Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
190.0000 CONSTRUCTION CONTRACTORS—Regulation 1521
(a) IN GENERAL—ACTIVITIES CONSTITUTING CONTRACTING OR MAKING OF IMPROVEMENTS
The property should be classified as personal property unless it is affixed to the real property in such a manner as to constitute a permanent addition thereto. The property will be presumed to be personal property if the owner does not also own the real property or hold a lease for a term of years substantially equivalent to the life of the houseboat or floating home.
The term "vessel" is defined by Revenue and Taxation Code section 6273 to mean ". . . any boat, ship, barge, or floating thing designed for navigation in the water . . ." with certain specified exceptions. The term "vessel" includes houseboats and those floating homes capable of navigation under their own power or suitable for normal towing.
Floating homes are vessels without regard to the fact that they may be used as a place of residence and without regard to the nature or number of connections (sewer, water, power) between the floating home and the shore if the floating home, upon being disconnected, is suitable for normal towing.
Floating homes constructed upon reinforced concrete hulls having a rectangular vertical surface in front (as opposed to a "V" shaped or cantered bow) are not "designed for navigation in the water" but are designed merely to float. Floating homes installed upon plywood pontoons surfaced with fiber glass and open at the top are designed for flotation, not navigation. So, too, floating homes installed upon Styrofoam floats wrapped in polyethylene plastic film are not designed for navigation.
The fact that there is no means of propulsion aboard the floating home is irrelevant in determining whether the floating home is "designed for navigation." So, too, the mere absence of running lights, towing bitts, cleats, or a stern notch for pushing is not conclusive. A floating home may be regarded as a "vessel" in the absence of these items.
The fact that a floating home may be required to be registered with the Department of Motor Vehicles as an "undocumented vessel" under Vehicle Code section 9850 is not conclusive as to its classification under section 6273. A floating home may be subject to registration under the Vehicle Code yet not be suitable for normal towing and thus not a "vessel" under section 6273.
Floating homes constructed on concrete hulls, pontoons, or floats of the type described, in accordance with the Uniform Building Code or local construction ordinances are not "designed for navigation."
Some boats, ships, or hulls may be designed for navigation when first manufactured. These craft may be converted to residential use and may be connected to shore facilities. This alone does not affect the fitness of the craft for movement through the water. Thus a fishing boat converted to residential use is ordinarily a vessel.
Some units are designed as floating homes from the inception and are not built in a manner suitable for movement through the water. These units are not "vessels" under section 6273.
In summary, houseboats and floating homes are personal property. Their sale is not regarded as a sale of an interest in realty. However, not all floating homes may be classified as "vessels." The sale by a private party of a floating home not qualifying as a "vessel" would ordinarily be exempt from tax as an "occasional sale." 8/31/78; 2/26/81.