In most states and cities, sales tax is a fact of life. On almost every purchase from a restaurant meal to a new car, you’ll pay a sales tax that funds critical government infrastructure and services.
So, do you pay sales tax on a mobile home purchase? The answer varies widely according to which state you live in. In most U.S. states, the answer is yes—sales and use tax does apply to mobile home purchases.
However, that’s not the full story. It’s important to understand that there are numerous complexities at the state level that can affect the amount of mobile home sales tax you pay. In this guide, we’ll briefly examine what they are.
Sales and Use Tax on Mobile Homes
Most U.S. states levy a sales or use tax that applies to manufactured home sales. However, mobile home sales tax rates vary widely, both between individual states and depending on the legal titling status of the manufactured home.
First, let’s establish the difference between sales tax and use tax:
- Sales Tax: Collected by the seller at the point of sale
- Use Tax: Collected by the government directly from the end user
A manufactured home dealer will typically collect sales tax at the time of the transaction. In some states, dealers aren’t allowed to collect sales tax directly, so they’ll include the tax in the price of the home instead.
Homebuyers who purchase a manufactured home from a private seller or from another state will often have to pay a use tax to their state or county government after the purchase is completed. You’ll need to contact state or county revenue authorities to determine the correct amount of tax to pay and where to send it.
Personal Property vs. Real Property
Sales and use tax usually only apply to manufactured homes that are titled and sold as personal property. Whether used or new, a manufactured home titled as personal property will be subject to the mobile home sales tax laws of the state. Typically, you’ll pay the statewide sales tax rate plus the local sales tax rate on a mobile home transaction, much as you would when buying any other type of personal property.
If you’re buying a pre-existing manufactured home that is attached to a permanent foundation, your home is considered real estate rather than personal property. Your state may or may not require sales tax on real estate sales. However, many states do levy a real estate transfer tax on real estate transactions and/or a capital gains tax if you sell your home at a profit. You can check the list of real estate transfer tax states to find out if your state has a transfer tax and calculate your capital gains tax using one of the many calculators available online.
Which States Charge Sales Tax on Mobile Homes?
Before you begin the process of buying a manufactured home, you’ll want to be aware of whether you’ll have to pay sales tax and the amount of tax you’ll owe. Usually, the easiest way to find this out is to contact the seller you’re working with or to find it on your state government’s website.
These five states charge no state-level sales tax on purchases of any kind:
- Alaska
- Delaware
- Montana
- New Hampshire
- Oregon
If you don’t live in one of the above states and your manufactured home is titled as personal property, you’ll need to research mobile home sales tax in your state. Keep in mind that, whichever state you live in, your city or county may require additional mobile home sales tax on top of what you owe the state. For the most accurate and up-to-date information on mobile home sales tax, consult your mobile home dealer or a real estate attorney.
Here are some facts about what you’ll pay for mobile home sales tax in some of the states with the largest numbers of manufactured homes:
- Alabama: 4 percent state sales tax, plus local taxes
- Arizona: 5.6 percent state sales tax, plus local taxes
- California: 7.25 percent state sales tax, plus local taxes
- Florida: 6 percent sales tax, plus local taxes
- Louisiana: 4.45 percent sales tax, plus local taxes
- Michigan: 6 percent sales tax, no local taxes
- Texas: 3.25 percent mobile home-specific sales tax
For more tax guidance for manufactured homeowners, see our guide to mobile home property taxes. And to learn about the other requirements for closing on a manufactured home sale, read our guide to closing on a mobile home.
