A provision buried in H0757 significantly reduces the sales tax burden on manufactured home sales—but only if you understand when it takes effect and how it applies.
Most Vermont retail owners selling manufactured homes, modular housing, or mobile homes don't yet realize that a major tax change is coming their way. Buried in H0757—An act relating to manufactured homes and limited equity cooperatives—is a provision that substantially increases the existing sales-and-use-tax exemption on these sales. Understanding it now means you can plan accordingly.
Vermont currently exempts 40% of receipts from sales and use tax on manufactured home, modular housing, and mobile home sales. Under Section 6 of H0757 (found on Page 10), that exemption jumps to 90% of receipts, effective January 1, 2028.
In practical terms: today, if you sell a manufactured home for $100,000, you collect sales tax on $60,000 of that sale (the non-exempt portion), resulting in an effective tax rate of 3.6%. Starting January 1, 2028, you'll collect sales tax on only $10,000 of that same sale, bringing the effective rate down to 0.6%.
That's a substantial reduction in the tax you remit to the state on each transaction.
If your business sells manufactured homes, modular homes, or mobile homes as personal property, this applies to you. The exemption covers the sale of the dwelling unit itself. It does not apply to land sales or to sales of other goods and services bundled separately with the home.
Dealers in other retail sectors are not affected by this provision.
The change is not effective immediately. According to Section 9(2) on Page 12 of H0757, this exemption increase takes effect on January 1, 2028. That gives you roughly three years to adjust pricing models, accounting systems, and customer communications if needed.
Until that date, the current 40% exemption remains in place.
If you sell manufactured homes, mark your calendar for January 1, 2028. Review your point-of-sale system and accounting procedures to ensure they're set up to apply the new 90% exemption correctly when the date arrives. Confirm with your accountant or tax advisor how this change flows through your tax filings and whether it affects pricing strategy or customer quotes.
If you're unsure whether this provision applies to your specific business model—for example, if you sell homes bundled with land or services—consult the Vermont Department of Taxes or a tax professional to clarify the scope of the exemption as it applies to your transactions.
The reduction in effective tax rate is real and material. Preparing now ensures you capture the benefit smoothly when it becomes law.
This summary reflects H0757, Section 6 (Page 10) and Section 9(2) (Page 12). For the full bill text or tax guidance specific to your business, consult the Vermont General Assembly website or the Vermont Department of Taxes.