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North Dakota to Tax Sales and Use of Manufactured Homes


 Growth in NW North Dakota.

A new law on the North Dakota books taxes the sales and use of manufactured homes. This coincides with a population explosion unprecedented in North Dakota -- a state that is no stranger to boom times. Coincidence? Or savvy legislation designed to increase tax revenue?

North Dakota grew more than any other state last year. The United States Census Bureau puts North Dakota's 2012 population at just under 700,000. In 2000, that number was 642,200. Furthermore, current population estimates "don't include at least 24,000 workers who live in temporary camps set up mainly for migrant oil workers," according to Rod Backman, chairman of the North Dakota Census Committee. (Star Tribune).

The cause of all this growth is oil -- specifically oil being drawn out of the Bakken Formation in the Williston Basin. North Dakota is now second only to Texas in U.S. oil production.

Money in the Pocket, No Roof for the Head

The oil boom has caused growing pains in Williston, the town closest to the oil fields. Crime has increased and roads have deteriorated. Yet perhaps the biggest problem is the lack of housing. Back in the fall of 2011, CNN reported that more than 6,000 jobs seekers from all over the country were "pulling in fat paychecks" but were also homeless because "oil companies and other developers haven't been able to build housing units fast enough."

Chip  Brown, writing in the New York Times Magazine, describes "the shock of coming around a bend and suddenly finding … dozens of neatly ranked trailers in a 'man camp'… ." Benjamin Lukes, a worker staying in one of Halliburton's man camps, dreams of a place he can live with his wife and children. The apartment suite opening up for $6,700 a month is out of the question.

Local government is doing its best to keep pace with the growth. Ward Koeser, president of the Williston City Commission, explains, "We have 800 to 900 new houses coming onto the city tax rolls by the end of the summer." He's pleased about the growth, but says that "it's just happening too fast."

Rod Backman believes the growth will continue, even if the drilling slows down. He noted that "when you start factoring in the permanent jobs, the expectation is that we are going to continue to see job growth and population growth."

And that means a continued need for housing. Since even the most efficient builders can't build a house in a day, and since man camps and hotel rooms have limited appeal, manufactured homes have a foot in the market.

Beginning July 1, 2013, anyone who purchases a manufactured home in North Dakota, or brings one there from another state, will have to pay sales or use tax.

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photo credit: NASA Goddard Photo and Video via photopin cc


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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.