Barbour says lawmakers to return to consider tax break

Published 4:35 pm Friday, September 1, 2006

Gov. Haley Barbour says he will bring lawmakers back to Jackson to act on a tax break on modular housing, a step designed to help Gulf Coast homeowners rebuild.

The proposal died during a special session last week.

The measure would have reduced the tax on modular housing from 7 percent to 3 percent, bringing it in line with taxes on standard-built homes and mobile homes. The bill died in a House committee.

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Barbour has said that modular housing, built in large pieces then shipped to homesites and put together, could offer a more affordable alternative to other housing and a safer alternative to mobile homes to coastal residents.

Barbour said the proposed tax cut could save homeowners $4,000 to $6,000, money they could use on furniture or to replace other things lost in Hurricane Katrina.

“I’m going to bring the Legislature back, and I hope the House leadership comes to its senses,” Barbour said in a meeting Wednesday with The Sun Herald newspaper.

He would not specify a date when he’d call another special session, but said it “probably won’t be within the next two weeks.”

House Speaker Billy McCoy said in a press statement that he plans to appoint a special subcommittee to “take an extensive look at the housing situation on the Mississippi coast.” He said that study will include “types of housing such as modular homes.”

House Ways and Means Committee Chairman Percy Watson, D-Hattiesburg, said lawmakers didn’t have enough information on what impact the cut would have on the state budget.

Barbour said a cut in modular housing taxes would not have a negative impact on the state budget, because very little modular housing had been sold before Hurricane Katrina. The state tax law doesn’t address modular housing, so it is treated as personal property, taxed at 7 percent for both material and labor.

“Anybody who finished fourth-grade math would understand that the impact to the state would be very positive, when you’re not selling any modular housing now,” Barbour said.