For years the Shelby County Board has talked about finding a way to make property tax on mobile and manufactured homes equitable. The Illinois General Assembly approved Public Act 96-1477 which went into effect on January 1, 2011 and changes the tax code on mobile and manufactured homes.
“I think this law is long overdue,” said County Board member Robert “Rob” Amling. “The people in both types of homes use the same services and yet with that catch in the law that existed before mobile home and manufactured homes paid much less taxes.”
Amling said many of his constituents complained about the unfairness of this tax law. He said he had a friend who built a stick-built home and complained that he would be paying as much as $3,000 in property tax, while a manufactured home near his was paying $5-600 in taxes.
The new tax code (Public Act 96-1477 and is available on the General Assembly’s web site) and for purposes of the Act “mobile home” and “manufactured home” are synonymous.
The Act reads that a mobile home or manufactured home taxed under the Mobile Home Local Services Tax or as it is called the Privileged tax on January 1, 2011, continues to be taxed under that Act until the home is 1) sold, 2) transferred, or 3) relocated to another parcel outside a mobile home park. If any of these three events occur, then the mobile or manufactured home must be assessed as real property.
The new tax code goes on to say a mobile or manufactured home outside a mobile home park assessed as real property on January 1, 2011, continues to be assessed as real property after January 1, 2011. If a mobile or manufactured home is assessed as real property on January 1, 2011, and subsequently is moved to a mobile home park, it no longer is assessed as real property; instead, it is taxed under the Mobile Home Local Services Tax Act.
Shelby County Supervisor of Assessments Diana Wagner said the most important aspect of this new tax code is the fact that now mobile and manufactured homes not in mobile home parks will be taxed as real property.
“Beginning last January 1, 2011, a mobile or manufactured home installed on private property outside a mobile home park must be installed according to the manufacturer’s instructions. In addition, that mobile or manufactured home must be classified, assessed, and taxed as real property.”
Wagner said it is also important to remember a mobile or manufactured home inside a mobile park is taxed as before under the Mobile Home Local Services Tax Act or as referred to as the Privileged Tax.
Illinois State Senator Dale Righter (R-Mattoon) said he supported this legislation but with some reservations.
“This is an issue of equity,” said Righter. “This legislation had been proposed before and I resisted because I would only support it if the people in these mobile and manufactured homes were grandfathered in.”
B and B Homes, Inc. in Effingham has been selling mobile and manufactured homes for many years. The sales manager Heather Mumma said she believes this new tax code will actually help their sales.
She feels that people are really looking harder at mobile and manufactured homes because of the lower initial construction costs, under-roof construction and timeliness.
“In the past, even with all the above-mentioned pluses, many towns may choose to zone our quality-built homes out of their jurisdiction due to losing the tax dollars,” said Mumma. “With the new, equal taxation, towns and villages will need to rethink their position and make equal and fair zoning requirements that will specify what amenities they require for ALL homes; not just those built in a factory. In this way, they can provide a way for those folks living in their town or village to build a quality home that both the homeowner and the city can be proud of!”
Mumma also feels that with this new tax code folks will be able to obtain financing for a manufactured home easier.
“The other major issue that will be alleviated by the new tax laws is the lack of good financing options for a factory-built home,” continued Mumma. “In the past, due to the “privilege” taxation, many good, hardworking people couldn’t obtain a fixed rate loan. Now, there are 100 percent financing options open and available with up to a 30 year fixed rate.”