How did Louisiana tax a dealer's sale of a movable building, and when did a permanently installed structure instead make the seller a contractor?

Plain-English summary

A building sold and installed so it remained movable was tangible personal property taxable on its full sales or cost price. A building fixed to a permanent concrete foundation before title and possession transferred was contractor work instead.

Temporary setup on blocks, even with utility connections, did not by itself make the structure immovable.

Movable-building sale

The taxable price included fabrication labor, overhead, and profit. Optional delivery and installation charges could be excluded when separately stated.

Because the seller resold movable property, it could purchase building materials and components for resale. A nonresident seller was not subject to contractor registration and bonding merely for the movable-building sale.

Occasional disposal sales

Movable buildings were not vehicles for the special vehicle rule. A person who was not a dealer could therefore qualify a disposal sale of a used movable building as an isolated or occasional nonretail sale.

Site preparation by nonresidents

Separate on-site work could trigger contractor rules. Under the ruling, nonresident site workers had to register and obtain a bond when the site-preparation contract was at least $3,000 or the work was bundled into a building sale of at least $3,000.

If site work was separately priced, the bond used that amount. If not, the bond used the building's entire sales price.

Permanent-foundation transaction

When the fabricator-contractor mounted the structure to a permanent concrete foundation before transferring title and possession, the seller was a contractor. The buyer was not charged sales or use tax on the immovable; the contractor paid tax on construction materials and components. A nonresident contractor also faced registration and bond requirements.

Manufactured-home distinction

The ruling's reduced taxable base applied only to a manufactured home meeting the federal definition in 42 U.S.C. § 5402(6). Other movable buildings did not receive that treatment.

Common questions

Q: Did connecting utilities make a temporary building immovable?

A: No.

Q: Were separately stated optional delivery and installation charges taxable?

A: No, under the ruling.

Q: Could a dealer buy components for resale?

A: Yes, when selling a movable building as tangible personal property.

Q: Who paid tax when the building became an immovable before transfer?

A: The contractor paid tax on the materials and components rather than collecting tax from the buyer on the finished immovable.

Citations and references

• La. R.S. 47:301(16)(g)(i-iv) — historical manufactured-home treatment
• La. R.S. 47:303(B)(4) — vehicle occasional-sale rule discussed as inapplicable
• La. R.S. 47:9 and 47:306(D) — nonresident contract registration and bond rules
• 42 U.S.C. § 5402(6) — manufactured-home definition
• Louisiana Civil Code arts. 463-466 and 468 — immovable-property context noted in the ruling
• Acts 2000, No. 30 and Acts 2001, No. 1212
• LAC 61:III.101.C — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 02-005

Original ruling text

Revenue Ruling
No. 02- 005
Sales and Use Tax
May 1, 2002
Sales and Use Tax Must Be Collected and Remitted on Sales of Movable Buildings1

This Revenue Ruling discusses the sales and use taxability of movable buildings, and
distinguishes them from manufactured homes, for which La. R.S. 47:301(16)(g)(i-iv) provides a
reduced state sales and use taxable base effective July 1, 2001.
Sellers and buyers of modular or movable buildings that are sold to purchasers as tangible
personal property must collect or pay sales or use tax on the full “sales price” or “cost price” of
the property. Recent changes to the sales tax law affecting the sales taxability of manufactured
homes2 apply only to those structures defined by Section 5402 of Title 42 of the United States
Code3. The sales and use taxation of movable buildings that do not meet the definition of
manufactured homes provided in the United States Code has not changed.
When buildings are sold and placed on land so as not to be permanent, the transactions for sales
and use tax purposes are considered sales of tangible personal property. In the typical nonpermanent installation, the buildings are constructed away from the sites where they are to be
installed. They are built in one or more sections on steel trailer frames with hitches and wheels
and are transported to installation sites. They are set up temporarily on concrete blocks, rather
than on concrete foundations. Movable buildings that are fabricated, moved, and set up in this
way will remain movable for state sales and use tax purposes even if area utilities lines are
connected to the movable buildings. In these instances, sellers will be required to collect and
remit the sales tax on the full “sales price” or “cost price” of the movable buildings, including

1

The word “building” is used throughout this Revenue Ruling to refer to these movable structures. This word is
used because that is the term by which these structures are known in the marketplace. The use of this word should
not be construed as meaning that the structures qualify as “buildings” as contemplated by the Louisiana Civil Code,
Articles 463-466 and 468.
2
Effective July 1, 2001, under Acts 2000, No. 30 and Acts 2001, No. 1212, sales of manufactured homes are subject
to state sales or use tax on 46 percent of the “sales price” or “cost price” of the property on the initial sale from the
dealer to the consumer. Each subsequent sale of a manufactured or mobile home shall not, for state sales tax
purposes, be considered a sale of tangible personal property. See R.S. 47:301(16)(g)(i-iv).
3
Under 42 USCS 5402(6), a manufactured home is defined as “a structure, transportable in one or more sections,
which, in the traveling mode, is eight body feet or more in width or forty body feet or more in length, or, when
erected on site, is three hundred twenty or more square feet, and which is built on a permanent chassis and designed
to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and
includes the plumbing, heating, air-conditioning, and electrical systems contained therein; except that such term
shall include any structure which meets all the requirements of this paragraph except the size requirements and with
respect to which the manufacturer voluntarily files a certification required by the Secretary and complies with the
standards established under 42 USCS §§ 5401 et seq. except that such term shall not include any self-propelled
recreational vehicle.”

A Revenue Ruling is written to provide guidance to the public and to Department of Revenue employees. It
is issued under Section 61:III.101(C) of the Louisiana Administrative Code to apply principles of law to a
specific set of facts. A Revenue Ruling does not have the force and effect of law and is not binding on the
public. It is a statement of the department's position and is binding on the department until superseded or
modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.

Revenue Ruling No. 02-005
Page 2 of 2

charges within the price of the buildings for fabrication labor, overhead, and profit. Separately
stated optional charges for delivery and installation can be excluded from the taxable “sales
price” or “cost price” of the property. Sellers of these movable structures can treat their
purchases of building materials and building components as purchases of tangible personal
property for resale.
Since movable buildings are not considered vehicles for purposes of vehicle registration and title
requirements, movable buildings are not subject to La. R.S. 47:303(B)(4), which provides that no
sale of a vehicle shall be considered an “isolated or occasional” sale. Disposal sales of used
movable buildings by persons who are not engaged as dealers for the sale of this property are
eligible to be treated, for sales and use tax purposes, as “isolated or occasional” non-retail sales.
Sellers of movable buildings that are subject to the sales tax are not considered, for sales and use
tax purposes, to be immovable property contractors. Because they are sellers of movable
property, rather than contractors, nonresident sellers are not subject to the contract registration
and bond requirements of La. R.S. 47:9 and 47:306(D) with respect to their sales of movable
property. However, sellers of movable buildings or persons under contract to them might also be
required to perform work on the sites where the buildings will be placed. If nonresidents of
Louisiana perform the site preparation work, and the contract price for the site preparation work
is $3,000 or more or the work is included in the sales price of a building of $3,000 or more, the
nonresident persons performing the site work will be required to register the site preparation
contracts and obtain bonds, as required by La. R.S. 47:9 and 306(D). The amounts of the bonds
will be based on the value of the site preparation contracts if those amounts are separately stated
from the sales prices of the movable buildings. If the amounts charged for site preparation are
not separately stated, the bonds will be based on the entire sales prices of the buildings.
When buildings are sold as immovables, as in cases where the fabricator-contractor mounts the
fabricated building to a permanent concrete foundation before transferring title and possession of
the building to the buyer, the building seller is considered a contractor. Sales or use tax is not
collected from the buyer of the immovable structure, as is done on the sale of a movable
building. The seller-contractor is required to pay the sales or use tax on all of the construction
materials and components of the building structure. A nonresident seller-contractor of such a
building will be subject to the contract registration and bond requirements of La. R.S. 47:9 and
R.S. 47:306(D).
Questions concerning this matter can be directed to the Policy Services Division at (225) 2192780.
Cynthia Bridges
Secretary
By:

Raymond E. Tangney
Senior Policy Consultant
Policy Services Division