You may remember we reported back in August 2013 about the new tax laws N.C. Governor Pat McCrory signed into law in July, 2013, which increased the sales tax consumers would pay on manufactured and modular homes by 4.75%. The N.C. Manufactured Home Association (NCMHA) fought very hard against this legislation, and today we are happy to report there has been a favorable change in this new law.
On August 7th, Governor McCrory signed into law the Appropriations Act of 2014, which states that as of September 1, 2014, 50% of the sales price for both HUD Code and Modular Home sales will be exempt from taxation. Thus, for sales on and after September 1, 2014, 50% of the sales price will be exempt from tax. Below are examples of how this new act affects HUD and Modular home sales:
1. HUD Code - "The general rate of 4.75% applies to the sales price of each manufactured home sold at retail, including all accessories attached to the manufactured home when it is delivered to the purchaser." Beginning September 1, 2014, in order to determine the tax liability you will exempt 50% of the sales price and multiply that amount by 4.75%. (The retailer will continue to collect the tax when the home is sold to the consumer.)
Example: Retailer sells HUD home for $50,000 to consumer. To calculate the tax you will: $50,000/50% = $25,000. $25,000 x 4.75% = $1187.50
2. Modular - "The general rate of 4.75% applies to the sales price of each modular home sold at retail, including all accessories attached to the modular home when it is delivered to the purchaser. The sale of a modular home to a modular homebuilder is considered a retail sale. The retail sale of a modular home occurs when a modular home manufacturer sells a modular home to a modular homebuilder or directly to the end user of a modular home." Beginning September 1, 2014, in order to determine the tax liability, you will exempt 50% of the sales price and multiply that amount by 4.75%. (The manufacturer will continue to collect the tax when the modular home is sold to the retailer.)
Example: Manufacturer sells MOD to retailer/builder for $100,000. To calculate the tax you will: $100,000/50% = $50,000. $50,000 x 4.75% = $2,375.
Your North Carolina Manufactured Home Association (NCMHA) fought very hard for this change in legislation by making calls, sending emails and making personal visits with legislators. Without those efforts, this legislation may have never been approved. A very special thank you goes out to all those members!
Frank's Home Place believes in keeping you up to date with any new laws or changes in regulations that affect your purchase of a new manufactured or modular home. For further information on these or other changes, please feel free to contact us any time!