Sales tax change could have 'huge impact' on mobile home buyers
Posted January 2, 2014 6:24 p.m. EST
Updated January 2, 2014 7:19 p.m. EST
Fayetteville, N.C. — All it takes is a drive through rural North Carolina to see that mobile homes are a big part of the state’s landscape. Census figures show North Carolina ranks fifth in the nation for the percentage of residents who live in them. But this year, buyers might come away with sticker shock, thanks to the impact of a higher sales tax.
The change was part of the General Assembly's tax overhaul, passed last year. It lowers personal and corporate income tax rates but boosts sales taxes on a number of goods and services, including manufactured homes.
Mobile homes have long been popular among low-income earners, and critics say they're the ones who will be hurt the most.
The owners of Vision Homes in Fayetteville say a four-bedroom double-wide costs about $80,000. Before the new year, buyers would have paid no more than $600 in state sales taxes on it. Now, the amount jumps to $3,800.
Before the tax overhaul, the state capped mobile home sales taxes at $300 for a single-wide and $600 for a double-wide. Under the new law, all caps are off.
“It’s a huge impact,” said Carla Emmons, with Vision Homes. “I think it’s going to have a terrible impact on what I consider the blue-collar worker.”
The change could also impact her business. A higher tax charge could mean fewer people opting to go mobile.
“How do we know what the next year is going to hold, because $2,000 to $3,000 is a lot of money for somebody just to wake up and say, ‘Sure, I’ll pay that extra,’” Emmons said.
Potential buyer Samuel Jones said the new law won’t deter him.
“It doesn’t steer me away. I just have to make sure this is what I want,” he said.
Manufactured homes also include modular homes. They were taxed at 2.5 percent and had no caps. They, too, are now taxed at 4.75 percent. That is the state's general sales tax rate, so the new law aims to simplify things and apply that rate across the board.