Did the October 1, 1993 tax law change move mobile office trailers and rental bunkhouses from motor vehicle tax to sales tax?

Subject

Mobile Offices/Office Trailers Move to Sales Tax 10/1/93 — Rental Bunkhouses Still Taxed as Motor Vehicles

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9311L1277G12

Plain-English Summary

The Comptroller's office responded to a follow-up letter from a taxpayer asking about a tax law change affecting mobile offices that took effect October 1, 1993. The letter draws a clear line between two different kinds of units:

• Office trailers: House trailers designed to be used as an office, sales outlet, or other workplace were taxed under the Motor Vehicle Tax Code (Chapter 152) up until October 1, 1993. On that date they became subject instead to the Limited Sales Tax Code (Chapter 151). The Comptroller emphasized that this was the only change — the units are still taxable, just under a different chapter of the tax law.
• Bunkhouses: The taxpayer's units, rented out for use as living quarters at drilling locations, were identified as "bunkhouses" — house trailers with a bathroom, possibly limited kitchen facilities, and bunks, but not designed as single-family dwellings with separate bedrooms, a living room, kitchen, and bath(s) (that latter category is taxed instead under the Manufactured Housing Tax Code, Chapter 158). The law change did not apply to these bunkhouses. They were, and continued to be, taxed under the motor vehicle tax code.

The letter also confirms that an earlier letter from the same office, dated July 27, 1993, remains accurate: that letter had presumed the taxpayer's rental units were motor vehicles (bunkhouses), and since the October 1993 law change only affected office trailers — not bunkhouses — the taxability conclusions in the July 27 letter, including for the trailer rentals and associated equipment, did not change.

What This Means For You

If you own or rent out mobile/office trailers used as an office, sales outlet, or other workplace: As of October 1, 1993, these units are taxed under the Limited Sales Tax Code (Chapter 151) rather than the Motor Vehicle Tax Code (Chapter 152). They are still taxable — the change is which chapter of the tax law applies, not whether tax applies at all.

If you rent out bunkhouse-style trailers (e.g., for living quarters at drilling sites): This letter confirms the October 1993 law change does not apply to you. Bunkhouses — units with a bathroom, possibly a limited kitchen, and bunk space, but not laid out as a single-family home — continue to be taxed under the motor vehicle tax code, exactly as before.

If you have a "regular" trailer house designed as a single-family dwelling: This letter notes those units are taxed under a third category altogether, the Manufactured Housing Tax Code (Chapter 158), which is distinct from both the office-trailer and bunkhouse treatment discussed here.

Q&A

Q: Did the October 1, 1993 law change mean office trailers stopped being taxable?
A: No. The letter is explicit that office trailers "are still taxable, but under a different chapter of the tax law" — they moved from the Motor Vehicle Tax Code (Chapter 152) to the Limited Sales Tax Code (Chapter 151).

Q: Does the October 1993 change affect bunkhouses rented out for living quarters at drilling locations?
A: No. The letter states the law change "affected office trailers and not bunkhouses." Bunkhouses were, and still are, taxed under the motor vehicle tax code.

Q: What distinguishes a "bunkhouse" from a regular trailer house in this letter?
A: Bunkhouses generally have a bathroom, possibly limited kitchen facilities, and bunks in the remaining area. They are not designed as single-family dwellings with separate bedrooms, a living room, kitchen, and bath(s) — those regular trailer houses are taxed under the Manufactured Housing Tax Code (Chapter 158) instead.

Q: Does this letter change the conclusions from the Comptroller's earlier July 27, 1993 letter to the same taxpayer?
A: No. This letter confirms that the July 27, 1993 letter's conclusions about the taxability of the trailer rentals and associated equipment "did not change," because that letter already treated the units as motor vehicles (bunkhouses), which the October 1993 law change does not touch.

Original ruling text

November 2, 1993

Dear *:

This is in response to your letter dated October 25, 1993, asking about
tax law changes regarding mobile offices that took effect October 1, 1993.

House trailers that are designed to be used as an office, sales outlet or
other workplace were taxed under the Motor Vehicle Tax Code 152 until October
1, 1993 when they became subject to the Limited Sales Tax Code 151. That is
the only change, e.g. these units are still taxable, but under a different
chapter of the tax law.

The units *** rents for use as living quarters at drilling
locations (from the information provided to me) appear to be house trailers
commonly known as bunk houses. Bunkhouses are units that generally have a
bathroom, possibly limited kitchen facilities, and have bunks in the
remaining area. These units were not designed for single family dwellings
like a regular trailer house (which are taxed under the Manufactured Housing
Tax Code 158) with separate bedrooms, living room, kitchen, and bath(s).

The information in my letter to you dated July 27, 1993 was written under the
presumption that the units *** rents are motor vehicles (bunkhouses).
The law change mentioned above does not affect the trailers *****
rents which were and still are taxed under the motor vehicle tax code. Again,
the law change affected office trailers and not bunkhouses.

Information supplied to you in my July 27 letter regarding the taxability of
the trailer rentals and associated equipment did not change.

If you have any questions or need more information, please write or call
me at 1-800-531-5441, extension 5-0330, or 512/463-4600.

Sincerely,

Bettie Peterson
Tax Administration Division

NOTE: Previous Accession Number 9311194L