Reporting Taxable Sales of Manufactured Homes

NOT INSTALLED

When you sell a manufactured home without installation, you must report the sale and remit the tax collected using Form ST-556, Sales Tax Transaction Return. Sales without installation include sales in which your delivery and set up do not constitute incorporating the manufactured home into real estate as described above (e.g., the wheels, tongue, and hitch are not removed), sales to someone who will subsequently install or incorporate the manufactured home into real estate (e.g., a contractor), and sales to a purchaser who will subcontract the installation or incorporation of the manufactured home into real estate.

These transactions are taxable unless they qualify for one of the following specific exemptions

• a sale for resale (Step 5, Box B of Form ST-556); or
• a sale to an exempt organization with an active Illinois sales tax exemption “E” number (Step 5, Box C of Form ST-556);or
• a sale in which you deliver the manufactured home or cause it to be delivered outside Illinois (Step 5, Box F of Form ST-556).

Special note for sales to non-Illinois residents: Manufactured homes do not qualify for the exemption for a sale to a nonresident purchaser (Section 5, Box A, of Form ST-556). You must collect tax if you sell a manufactured home to a person who is not a resident of Illinois and who will take possession of the manufactured home in Illinois, before removing it to another state. The sale is taxable because the customer took possession of the manufactured home in Illinois.

INSTALLED

When you sell a manufactured home with installation by incorporating it into real estate, you are acting as a construction contractor and must pay the tax based on your cost price of the manufactured home and other items that become part of the real estate. Report these sales and pay the tax using Form ST-1, Sales and Use Tax and E911 Surcharge Return. The tax amount is based on your cost price, rather than the retail selling price, of the manufactured home because, in Illinois, construction contractors are considered the end user of an item, rather than the person for whom the construction is being performed. The reporting period for reporting your use tax liability on Form ST-1 is established by the date you install the manufactured home. If you purchased the manufactured home from an Illinois supplier, you must include your cost price of the manufactured home on Line 4a of Form ST-1 along with your taxable receipts and pay tax at the rate on line 4b. If you purchased the manufactured home from an out-of-state supplier who does not incur Retailers’ Occupation Tax liability, you must report and pay Use Tax directly to the Department using Step 5 (Tax on Purchases) of Form ST-1.

For more information on what taxes are due, see 86 Ill.Adm. Code Sections 130.1940, “Construction Contractors and Real Estate Developers,” and 130.2075, “Sales to Construction Contractors, Real Estate Developers and Speculative Builders.”