USE TAX IS SALES TAX
Recently, we have received many phone calls at
the CMHI office regarding manufactured homes sold out of California
where sales tax is not being charged. These homes are then
shipped to California and subsequently installed. The following
is a brief explanation of use tax and how it applies.
Many consumers are unaware of the California
Use Tax. This
tax has been around since 1935, yet many find it difficult to understand
The law states that everyone who buys goods elsewhere that will
be used, consumed or enjoyed inside the state is liable to pay a
use tax, even when the out-of-state retailer doesn't charge or collect
The tax is designed to protect California merchants
that might be at a competitive disadvantage when compared to the
out-of-state retailer making sales to California customers without
charging them sales tax. Although the tax rates of sales
tax and use tax are the same, the difference is that California
retailers must collect sales tax for the state and use tax is the
responsibility of the consumer to report and pay.
The Consumer Use Tax section of the Board of
Equalization receives reports from the DMV, FAA and HCD as well
as the United States Coast Guard on identity transfers and registrations
of vehicles, aircraft, manufactured homes and vessels. The Board requires the payment
of use tax prior to completing transfer of title or new registration. Failure
to pay by the consumer can result in severe penalties.
For more information about the California Use
Tax visit the Board of Equalization website at www.boe.ca.gov.
Back to "What
is a Manufactured Home?"