Effective July 1, 2004 used and new manufactured homes built to Housing and Urban Development (HUD) standards, and placed on a temporary foundation, must be titled and are subject to a 3% initial registration fee if the homes are to be moved to a temporary foundation. If a home was previously on a permanent foundation and moved to a temporary foundation, it must be titled and is subject to the 3% fee. Dealers may purchase HUD homes and materials and services used to construct manufactured homes exempt from tax because they are for resale. Dealers who sell and install manufactured homes to be installed on a permanent foundation in a different city are responsible for the 4% state use tax and any applicable contractors’ excise tax and municipal taxes. In addition, dealers who sell manufactured homes to be installed outside the state are responsible for the 4% state sales tax and applicable local use taxes, but not contractors’ excise taxes, unless the dealer does not have the contract to install the home on its permanent foundation, in which case the dealer is not considered the prime contractor. For homes sold to be on a permanent foundation where installation is not included the taxable base would be the cost of the raw materials and the state and municipal sales tax would apply. Delivery charges are included in the sale price of the home. Display models are considered to be still in inventory and are not subject to sales or use tax or the 3% initial registration fee if the manufactured home is only being used for display purposes. For more information, taxpayers can call the Business Tax Division at 800-829-9188. (Tax Facts #221, July 2004)