Iowa Admin. Code r. 701-282.7
When a customer purchases a mobile home or manufactured housing from a dealer, the customer often wants the dealer to prepare the mobile home or manufactured housing so that it is ready for the customer to move into it. To render a mobile home or manufactured housing "ready to move into," a dealer may sell, with the home or housing, certain tangible personal property and will also perform or arrange for other parties to perform various services.
With respect to any one particular mobile home or manufactured house that a dealer may sell, a dealer may provide any combination of the following services or provide the following services and sell the below-listed property to any person purchasing the home or house:
A dealer selling a mobile home or manufactured housing on a "ready-to-move-into" basis usually sells that home or housing and the services and additional property necessary to render it livable for one "package price." The dealer and customer do not bargain separately for the sale of the various articles of tangible personal property (e.g., the mobile home or manufactured house and appliances) or the services (e.g., electrical installation) that are part of this package price; nor is the dealer's package price broken down to indicate any of the expenses that are components of the package price either in the dealer's sales contract or on any sales invoice.
The package price of any one particular mobile home or manufactured house will vary depending upon how many services the dealer will provide or how much tangible personal property the dealer will sell in addition to the home or house. In many cases, a dealer will contract with a third party to perform the services promised in the dealer's contract to a customer. For example, the dealer will contract with a third party to hook up the home or house purchaser's electricity, install window air conditioning, or build a deck or perform minor repairs on the mobile home or manufactured house.
In the situation described above, the "purchase price" of a mobile home or manufactured house is the entire package price charged for the home or house, additional personal property for use in and around the home or house, and services performed to render the home or house livable. The entire amount of the package price, reduced by 80 percent, as explained in rule 701-219.7 (423), is used to calculate the amount of use tax due resulting from the sale of the mobile home or manufactured house. No part of the package price is subject to Iowa sales tax; rather, it is subject to Iowa use tax.
If separately contracted for, the sales price of the following services sold is subject to Iowa sales tax under Iowa Code section 423.2(6):
The sale, under separate contract, of skirting, steps, decks, furniture, appliances, and other tangible personal property to customers purchasing mobile homes or manufactured housing are sales of tangible personal property; the sales price is subject to Iowa sales rather than use tax.
The installation of a concrete slab on which to place the mobile home or manufactured housing is not a service taxable to the home or housing owner since this installation involves "new construction" and the service performed upon this new construction is thus exempt from tax. The person installing the concrete slab is treated as a construction contractor and pays sales tax upon any tangible personal property purchased and used in the construction of the slab. More information is contained in rule 701-Chapter 219.
This rule is intended to implement Iowa Code section 423.6(10).
Iowa Admin. Code r. 701-282.7
ARC 7717C, IAB 3/6/24, effective 4/10/24