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State sales tax exemption extends to modular-built homes

October 20, 2009

BATON ROUGE – Effective July 1, 2009, a partial sales & use tax exclusion is available for modular homes and other “factory-built” homes purchased or used in Louisiana. Previously, the exclusion applied only to purchases of dwellings categorized as “manufactured homes”, known widely as mobile homes.

The exclusion applies only to factory-built homes that will be used for residential purposes. When these structures are used for any other purposes, the sales or use tax will be payable on the full sales prices or cost prices of the property.

Act 500 of the Regular Session of the 2009 Louisiana Legislature creates the category of “factory-built home,” defined as:

… a residential structure built in a factory in one or more sections which has a chassis or integrated wheel delivery system, which are built in accordance with federal or La. construction codes, or are a manufactured home, modular home, mobile home, or residential mobile home with or without a permanent foundation, which includes plumbing, heating, and electrical systems.

Under Act 500, all structures defined as factory-built homes are eligible for a 54-percent state and local sales tax exemption. The purchaser of a factory-built home must report and remit to the Louisiana Department of Public Safety, Office of Motor Vehicles, state and local sales & use taxes on 46 percent of the purchase price of the structure. The dealer has no obligation to collect and remit sales & use taxes on a factory-built home.
The expansion of eligibility for the reduced taxable base to all factory-built homes applies retroactively to all outstanding and unpaid taxes. However, taxes paid correctly under the laws in effect prior to the July 1, 2009, effective date of Act 500 are not eligible for refunds.

For more information, please contact the Special Programs Division of the Louisiana Department of Revenue at 225-219-7356.