Vermont H0757: What the Manufactured Home Tax Change Means

Most Vermont retailers don't realize that a provision in H0757—An act relating to manufactured homes and limited equity cooperatives—will substantially reduce the sales tax collected on manufactured home, modular home, and mobile home sales starting January 1, 2028.

Here's what's changing, and why it matters to your business.

The Tax Exemption Jumps to 90%

Currently, Vermont law exempts 40% of the sales price of manufactured homes, modular homes, and mobile homes from sales tax when they're sold as tangible personal property. That means dealers collect tax on 60% of the sale price, resulting in an effective tax rate of 3.6% on those transactions.

H0757, effective January 1, 2028, raises that exemption to 90% of receipts. In plain terms: only 10% of the sale price will be subject to sales tax, cutting the effective tax rate from 3.6% to 0.6%.

The change is codified in Section 6 of the bill (Page 10) and applies to sales of manufactured homes, modular homes, and mobile homes sold as tangible personal property.

Who This Affects

If your retail business sells manufactured homes, modular homes, or mobile homes, this directly impacts your point-of-sale tax collection. The exemption applies to the tangible property itself—the structure and its components—when sold as a unit.

Dealers in these products will see a significant reduction in the Vermont sales tax they remit on these transactions. The change does not affect other retail sales or services.

What You Need to Do

The effective date is January 1, 2028. That gives you time to prepare, but you should:

• Review your current sales-tax procedures for manufactured home sales
• Plan for updated point-of-sale system settings to reflect the new 90% exemption
• Confirm the change with your accountant or tax advisor, especially if you file returns manually
• Watch for Vermont Department of Taxes guidance as the effective date approaches

The shift from a 40% exemption to 90% is substantial enough that your tax liability on these sales will change meaningfully. Starting now to understand the mechanics will make the transition smoother.

The Bottom Line

H0757 is primarily a bill about manufactured housing policy and limited equity cooperatives, but this tax provision is a material change for dealers. The exemption increase—from 40% to 90%—reduces the effective sales tax rate on manufactured home sales from 3.6% to 0.6%, effective January 1, 2028.

If you sell these products, mark your calendar and begin planning now. If you're unsure whether this applies to your business, consult your tax professional or contact the Vermont Department of Taxes.

Source: H0757, Section 6 (Page 10), Section 9(2) (Page 12); Vermont Legislature.