95-057

Responses July 17, 1995 and September 6, 1995

 

 

Request

August 29, 1995

 

Roger O. Tew, Commissioner

Utah State Tax Commission

210 North 1950 West

Salt Lake City, UT 84134

 

Dear Mr. Tew:

 

We have a client who is a mobile home dealer, and was impacted by the recent change in the legislation with regards to the sales tax on mobile homes. We would like clarification in writing as to the state's position on the effective date of this legislation. Specifically, we are wondering if an order was drawn up and funds (either partial or in full) were received on a transaction prior to XXXXX, but the transaction was not actually closed until after XXXXX what sales tax rate should be charged.

 

Sincerely,

 

XXXXX

 

 

July 17, 1995

 

XXXXX

 

RE: Advisory Opinion - Retroactivity of Sales Tax Exemption on Mobile Homes

 

Dear XXXXX,

 

You asked Commissioner Oveson to consider applying the new mobile home sales tax exemption retroactively to people who purchased mobile homes prior to the exemption. Apparently some mobile home owners neglect to properly register their mobile homes in order to avoid sales tax on the purchase of a mobile home.

 

We know that improperly registered mobile homes cause problems with your property records, and we want to help. However, this particular request is beyond our authority. The legislature, in enacting the exemption, specifically set XXXXX as the effective date. We cannot override the legislature's directive by applying the statute retroactively.

 

If we can help you in some other way, please let us know.

 

Sincerely,

 

Alice Shearer

Commissioner

 

 

September 6, 1995

 

XXXXX

 

RE: Advisory Opinion - Effective date of the sales tax exemption for mobile homes.

 

Dear XXXXX,

 

We have received your request for information about the effective date of Senate Bill 289 which extends a 45% sales tax exemption to sales of new mobile homes and a 100% exemption to sales of used mobile homes. Senate Bill 289 carries an effective date of July 1, 1995. To qualify for the exemption, the sale must have occurred on or after that date. Unless otherwise explicitly stated in the sales contract, we consider the sale to be complete when title passes. As a rule, title passes when the seller completes his performance with regard to delivery.

 

It is possible that your client has been involved in transactions that overlapped the effective date of this exemption. That is, a buyer entered into a sales agreement for the mobile home before July 1, 1995, but the contract obligated the dealer to deliver the mobile home to a site selected by the purchaser after July 1. In such a case, the Commission would consider the sale to be complete when the buyer takes delivery and assumes the risk of loss for the mobile home. If the buyer assumed the risk upon entering the sales contract, the sale was complete before the effective date of the exemption and sales tax is due. If the buyer assumed the risk upon delivery of the mobile home, the sale was completed after the effective date of the exemption and the exemption applies.

 

This opinion is based only the facts presented in your letter. If additional facts arise which present new questions, please feel free to request another advisory opinion.

 

For the Commission,

 

Alice Shearer

Commissioner