How is sales or use tax charged when someone buys a mobile home and installs it permanently on New York land — and does living out of state change it?

Plain-English summary

Elsa and Carlos Rosa, residents of New Jersey, planned to buy a mobile home and install it permanently on their land in the Town of Bethel, New York. They asked three things: what qualifies as a mobile home, who owes the tax, and how it is calculated.

The Department held the answer depends on whether the home is new or used, where it is bought, and whether the buyer is a New York resident.

• What is a "mobile home." Section 1101(b)(10) defines it as manufactured housing that is not self-propelled, transportable, built on a permanent chassis to connect to utilities, and designed as a permanent dwelling for residential or commercial use — including "double wides." It excludes temporary/travel structures and loose furnishings not built in at manufacture.
• Who owes tax, and when. A new mobile home bought in New York is subject to sales tax regardless of the buyer's residence. A new mobile home bought outside New York and then used here is subject to compensating use tax only if the buyer was a New York resident at the time of purchase; a nonresident's purchase is exempt under § 1118(2) (unless used in a New York trade or business). A used mobile home is exempt (§ 1115(a)(23)) whether bought in or out of state.
• Permanent installation doesn't create an exemption. A mobile home is not a capital improvement to real property (§ 1101(b)(9)) no matter how it is installed, so the capital-improvement exemption never applies — but the charge for installing the home is itself exempt.
• How the tax is figured. New mobile homes are taxed on 70% of the retail selling price (covering manufacturer-installed furnishings such as water heaters, furnaces, sinks, cabinets, counter tops, exhaust fans, and ducted hoods). Items not permanently installed by the manufacturer — or installed by the dealer (furniture, draperies) — and appearance items like skirting, decks, and awnings are taxed at 100% (their installation labor too), and must be itemized on the invoice. A trade-in accepted for resale and separately stated transportation are excluded from the taxable amount. If the buyer used the home out of state for more than six months before first New York use, the use tax is based on current market value (not exceeding cost).

What this means for you

New vs. used is the biggest switch. A used mobile home is exempt from New York sales and use tax; a new one is taxable. That single fact can be worth thousands.

Where you buy it and where you live decide the use-tax question. Buy new in New York and you pay New York sales tax no matter where you live. Buy new out of state and bring it in, and you owe New York use tax only if you were a New York resident when you bought it — a genuine nonresident (not using it in a New York business) is not taxed on that later use.

Don't expect the "capital improvement" break. Even bolted onto a permanent foundation on your own land, a mobile home is never a capital improvement for sales tax. Plan for tax on the home (on 70% of price if new), with only the installation labor exempt — and watch that dealer-added furniture, skirting, decks, and awnings are fully taxable.

Common questions

Q: I'm buying a used mobile home. Do I owe New York tax?
A: No. Used mobile homes are exempt from New York sales and use tax under § 1115(a)(23), whether bought in state or out.

Q: I live out of state but will put a new mobile home on my New York land. Do I owe use tax?
A: If you buy it new outside New York and were a nonresident when you bought it, your later use in New York is exempt under § 1118(2) — unless you use it in a New York trade or business. Buying it new in New York, though, is taxed regardless of residence.

Q: How much of the price is taxed on a new mobile home?
A: 70% of the retail price, covering manufacturer-installed furnishings. Loose or dealer-installed items (furniture, draperies, skirting, decks, awnings) are taxed at 100%, and the installation of the home itself is exempt.

Citations and references

Statutes and regulation:

• Tax Law § 1101(b)(10), (b)(11) — definitions of "mobile home" and "new mobile home"
• Tax Law § 1105(a) — taxes retail sales of tangible personal property
• Tax Law § 1118(2) — use-tax exemption for property purchased while a nonresident
• Tax Law § 1115(a)(23) — exempts used mobile homes
• Tax Law § 1101(b)(9) — a mobile home is not a capital improvement to real property
• 20 NYCRR 531.4(b) — use-tax base on current market value after more than six months' prior out-of-state use
• 20 NYCRR 526.5(f), (g) — trade-in and separately stated transportation excluded

Department guidance:

• TSB-M-83(24)S and TSB-M-83(24.1)S — Mobile Homes (70% tax base, itemization, installation rules)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1987.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a87_25s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-87(25)S
Sales Tax
August 12, 1987

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S870403B

On April 3, 1987, a Petition for Advisory Opinion was received from Elsa and Carlos Rosa,
99 Ella Street, Bloomfield, New Jersey, 07003.
The issues raised are (I) what qualifies as a mobile home for purposes of section 1101(b)(10)
of the Tax Law, (II) who is liable for the payment of sales and use tax on the purchase of such a
mobile home and (III) how is the applicable tax to be calculated.
Petitioners intend to purchase a mobile home to be permanently installed on a parcel of land.
The land, owned by Petitioners, is located in the Town of Bethel, Catskill Mountains, New York
State.
Issue I
Section 1101(b)(10) of the Tax Law sets forth the characteristics of a "mobile home" for
purposes of the sales and use tax. It provides:
(10) Mobile home. (i) A structure which is:
(A)

A type of manufactured housing; and

(B)

Not self-propelled; and

(C)

Transportable in one or more sections:

(I) that may be folded, collapsed or telescoped when being towed and
expanded later to provide additional cubic capacity, or
(II) that may be separately towable and designed to be joined into one integral
structure capable of being again separated into the sections for repeated towing; and
(D)
Built on a permanent chassis, comprised of frame and wheels, that is to be
connected to utilities; and
(E)
Designed to be used as a permanent dwelling, with or without permanent
foundation; and
(F)

Used for residential or commercial purposes.

(ii) The term "mobile home" shall also include structures commonly called "double
wides".
RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

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August 12, 1987
(iii) The term "mobile home" shall not include:
(A)
Structures designed and constructed primarily for temporary living quarters,
recreations, camping or travel; or
(B)
Furniture, fixtures, furnishings, appliances, attachments or similar tangible
personal property not incorporated as component parts of a mobile home at the time of
manufacture.
In section 1101(b)(11), a new mobile home is stated to be one:
.... which is sold for the first time at retail including all components incorporated into such
mobile home at the time of manufacture and remaining unchanged at the time of the first
retail sale thereof.
The "mobile home" to be purchased must meet the definition of mobile home to come within
the special provisions of the Tax Law applicable to mobile homes.
Issue II
Section 1105(a) of the Tax Law imposes a tax upon the receipts from every retail sale of
tangible personal property, except as otherwise provided.
Section 525.2(a)(4) of the sales and use tax regulations provides, in part, that "the tax is
imposed on the retail sale of tangible personal property .... and is collected from the person who
purchases at retail - the consumer."
Section 1101(b)(4) of the Tax Law defines "retail sale" as "[A] sale of tangible personal
property to any person for any purpose, other than for resale as such .... (however) a sale of any
tangible personal property to a contractor, subcontractor or repairman for use or consumption in
erecting structures or buildings, or building on, or otherwise adding to altering, improving .... real
property .... is deemed to be a retail sale regardless of whether the tangible personal property is to
be resold as such .... except that a sale of a new mobile home to a contractor, subcontractor, or
repairman who, in such capacity, installs such property is not a retail sale."
Section 525.2(b) of the sales and use tax regulations provides, that a "compensating use tax
is imposed on the use within the State of tangible personal property and services which would have
been subject to sales tax if purchased in this state."
In addition, section 531.4(a) of the regulations states "when tangible personal property is
purchased outside of the State by a resident of the State, for use outside of the State, and is
subsequently used in the State, the compensating use tax is due on the purchase price."

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Sales Tax
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Section 1118(2) of the Tax Law exempts from the compensating use tax:
...property purchased by the user while a nonresident of this state,
except in the case of tangible personal property which the user, in the
performance of a contract, incorporates into real property located in
the state. A person while engaged in any manner in carrying on in
this state any employment, trade, business or profession, shall not be
deemed a nonresident with respect to the use in this state of property
in such employment, trade, business or profession.
A resident is described in part, in section 526.15(1) of the regulations as, "any individual who
maintains a permanent place of abode in this State."
A permanent place of abode as stated in section 526.15(2) is a dwelling place maintained by
a person, or by another for him, whether or not owned by such person, on other than a temporary or
transient basis. The dwelling may be a house, apartment, or flat, a room including a room at a hotel,
motel, boarding house or club; or at a residence hall operated by an educational or charitable or other
institution, or a trailer, mobile home, houseboat or any other premises.
Section 525.2(a)(2) of the regulations provide, in part, that the sales tax is a destination tax
in which the point of delivery or the time possession is transferred from the vendor to purchaser
controls both the tax incident and the tax rate.
Section 1105(c)(3) of the Tax Law "imposes a tax on receipts from the service of installing
tangible personal property .... except for installing property which, when installed, will constitute an
addition or capital improvement to real property, property or land.
Section 1101(b)(9) of the Tax Law states that "A mobile home shall not constitute an
addition or capital improvement to real property, property or land regardless of the nature of its
installation.
As a result of Chapter 986, Laws of 1983, effective September 1, 1983, all sales of new
mobile homes by manufacturers to dealers, and all sales to contractors, subcontractors or repairmen
who make installations .... are now sales for resale. (Technical Services Bureau Memorandum,
Mobile Homes, September 1, 1983, TSB-M-83(24)S).
Section 1115(a)(23) exempts used mobile homes from the sales and use tax.
Accordingly, the Petitioners, as the purchaser, must pay compensating use tax on a new
mobile home purchased outside the State if it is subsequently used within the State and if Petitioners
were residents of the State at the time of purchase. A used mobile home purchased outside the State
and subsequently used within the State is not subject to compensating use tax. The Petitioners must
also pay sales tax on a new mobile home purchased within New York State regardless of their

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residence. However, a used mobile home purchased within the State is exempt from tax. Tax must
be paid irrespective of whether the mobile home is to be permanently installed on a parcel of land.
A mobile home is not recognized in New York as a capital improvement to real property, therefore
the exemption for capital improvements will not apply.
Issue III
As a result of Chapter 986 of the Laws of 1983, the tax on new mobile homes is applied to
70% of the retail selling price. This rule is applicable to the selling price allocable to the mobile
home including any furnishings permanently installed by the manufacturer. Examples of tangible
personal property permanently installed by the manufacturer are water heaters, furnaces, sinks,
cabinets, counter tops, exhaust fans, and ducted hoods. (Technical Services Bureau Memorandum,
Mobile Homes, November 7, 1983, TSB-M-83(24.1)S).
Section 531.4(b) of the sales and use tax regulations further states, "where a resident
affirmatively shows that he used such property outside the State for more than six months prior to
its first use in New York, the use tax is based on the current market value of the property, not to
exceed its cost, at the time of first use within New York."
The seventy percent rule above is not applicable to furniture, fixtures, furnishings, appliances,
attachments or similar tangible personal property not permanently installed by the manufacturer.
Also, it is not applicable to items installed by the dealer such as furniture and draperies. Items not
permanently attached and those attached by the dealer are taxed to the purchaser at 100% of their
selling price. The invoice given to the purchaser must list all items of tangible personal property
individually, along with their applicable selling price. A copy should be retained by the dealer for
his records. (Ibid.)
Any charge for installation of the mobile home is exempt from tax. However, items of
tangible personal property intended to enhance the appearance of the home, but not necessary to
make it habitable, are fully taxable to the purchaser. Labor to install such items is also fully taxable.
Examples of such items are skirting, decks and awnings. (Mobile Homes, TSB-M-83(24.1)S.)
Section 531.3 of the sales and use tax regulations provides, in part, that for the use tax due
"credit is allowed for tangible personal property accepted in part payment and intended for resale,
and for transportation costs."
Regulation sections 526.5(f) and (g) explain further:
(f) Trade-in. Any allowance or credit ... accepted in part payment ... and intended for resale
... shall be excluded when arriving at the receipt subject to tax.
(g) Transportation. (1) The cost of transportation of tangible personal property sold at retail,
which is separately stated in written contract, if any, and on the bill rendered to the purchaser is
excluded from the receipts subject to the tax.

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(2) To qualify for the exclusion transportation costs must be for the delivery of the
tangible personal property to the purchaser.
For further information regarding calculation of tax on mobile homes, see Technical Services
Bureau, TSB-M-83(24.1)S.

DATED: August 12, 1987

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.