Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 362.0200

362.0200 Transfers of Used Mobile Homes. The following three scenarios explain the application of tax to the transfer of used mobile homes which were previously registered and are not subject to property tax.

In the first scenario, the registered owner of a mobile home (and tenant of a mobile home park) either abandons the mobile home or dies while in possession of the mobile home. Past due space rental is owing. The lienholder of the mobile home releases its interest to the mobile home park. The legal recourse available to the mobile home park is to obtain a judgment of abandonment pursuant to Civil Code section 798.61 followed by a public sale of the mobile home. At the sale, the mobile home park may bid and have the right to offset its bid to the extent of the amount due to it.

At the sale, typically, no one other than the mobile home park makes an offer on the mobile home. The mobile home park now seeks to have title transferred to itself.

The sale of the mobile home is directed by Civil Code section 798.61 and is subject to tax. (Regulation 1573(b).) The taxable measure of the sale is the total consideration, monetary or otherwise, paid by the mobile home park at the sale, up to the "guide value." The sales price is deemed to be the total sum due to the mobile home park by the former owner under the terms of the space rental agreement, up to the "guide value."

In the second scenario, the lienholder of the mobile home repossesses the mobile home and then voluntarily gives the mobile home to the mobile home park in lieu of paying past due space rental owned by the registered owner and tenant.

Civil Code section 798.56a permits a lienholder to keep a liened mobile home on the mobile home park premises pending foreclosure if the lienholder satisfies all of the homeowner's obligations to the management for the 90 days preceding the notice of termination of tenancy and until the mobile home is sold. If the lienholder transfers title to the mobile home in consideration of a release of the lienholder's liability under Civil Code section 798.56a, the measure of tax is the amount of the lienholder's liability (total tenant liability under the rental agreement 90 days prior to notice until sale), up to the "guide value."

In the third scenario, the mobile home owner dies owing the mobile home park past due space rental. The mobile home park puts a claim into probate for the past due space rental and the beneficiary gives the mobile home to the mobile home park to settle the claim.

A creditor who files a claim in a probate action voluntarily submits its claim to the court for any possible distribution including accepting any tangible personal property. Any tangible personal property acquired in the proceeding is "consideration" for the cancellation of its claim against the decedent. The measure of tax is the amount of the claim submitted to the probate court, up to the "guide value." 5/15/94.