Tax Type
Retail Sales and Use Tax
Description
Contractors;Modular Home Builders
Topic
Taxability of Persons and Transactions
Date Issued
04-03-1985
April 3, 1985
Dear ****
This will reply to your letter of November 19, 1984, in which you request a clarification to the application of the sales and use tax to builders of modular homes.
Section 58.1-610A of the Code of Virginia provides:
As the provision of services with respect to real estate is the key to determining whether a modular home builder is a contractor or retailer, the point at which title to a home passes from the builder is of no consequence. As to the examples provided in your March 30, 1984 letter, I would consider a modular home builder to be a contractor when he assists in actually affixing a modular home to real estate; however, I do not consider a builder to be a contractor solely by virtue of his responsibility for the correction of construction defects after the affixation of a modular home to real estate.
Dear ****
This will reply to your letter of November 19, 1984, in which you request a clarification to the application of the sales and use tax to builders of modular homes.
Section 58.1-610A of the Code of Virginia provides:
-
- Any person who contracts orally, in writing, or by purchase order, to perform construction, reconstruction, installation, repair, or any other service with respect to real estate or fixtures thereon, and in conjunction therewith to furnish tangible personal property, shall be deemed to have purchased such tangible personal property for use or consumption. Any sale, distribution, or lease to or storage for such person shall be deemed a sales distribution, or lease to or storage for the ultimate consumer and not for resale . . .
- Any person who contracts orally, in writing, or by purchase order, to perform construction, reconstruction, installation, repair, or any other service with respect to real estate or fixtures thereon, and in conjunction therewith to furnish tangible personal property, shall be deemed to have purchased such tangible personal property for use or consumption. Any sale, distribution, or lease to or storage for such person shall be deemed a sales distribution, or lease to or storage for the ultimate consumer and not for resale . . .
As the provision of services with respect to real estate is the key to determining whether a modular home builder is a contractor or retailer, the point at which title to a home passes from the builder is of no consequence. As to the examples provided in your March 30, 1984 letter, I would consider a modular home builder to be a contractor when he assists in actually affixing a modular home to real estate; however, I do not consider a builder to be a contractor solely by virtue of his responsibility for the correction of construction defects after the affixation of a modular home to real estate.
Rulings of the Tax Commissioner