Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
362.0000 MOBILEHOMES AND COMMERCIAL COACHES—Regulation 1610.2
362.0140 Sales Price of a Mobilehome. A mobilehome dealer purchases mobilehomes from a manufacturer for resale to the public. The manufacturer offers its dealers a discount referred to as "Dealer Assistance Program" (DAP). The dollar amount of the discount depends on competitive conditions and the size of the mobilehome, but not upon the number of units purchased by the dealer. There are two methods for implementing the discount: (1) the amount of the discount is deducted from the "total price" on the invoice so that the amount shown as the "balance due" is the discount price; (2) while the amount of the discount is shown on the invoice, it is not deducted so the amount shown as the "balance due" is equal to the amount shown as the "total price." In these cases, the manufacturer rebates the discount to the dealer shortly after receiving full payment from the dealer. The dealer believes that the amount of the discount does not reflect a cost of goods sold and should be excluded from sales tax computations.
This opinion assumes the retail sale of the mobilehomes qualifies for taxation on 75% of the sales price to the retailer under sections 6012.8 and 6012.9. It is also assumes that the DAP discount applies only to mobilehomes and integral accessories (such as carpeting, wall paneling, room partitions and built-in appliances) and not to nonvehicle items (such as window awnings, skirting, furniture and free standing appliances). In such cases, the amount of either of the DAP discounts is excludable from the sales price. In other words, the dealer may subtract the amount of the discount from the total amount paid to the manufacturer before applying the 75% factor. 8/9/65.