the sale of the mobile home
				  or manufactured house. No part of the package price is subject to Iowa sales
				  tax; rather, it is subject to Iowa use tax.