1. (a) Definitions. The following words and terms when used in this section shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Mobile Office--A trailer designed to be used as an office, sales outlet, or work place.
   2. (2) Portable building--A self-contained transportable structure that does not require attachment to a foundation or to realty in order to be functional. An example of a portable building is a tool shed.
   3. (3) Prefabricated building--A structure, not designed to be a residential dwelling, built at a location other than its permanent site, and that is later transported in one or more sections and affixed to realty.
   4. (4) Ready-built home--A structure that does not bear a label or decal issued by the Texas Department of Licensing and Regulation or the U.S. Department of Housing and Urban Development, but that is designed to be a residential dwelling constructed precut, partially assembled, or fabricated in whole or in part at a location other than the home site and later transported in one or more sections and assembled on a permanent foundation.
   5. (5) The terms mobile home, ready-built home, prefabricated building, and portable building do not include a house trailer, as defined in and subject to the provisions of Texas Tax Code, Chapter 152, or a manufactured home, as defined in and subject to the provisions of Texas Tax Code, Chapter 158. See §3.72 of this title (relating to Farm Machines, Timber Machines, and Trailers) and §3.481 of this title (relating to Imposition and Collection of Tax).

2. (b) Application of the sales tax.

   1. (1) A sale of a mobile office is a taxable sale of tangible personal property. Sales tax is due on the total sales price charged by the seller, including delivery charges.
   2. (2) A sale of a portable building is a taxable sale of tangible personal property. Sales tax is due on the total sales price charged by the seller, including delivery charges.
   3. (3) A contract to sell a prefabricated building or a ready-built home is considered a contract for an improvement to realty when the seller is required to build, transport, and affix the structure to a permanent site. See §3.347 of this title (relating to Improvements to Realty). If the contract requires the seller to perform services such as preparing the foundation, plumbing, sewer hookup, septic tank preparation, supporting, blocking, or leveling, the seller's sales tax responsibilities are determined by whether the contract separates charges for materials from charges for labor. See §3.291 of this title (relating to Contractors).
   4. (4) The sale of a ready-built home or a prefabricated building that is not at the time of sale affixed to its permanent site is a taxable sale of tangible personal property if sold to a person responsible for affixing the structure to realty.
   5. (5) A sale of a structure that is affixed to realty is nonetheless a taxable sale of tangible personal property if the purchaser is obligated to remove the structure from its site.

   6. (6) An "in-place" sale of items such as fixtures, machinery, and equipment is considered a sale of tangible personal property if the seller:

      1. (A) is a lessee of the real estate or building to which the items are affixed; and
      2. (B) has the present right to remove the items either as trade fixtures or under the express terms of the lease. Sales tax is due on that portion of the total consideration allocable to the in-place items without regard to the fact of their physical attachment to real property.

3. (c) Parts and accessories added to manufactured housing by the retailer. Limited sales or use tax is due on parts or accessories installed by the retailer in a manufactured home.

   1. (1) If the retailer sells the home for a lump sum amount that includes both the home and parts, the retailer should not collect limited sales or use tax on the lump sum charge. The retailer must pay limited sales or use tax on the parts at the time of purchase.
   2. (2) If the retailer separates the charge to the customer into one charge for the home and a separate charge for the additional parts, the retailer must collect limited sales tax on the amount charged for the parts. The retailer may issue a resale certificate in lieu of tax when purchasing the parts.
   3. (3) If a third party sells and installs the items, the installer's sales tax responsibilities are determined by whether the contract separates charges for materials from charges for labor. See paragraphs (1) and (2) of this subsection.

Source Note:The provisions of this §3.306 adopted to be effective January 1, 1976; amended to be effective October 7, 1980, 5 TexReg 3842; amended to be effective October 13, 1982, 7 TexReg 3497; amended to be effective May 8, 2006, 31 TexReg 3717.