Manufactured Housing Practice Test

Sales tax is required on which type of manufactured/mobile home sale?

1. Any unit installed in a mobile home park

2. A used unit located in a mobile home park

3. A unit first sold prior to July 1, 1980 and not converted

4. All of the above

The correct answer is: A unit first sold prior to July 1, 1980 and not converted

The correct answer is that sales tax is required on a unit first sold prior to July 1, 1980, and not converted. This is because manufactured homes that were sold before this date often fall under different tax regulations compared to those sold after. In many jurisdictions, homes sold prior to July 1, 1980, are treated differently in terms of taxation, particularly if they have not been converted to real property. These older models may retain their personal property classification, which can subject them to sales tax upon transfer, unlike newer manufactured homes which may be treated as real estate once they are affixed to land. Since they have not undergone a conversion process, they remain within this category, leading to the imposition of sales tax during transactions. Other options do not apply as broadly or do not carry the same regulatory requirements. For example, units installed in a mobile home park may not necessarily prompt a sales tax if they have been converted to real property. Similarly, used units may also be exempt depending on their prior classifications and whether they fit into the aforementioned categories. Thus, the distinction for those sold before 1980, combined with their unconverted status, solidifies the necessity of sales tax.