Did PLR 97-6 impose South Carolina sales tax on mobile homes sold with the land as part of a mobile home park?

Plain-English summary

South Carolina Private Letter Ruling 97-6 concluded that 29 mobile homes sold together with a mobile home park's land and other buildings were real property, so their sale was not subject to sales tax.

The Department applied the fixture factors identified by South Carolina cases: how the item was attached, the character of the structure, the annexing party's intent, and the parties' relationship. These homes had their wheels removed, sat on permanent foundations, connected to utility services, and were surrounded by landscaping. Many had porches and additions that would be damaged or destroyed if the homes were removed.

Those facts showed that the homes were intended to remain part of the realty. The sales contract also transferred them with the land, brick duplex, and single-family home. Because South Carolina sales tax applied to retail sales of tangible personal property rather than real property, no sales tax was due on the portion of the price attributable to these mobile homes.

Common questions

Q: Are all mobile homes real property for South Carolina sales-tax purposes? No. The ruling emphasized the specific method of attachment and evidence of intent. It cited a case where utility connections alone did not make mobile homes fixtures.

Q: Which facts were most important here? Removed wheels, permanent foundations, utility connections, porches and other additions, surrounding landscaping, and sale together with the land.

Q: Would the result necessarily be the same if the homes could be moved intact? The ruling does not establish that. Its conclusion relied partly on the severe damage or disturbance removal would cause.

Q: Can another mobile-home park rely on PLR 97-6? No. The ruling limits reliance to its recipient and transaction and says it has no precedential value.

Citations and references

• S.C. Code Ann. § 12-36-910(A) (sales tax on retail sales of tangible personal property)
• City of North Charleston v. Claxton, 431 S.E.2d 610 (S.C. 1993) (fixture criteria and mobile homes)
• Rebel Manufacturing & Marketing Corp., 54 B.R. 674 (Bankr. D.S.C. 1985) (mobile home held a fixture under cited facts)
• South Carolina Attorney General Opinion No. 1955, December 14, 1965 (removed wheels and permanent foundations discussed)

Subject

Sale of ABC Mobile Home Park

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/PLR97-6.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214

SC PRIVATE LETTER RULING #97-6

TO:

Estate of Mr. XYZ
c/o Mr. ZXY
ABC Bank
Trust - Real Estate

SUBJECT:

Sale of ABC Mobile Home Park
(Sales and Use)

DATE:

October 21, 1997

REFERENCE:

S. C. Code Ann. Section 12-36-910(A) (Supp. 1996)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (Supp. 1996)
SC Revenue Procedure #97-8

SCOPE:

A Private Letter Ruling is an official advisory opinion issued by the
Department of Revenue to a specific person.

NOTE:

A Private Letter Ruling may only be relied upon by the person to whom it is
issued and only for the transaction or transactions to which it relates. A
Private Letter Ruling has no precedential value.

Question:
Will sales tax be due on sales of the mobile homes located in ABC Mobile Home Park?
Conclusion:
Sales tax will not be due on sales of the mobile homes located in ABC Mobile Home Park.
Facts:
The Estate of Mr. ZXY is selling ABC Mobile Home Park (“the park”). The park consists of
2.59 acres of land; a brick duplex; a single family home; and 29 mobile homes which are affixed
to the land. The mobile homes have had their wheels removed and have been placed on
permanent foundations. They are also attached to utility services; the area around the homes has
been landscaped; and many have porches and other additions. The duplex, single family home
and the mobile homes are currently being leased to tenants. The contract of sale provides that the
aforementioned structures are to be sold with the land.

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The Estate has asked if the sales tax will be due on the portion of the sales price attributable to
the mobile homes.
Discussion:
Code Section 12-36-910, which imposes the South Carolina sales tax, provides:
(A) A sales tax, equal to five percent of the gross proceeds of sales, is imposed upon
every person engaged or continuing within this State in the business of selling tangible
personal property at retail.
In other words, the sales tax is imposed on retail sales of tangible personal property. It is not
imposed on sales of real property.
For guidance in this matter, we refer to City of North Charleston v. Claxton, 431 S.E.2d 610
(S.C. 1993). While that case dealt with the value of property in a condemnation proceeding, it
also addressed the issue of real (fixtures) versus personal property.
Quoting from that case:
Criteria for determining whether an item remains personalty or becomes a fixture when
affixed to realty includes: (1) the mode of attachment; (2) the character of the structure of
the article; (3) the intent of parties making the annexation; and, (4) the relationship of the
parties. Creative Displays, 272 S.C. at 72, 248 S.E.2d at 918.
Mobile homes have been held to be both fixtures and personal property. [Footnote
omitted.] In this case, the record reflects that the Claxtons’ trailers were connected to
utility services. There is no evidence, however, that the trailers had other significant
attachments to the property such as permanent foundations or additions. Based on these
facts, we hold that the Claxtons’ mobile homes are not fixtures....[i.e. not real property]
The Court, in Claxton, referenced Rebel Manufacturing and Marketing Corporation, 54 B.R. 674
(Bankr.D.S.C. 1985). In that case, a bank argued that the sale of a mobile home was subject to a
mortgage on the realty because it was a fixture. The mobile home was underpinned, anchored,
and connected to sewerage, water and electric lines. Also, the home had a screened porch
attached and was adjacent to several large trees.
In ruling for the bank, the Court reasoned:
The various substantial structures and trees surrounding the mobile home would be
severely damaged, if not destroyed, should the mobile home be removed.

It seems clear that the debtor’s positioning the mobile homes among the trees, and adding
the construction [the porch] warrants the inference that the intent of the debtor was for
the mobile home to become a part of the realty.

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The above is supported by Attorney General Opinion No. 1955, dated December 14, 1965,
which states:
It has been ruled by the Tax Commission that house trailers from which wheels have
been removed and which have been placed on permanent foundations are no longer
vehicles subject to taxation as personal property. Atty. Gen. Ltr. to Hon. Robert S.
Floyd, dtd. Oct. 8, 1964.
Having viewed the mobile homes in question, it is concluded that they are attached to the realty
in such a way so as to indicate they are intended to be a part of the realty. They have had their
wheels removed; are attached to utilities; and are on permanent foundations. Also, many have
porches and other additions that would be severely damaged or destroyed if the mobile homes
were removed from the property. Further, the surrounding landscaping would be materially
disturbed. Based on these facts, the mobile homes are real property. Therefore, the sale of the
mobile homes, along with the other real property (i.e. the brick duplex; the single family home;
and the land), is not subject to the sales tax.

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