Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 362.0135

362.0135 Sale of a New Mobilehome Installed on an Indian Reservation. A mobilehome dealer (dealer) sold a new mobilehome to an Indian for residency and had a subcontractor install the mobilehome on an Indian reservation as required by the sales contract. The mobilehome was installed onto a nonpermanent foundation, i.e., piers or jacks and pads. The dealer claims that the sale of the new mobilehome should be excluded from the application of tax because the customer purchasing the mobilehome is an Indian residing on a reservation and requests a refund of the tax it paid.

The gross receipts for the sale of a mobilehome are subject to tax, as are other sales of tangible personal property, unless the sale is exempt, or is a sale of a new mobilehome for occupancy as a residence. (Regulation 1610.2.) Under subdivision 1610.2(b)(3)(B), a mobilehome dealer is the retailer-consumer of any new mobilehome sold to a customer for occupancy as a residence if the transaction would otherwise have been subject to the sales tax and the mobilehome is thereafter subject to local property taxation. Retailer-consumer status applies only if both the requirements of Regulation 1610.2(b)(3)(B) above are met.

If a sale is excluded from the application of tax, there is no reason to determine whether a dealer is a retailer-consumer with regard to that sale. If the dealer delivered the mobilehome to the reservation with its own trucks, title to the mobilehome transferred to the Indian purchaser on the reservation pursuant to Regulation 1628(b)(3)(D) and the sale is excluded from tax pursuant to Regulation 1616(d)(4)(A). However, if the mobilehome was delivered to an independent carrier who transported it to the reservation without delivery terms specifying delivery F.O.B. reservation, title to the mobilehome passed to the Indian purchaser off the reservation and tax applied to the sale. In the latter situation, the first requirement of Regulation 1610.2(b)(3)(B) is met, i.e., the sale is otherwise subject to the sales tax.

The second requirement, that the mobilehome be subject to property tax, is fulfilled when the mobilehome is the type of property subject to local property tax, regardless of the fact that the mobilehome is excluded from local property tax by applicable law concerning the taxability of Indian personal property on Indian reservations. Therefore, under Regulation 1610.2(b)(3), a dealer qualifies as a retailer-consumer in a taxable sale of a new mobilehome for occupancy as a residence when that mobilehome is sold to an Indian purchaser for installation on a temporary foundation on a reservation and the sale occurs off of the reservation. Conforming to Regulation 1610.2(b)(3)(B)1., the dealer must declare and pay tax based on 75 percent of its purchase price of the new mobilehome and 75 percent of the subcontractor's labor charge for installing the mobilehome. 2/5/04. (2005–2).