Committee reviews amendment expanding sales‑tax exemption for manufactured homes

The House Committee on General and Housing on March 13 discussed an amendment to H757 that expands a sales‑tax exemption for manufactured homes sold under a bill of sale from 40% to 90%, creating an effective tax rate comparable to the property transfer tax.

Legislative counsel and a Ways and Means presenter told members the strike‑all amendment keeps the committee’s goals while avoiding a costly change to how the Department of Taxes administers the property transfer tax. "So they will get a 90% exemption from the sales tax for manufactured homes sold under a bill of sale," the presenter said, adding the change preserves the same final tax liability for taxpayers while reducing administration headaches.

The counsel explained the statutory purpose of the exemption is to approximate the portion of the price attributable to labor and to make manufactured homes tax treatment comparable to that of other residential construction. Under the proposed language, only 10% of a manufactured home’s value would be subject to sales and use tax, producing the intended effective tax outcome without altering the link between property law and tax law.

Members asked for clarification on timing and mechanics. Committee members confirmed the tax point under the amended approach is the point of purchase. Counsel also described a separate subsection granting a full (100%) sales‑tax exemption for energy‑efficient manufactured homes (ENERGY STAR or DOE zero energy ready), to match existing property transfer tax exemptions for those units.

The bill no longer contains a stand‑alone study requirement; committee counsel said that reporting language was moved into a separate general assessments bill and that appraisal‑method issues for limited‑equity cooperatives will be addressed through regional appraisal district language in that other bill.

The sponsor and chair said the amendment advances the bill’s core aims of protecting affordability for the state’s lower‑cost housing stock. The committee conducted an informal, nonbinding straw poll on the amended approach; staff recorded a count reported as "101" to capture committee sentiment before the bill proceeds to the floor. The bill was previously referred to Ways and Means and, according to the chair, will appear on the floor for second reading next Tuesday.

Members signaled there is more technical work to do — especially on deed versus bill‑of‑sale conversions and financing interplay — but said the amendment preserves the bill’s primary goal of aligning tax outcomes for manufactured housing.