Special Bulletin
The purpose of this Special Bulletin is to provide “general responses” to use and sales tax questions CMHI has received over the past 90 days. For detailed guidelines you should read publication 47 and Regulations 1610.2 from The California Department of Tax and Fee Administration (CDTFA).
Publication 47 is available at www.cdtfa.ca.gov
Regulation 1610.2 is Attached Here
CAVEAT: The following is not, nor is it intended to be, legal advise. If you have specific sales or use tax issues you should contact CDTFA and/or a qualified tax attorney.
*Is sales tax due for homes shipped to another state?
No, sales tax does not apply when the contract requiring that home is to be shipped to a point outside California (Publication 47 page 8)
*What tax applies to homes sold by out of state dealers for installation in California ?
If dealer is not engaged in business (licensed) in California, then the home buyer must pay a use tax based on 75 percent of the out of state dealer’s purchase price pursuant to 1610.2 (b) (3) (B) (1).
*New manufactured home sales: use tax or sales tax?
When a retailer sells a new manufactured home for occupancy as a residence he / she is a “retailer-consumer’ and must pay “use tax” based on 75% of the retailers purchase price of the home (Publication 47, page 2)
Note: Pursuant to regulation 1610.2 (b) (3) (B) (1) the home is a “use taxable” not “sales taxable” and the retailer is not authorized to separately bill the customer for tax reimbursement.
Sales Tax: For items sold to the buyer that are not “integral parts” of the home sales tax may be collected from the buyer if “your proof of sales shows the amount you collected.” (Publication 47, page 22)
Because “use tax” is not reimbursable that amount may not be included on the sales tax line of your sales document.
Current sales and use tax rates are attached.
*FOB Sales:
It is our current understanding that use tax on an FOB sale is based on the retailers cost of the home as delivered to the home buyer i.e. 75% x retailer home cost x use tax rate.
The C-47 contractor is responsible for sales tax on materials used to install the home.
