701—282.8(423) Tax imposed on the use of manufactured housing as tangible personal property and as real estate. Tax is imposed on the use of “manufactured housing” in Iowa.
	282.8(1) Definition.
“Manufactured housing” means the same as defined in Iowa Code section 321.1.
	282.8(2) Tax treatment of manufactured housing that is similar to the tax treatment of mobile homes.
	a. 	Manufactured housing is subject to Iowa use tax to the extent provided in Iowa Code section 423.6(10) and shall be paid as provided in Iowa Code section 423.26A.
	b. 	The use of manufactured housing previously subject to tax and upon which the tax has been paid is exempt from further tax.
	c. 	The taxation of manufactured housing that is sold in the form of tangible personal property is similar to the taxation of mobile homes that are sold in the form of tangible personal property. More information is contained in rule 701—282.7(423).
	282.8(3) Taxable use of manufactured housing in the form of real estate. Unlike mobile homes, the use of which can be taxed only when the homes are in the form of tangible personal property, under certain conditions, the use of manufactured housing in the form of real estate can be subject to tax. If a developer has placed a manufactured home on a foundation in a lot in Iowa and hooked up the necessary utilities and completed the necessary landscaping to convert the home from tangible personal property to realty, the sale of the manufactured home to a user is a taxable use of the home on the user’s part.
Example: Company A buys land with enough space for 100 lots for manufactured housing and for the streets necessary to provide access to the lots. Company A then buys 100 manufactured houses. It lawfully buys these houses exempt from use tax based on the assertion that they have been purchased for subsequent resale. Company A then develops the land, installing water, sewer and electric lines, placing the manufactured homes on foundations, and otherwise taking steps to convert the homes from tangible personal property to real estate.
Company A then sells the homes on the lots to various customers. Each purchase of a home by a customer is a taxable use of the home on that customer’s part, and the customer is obligated to pay the appropriate county treasurer the amount of Iowa use tax due.
	a. 	Installed purchase price. When tax is due on the use of manufactured housing in the form of real estate, the basis for computing the tax is the “installed purchase price” of the manufactured housing. Installed purchase price means the same as defined in Iowa Code section 423.1(23). Use tax is due on 20 percent of the amount of the installed purchase price.
	(1)	Included in the installed purchase price. Included within the meaning of “installed purchase price” are amounts charged to a buyer of a manufactured home to build and install a foundation on which to place a home; amounts charged to hook up electric, water, gas, sewer system, and other lines for necessary utilities; amounts charged to sell and install “skirting” as described in subrule 282.7(1); amounts charged to build and install any steps for a door; and amounts separately charged for any appliances or other items that become a part of the housing after installation, e.g., dishwashers and whirlpool tubs.
	(2)	Exclusions from installed purchase price. Excluded from the meaning of “installed purchase price” is any amount charged for the purchase of land on which to place a manufactured house; any amount charged for landscaping in connection with the installation of a manufactured house; any amount charged to build and install any deck or similar appurtenance to a manufactured home; and any amounts charged for the sale of furniture or appliances that remain tangible personal property after installation, e.g., furniture, room air conditioners, and refrigerators. This list of inclusions and exclusions is not exclusive. Furthermore, the purchase of furniture or appliances that remain tangible personal property is subject to Iowa sales or use tax.
	b. 	The exemption in favor of taxable services performed on or in connection with new construction as described in Iowa Code section 423.3(37) is not applicable when calculating the amount of any installed purchase price.
This rule is intended to implement Iowa Code section 423.6(10).
[ARC 7717C, IAB 3/6/24, effective 4/10/24]