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) Charitable or eleemosynary organization--A nonprofit organization devoting all or substantially all of its activities to the alleviation of poverty, disease, pain, and suffering by providing food, clothing, drugs, treatment, shelter, or psychological counseling directly to indigent or similarly deserving members of society with its funds derived primarily from sources other than fees or charges for its services. If the organization engages in any substantial activity other than the activities described in this section, it will not be considered as having been organized for purely public charity, and therefore, will not qualify for exemption under this provision. No part of the net earnings of the organization may inure to the benefit of any private party or individual other than as reasonable compensation for services rendered to the organization. Some examples of organizations that do not meet the requirements for exemption under this definition are fraternal organizations, lodges, fraternities, sororities, service clubs, veterans groups, mutual benefit or social groups, professional groups, trade or business groups, trade associations, medical associations, chambers of commerce, and similar organizations. Even though not organized for profit and performing services which are often charitable in nature, these types of organizations do not meet the requirements for exemption under this provision.
   2. (2) Educational organization--A nonprofit organization or governmental entity whose activities are devoted solely to systematic instruction, particularly in the commonly accepted arts, sciences, and vocations, and has a regularly scheduled curriculum, using the commonly accepted methods of teaching, a faculty of qualified instructors, and an enrolled student body or students in attendance at a place where the educational activities are regularly conducted. An organization that has activities consisting solely of presenting discussion groups, forums, panels, lectures, or other similar programs, may qualify for exemption under this provision, if the presentations provide instruction in the commonly accepted arts, sciences, and vocations. The organization will not be considered for exemption under this provision if the systematic instruction or educational classes are incidental to some other facet of the organization's activities. No part of the net earnings of the organization may inure to the benefit of any private party or individual other than as reasonable compensation for services rendered to the organization. Some examples of organizations that do not meet the requirements for exemption under this definition are professional associations, business leagues, information resource groups, research organizations, support groups, home schools, and organizations that merely disseminate information by distributing printed publications. Entities that are defined in the Education Code, §61.003, as "institutions of higher education" are recognized for exemption under this provision. Included in the definition of "institutions of higher education" are state and private universities and colleges.
   3. (3) Exempt use--A use to promote the purpose for which an exempt organization was created.
   4. (4) HUD-code manufactured home--A structure constructed on or after June 15, 1976, according to the rules of the United States Department of Housing and Urban Development, transportable in one or more sections, which in the traveling mode is eight body feet or more in width or 40 body feet or more in length, or when erected on site is 320 or more square feet, 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.
   5. (5) Manufactured home--A HUD-code manufactured home, a mobile home, or modular home. A manufactured home does not include a recreational vehicle, park model, or house trailer, as those terms are defined in this section. Further, it does not include a structure which is not designed as a residence and if constructed since June 15, 1976, would not have been required to have affixed a label or decal issued by the U.S. Department of Housing and Urban Development or by the Texas Department of Licensing and Regulations.
   6. (6) Manufacturer--Any person who constructs or assembles manufactured housing for sale, exchange, or lease-purchase within this state.
   7. (7) Mobile home--A structure constructed before June 15, 1976, transportable in one or more sections, which in the traveling mode is eight body feet or more in width or 40 body feet or more in length, or when erected on site is 320 or more square feet, 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.

   8. (8) Modular home--A dwelling constructed in one or more modules at a location other than the homesite, or constructed utilizing one or more modular components, and designed to be used as a permanent residence when the modular components or modules are transported to the homesite and joined together or erected and installed on a permanent foundation. The term includes the plumbing, heating, air-conditioning, and electrical systems. "Modular home" does not include:

      1. (A) housing constructed of sectional or panelized systems not utilizing modular components;
      2. (B) a ready-built home which is constructed so that the entire living area is contained in a single unit or section at a temporary location for the purpose of selling it and moving it to another location; or
      3. (C) any dwelling constructed in modules incorporating concrete as the predominant structural component.
   9. (9) New manufactured home--One that has not been subject to a retail sale.
   10. (10) Park model or house trailer--A structure 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 which is less than eight body feet in width and 40 body feet in length in the traveling mode, and less than 320 square feet when installed or erected on site.
   11. (11) Person--An individual, partnership, company, corporation, association, or other group, however organized.
   12. (12) Recreational vehicle--A vehicle which is self-propelled or designed to be towed by a motor vehicle but is not designed to be used as a permanent dwelling and containing plumbing, heating and electrical systems that may be operated without connection to outside utilities.
   13. (13) Religious organization--A nonprofit organization that is an organized group of people regularly meeting for the primary purpose of holding, conducting and sponsoring religious worship services, according to the rites of their sect. The organization must be able to provide evidence of an established congregation showing that there is an organized group of people regularly attending these services. An organization that supports and encourages religion as an incidental part of its overall purpose, or one whose general purpose is furthering religious work or instilling its membership with a religious understanding, will not qualify for exemption under this provision. No part of the net earnings of the organization may inure to the benefit of any private party or individual other than as reasonable compensation for services rendered to the organization. Some examples of organizations that do not meet the requirements for exemption under this definition are conventions or associations of churches, evangelistic associations, churches with membership consisting of family members only, missionary organizations, and groups who meet for the purpose of holding prayer meetings, bible study or revivals.
   14. (14) Retail sale--Sale to a consumer as opposed to a sale to a retailer for resale or for further processing and resale.
   15. (15) Retailer--Any person engaged in the business of buying for resale, selling, or exchanging manufactured homes or offering them for sale, exchange, or lease-purchase to consumers. No person will be considered a retailer unless engaged in the sale, exchange, or lease-purchase of two or more manufactured homes to consumers in any consecutive 12-month period.
   16. (16) Sales price--The total amount to be paid as set forth in the invoice or bill of sale, excluding any separately stated shipping, freight, or delivery charges from the manufacturer to the retailer or other person.
   17. (17) Use--The exercise of any right or power over a manufactured home incident to its ownership, including the sale, lease, or rental, or the incorporation of any manufactured home into real estate or into improvements on real estate.
   18. (18) Used manufactured home--One that has been subject to a retail sale.

2. (b) Imposition of tax.

   1. (1) The manufactured housing sales tax is due on all new manufactured homes sold by manufacturers on or after March 1, 1982, regardless of the date the manufacturing process was started or when the order for the home was placed.

      1. (A) Invoices dated September 1, 1983, or after, for all new manufactured homes sold by manufacturers, must set forth the amount of tax imposed at the rate of 5.0% of 65% of the sales price.
      2. (B) The manufacturer must report and pay the tax to the comptroller on or before the last day of the month following the month in which the manufactured home was sold.
      3. (C) A manufactured home is presumed to be "sold" at the time the home is sold or consigned by the manufacturer to a retailer or other person in Texas or is shipped to any point in Texas for the use and benefit of any person.
   2. (2) Any person who has purchased a mobile home for personal use and not for resale prior to March 1, 1982, and who has not paid the motor vehicle sales and use tax imposed on mobile homes prior to March 1, 1982, will be held liable for the motor vehicle sales and use tax rather than the manufactured housing sales and use tax.

3. (c) Use tax.

   1. (1) Manufactured homes purchased outside Texas.

      1. (A) New manufactured homes. Effective September 1, 1983, a use tax of 5.0% of 65% of the purchase price (equivalent to 3.25% of the purchase price) is due on a manufactured home that was purchased new outside of Texas for use, occupancy, resale or exchange in Texas. The tax is to be paid by the person to whom or for whom the home was sold, shipped or consigned. It is presumed that a manufactured home was not purchased for use or occupancy in this state if the purchaser has purchased the home at a retail sale at least one year prior to its being brought or shipped to Texas.
      2. (B) Used manufactured homes. The use tax does not apply to a manufactured home that was purchased used at a retail sale outside of Texas. Use tax does apply to used manufactured homes acquired prior to March 1, 1982, for resale by a retailer.

   2. (2) Manufactured homes purchased in Texas.

      1. (A) New manufactured homes.

         1. (i) A use tax of 5.0% of 65% of the purchase price (equivalent to 3.25% of the purchase price) is imposed on a manufactured home that was purchased new in Texas.
         2. (ii) The use tax is not due if the manufacturer has paid the sales tax on the home to this state. It will be presumed that the sales tax has been paid on a manufactured home sold, shipped or consigned by the manufacturer to a retailer or other person in Texas. The comptroller, the manufacturer, the retailer, and the user of the home may introduce evidence to establish whether or not the sales tax has been paid.
      2. (B) Used manufactured homes. The use tax does not apply to a manufactured home purchased used at retail in Texas. Use tax does apply to a used manufactured home acquired prior to March 1, 1982, for resale by a retailer.
   3. (3) A credit equal to the amount of any legally imposed sales or use tax paid to another state on a manufactured home may be taken against the use tax imposed in this state.
   4. (4) The use tax imposed is to be paid directly to the comptroller by the person to whom or for whom the home was sold, shipped or consigned. The use tax is due and payable by the last day of the month following the month after the home is sold, shipped or consigned to a person in Texas.

4. (d) Interstate sales of manufactured housing.

   1. (1) A manufacturer engaged in business in Texas but located outside this state must collect and remit to the comptroller the manufactured housing sales tax on the initial sale, shipment or consignment of a manufactured home to a retailer or other person in this state.

   2. (2) The sales tax is not imposed on a manufactured home that is sold, shipped, or consigned to a retailer or other person when a manufacturer located in Texas ships the home to a point outside this state by means of:

      1. (A) the facilities of the manufacturer; or
      2. (B) delivery by the manufacturer to a carrier for shipment under a bill of lading to a consignee at a location outside this state.

   3. (3) The sales tax is not imposed on a manufactured home that is sold to a Texas retailer for resale at retail to a resident of another state if the home is transported to and installed for occupancy on a homesite located in another state.

      1. (A) This exemption does not apply if the home is titled or registered in Texas or if the home is used for any purpose other than display prior to being transported outside of the state.
      2. (B) The manufacturer may accept an exemption certificate which has been properly completed and signed by the retailer and the consumer in compliance with subsection (e) of this section.
      3. (C) A retailer who has previously paid the sales tax imposed by this chapter to the manufacturer on a transaction exempt under this rule may claim a credit or a refund from the manufacturer.

5. (e) Exemption Certificates.

   1. (1) An exemption certificate may be issued by:

      1. (A) the United States, its unincorporated agencies or instrumentalities;
      2. (B) any incorporated agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States;
      3. (C) federal credit unions organized under 12 United States Code, §1768;
      4. (D) the State of Texas, its unincorporated agencies and instrumentalities;
      5. (E) any county, city, special district or other political subdivision of the State of Texas, and any college or university created or authorized by the State of Texas;
      6. (F) nonprofit corporations formed under the Development Corporation Act of 1979 or the Health Facilities Development Act of 1981 when purchasing items for their exclusive use and benefit. The exemption does not apply to items purchased by the corporation to be lent, sold, leased or rented;

      7. (G) any organization created for religious, educational, charitable, or eleemosynary purposes, provided that such organization must have requested and been granted exempt status by the Comptroller. In order to qualify for exempt status the organization must meet all of the following requirements:

         1. (i) An organization must be organized or formed solely to conduct one or more exempt activities. All documents necessary to prove the purpose for which an organization is formed will be considered when exempt status is sought.
         2. (ii) An organization must devote its operations exclusively to one or more exempt activities.
         3. (iii) An organization must dedicate its assets in perpetuity to one or more exempt activities.
         4. (iv) No profit or gain may pass directly or indirectly to any private shareholder or individual. All salaries or other benefits furnished officers and employees must be commensurate with the services actually rendered.

      8. (H) A resident of another state who purchases a new manufactured home from a Texas retailer for immediate transport, installation, and occupancy at a homesite located outside of Texas, provided the home:

         1. (i) has not been used by the retailer for any purpose other than display; and
         2. (ii) is not titled or registered in Texas.

   2. (2) A manufacturer who accepts an exemption certificate in good faith is relieved of the responsibility for collecting the tax as required by the Tax Code, §158.053. A retailer must submit to the manufacturer an exemption certificate which has been signed and completed by itself and the purchaser.

      1. (A) A retailer must keep a copy of the exemption certificate attached to the invoice or bill of sale transferring title to the purchaser.
      2. (B) The manufacturer must retain the original of the exemption certificate attached to the invoice or bill of sale.
   3. (3) Any person who issues an exemption certificate for a manufactured home and then uses the home for other than exempt use will be liable for the tax. The tax will be based on the selling price of the manufactured home to the person who issued the exemption certificate.

   4. (4) The exemption certificate must include:

      1. (A) names and addresses of the manufacturer, retailer, and purchaser;
      2. (B) a description of the manufactured home;
      3. (C) the address where the manufactured home will be installed;
      4. (D) reason for exemption; and
      5. (E) signatures of both the retailer and purchaser.
   5. (5) The comptroller adopts the certificate by reference. Copies are available for inspection at the office of the Texas Register or may be obtained from the Comptroller of Public Accounts, Tax Policy Division, 111 West Sixth Street, Austin, Texas 78701-2913. Copies may also be requested by calling our toll-free number 1-800-252-1382. In Austin call 463-4600. (From a Telecommunication Device for the Deaf (TDD) only, call 1-800-248-4099 toll free. In Austin, the local TDD number is 463-4621.

Source Note:The provisions of this §3.481 adopted to be effective December 6, 1996, 21 TexReg 11510.