Management of Clayton Homes in Chino Valley, Arizona has asked the town council for a break on sales taxes, stating that what is now the highest rate in the region is hurting business.

“My own (company’s) sister stores are my biggest competitors,” said Dave Rowe, general manager of Chino Valley’s Clayton Homes. “Everyone’s shopping the Internet these days. My own stores are using the tax rate against me.”

Clayton Homes also has locations in Mesa and Glendale, and is a vertically integrated company.

As many Daily Business News readers know, the parent company is the nation’s largest producer and retailer of manufactured housing in the United States.

 

According to CVR News, Chino Valley receives almost all of its funding from a 4 percent sales tax, which is the highest in Yavapai County. Rowe asked the Council to consider lowering it to 3 or 2 percent, just for manufactured homes.

Clayton Homes is reportedly the main manufactured home retail business in Chino Valley, since it bought out Busbee Homes a couple of years ago.

“The Mesa and Glendale locations are actually selling more homes up here because it’s cheaper than we can up here,” said Rowe.

Rowe also told the council that if they continued to lose business to other Clayton stores, then it would be hard for him to justify staying open.

“We’re not bringing this up, using this as a threatening tactic,” said Rowe.

“But my corporation is sitting there going, ‘Our Glendale location, and our Mesa location are selling into Chino Valley and surrounding areas, then why do we need a location there?’”

Rowe was challenged by the council on this point.

“If you’re overhead costs are cheaper than either Mesa or Glendale, couldn’t you offer homes for less than they could?” asked councilmember Lon Tuner. “That could put you on more equal footing.”

CVR News reports that Mesa has a 1.75 percent sales tax rate, Glendale has a 2.90 percent sales tax rate. Both are considerably lower than Chino Valley’s 4 percent.

Clayton has one other competitor in the region, Best Buy Homes located in Prescott Valley. Rowe told the council that with the backing of Berkshire Hathaway, Best Buy Homes is not a big competitor.

“Best Buy is not really my competition, my own stores down in the Phoenix area are, and they’re using the sales tax against us,” said Rowe.

Town finance director Joe Duffy told the council that the town currently offers a lower sales tax rate to one other industry. Rental properties.

Duffy told the council that it is likely that by lowering the sales tax rate for manufactured homes, the town could recoup some of the lower revenue if Clayton Homes increases the number of homes it sells.

“We collected $93,000 in sales tax revenue from manufactured homes in 2014, and $111,000 in 2015,” said Duffy. “If the Council lowered the rate to 3 percent, it would mean about $27,750 less in revenue this year based on current estimates,” said Duffy.

Clayton Homes is part of Berkshire-Hathaway, one of the industry-connected stocks monitored each business day, here on the, the Daily Business News.  For the most recent closing numbers on all MH industry-connected tracked stocks, please click here. ##

(Image credits are as shown above.)

Submitted by RC Williams to the Daily Business News for MHProNews.