Wednesday, October 4, 2006

Second Extraordinary Session of 2006

Governor Barbour has called for a Second Special Session of 2006 to begin Thursday, October 5th at noon. In the call of this Extraordinary Session (as it is legally known) the only topic to be taken up will be reducing the tax rate on modular housing. Governor Barbour reinforced that this would be the only topic and nothing else would be added to the call on a Jackson radio program this morning.

The change that is being sought by the governor would adjust the tax rate of modular homes from 7% to the 3% rate that is currently on manufactured homes or as they are better known is Mississippi, mobile homes. For a press release from the governor’s office see here.

Here is a quick primer on the difference in modular and manufactured housing.

While there are several benefits to giving this advantage to modular homes (and therefore their builders and buyers) I worry about what will happen to all of the contractors who currently build "stick-built" homes and are taxed at the normal 7% rate. The state's response to a disaster, while appropriate, may create a windfall for the major modular home producers in the country and greatly hurt the stick house building local contractors. Hopefully the legislature will include a sunset provision in whatever legislation comes out of this special session.

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