95-083

ResponseNovember 20, 1995

Request

November 20, 1995

XXXXX

RE: Advisory Opinion - Calculating sales tax exemption on sales of manufactured homes when the dealer accepts a trade-in.

Dear XXXXX,

This advisory opinion is issued in response to your recent telephone inquiry about how to calculate sales tax exemption on a manufactured home when a trade-in is involved. We interpret the exemption as follows:

Under Utah Administrative Rule R865-19S-72, when a dealer takes a mobile home as trade in part payment on the sale of a new mobile home, the sales tax applies only to the net difference in value. The sales tax exemption, then, applies only to the portion of the sale that is subject to sales tax. Therefore, the exemption should be calculated as in the following manner:

Deduct the trade-in value from the total sales prices to arrive at the net sales price. Apply the exemption to the net sales price to determine the total taxable value. Apply sales tax to the total taxable value.

Thank you for bringing this issue to our attention. We will notify the other Utah dealers of our decision. Please let us know if we can be of further assistance.

For the Commission,

Alice Shearer

Commissioner