Sales tax and garage sales in Texas

Sales tax applies to garage sales in Texas

by Head of Research at TTR, Ken Webster

Having a garage sale in Texas? Selling personal items through the newspaper, Craigslist, or an auction website like e-Bay? You may be required to collect sales tax. The Texas Comptroller issued guidance on how sales tax applies to garage sales in 2014.

Texas taxes sales of tangible personal property but does not tax occasional sales. Occasional sales include (1) one or two sales of taxable items during any twelve month period or (2) sales totaling up to $3,000 in a calendar year of items that the seller or the seller’s family member originally acquired for personal use. Garage sales are usually occasional sales, either because the sellers only make two or fewer sales per year or because the sales total less than $3,000 and the items sold were acquired for personal use.

The occasional sales exemptions, however, do not apply to sales by groups or organizations that collect items to sell at a garage sale. They also do not apply to community-wide events produced by a third party, such as flea markets. In those situations, sellers must collect sales tax.

Sales tax must be collected when groups or organizations have sales. This applies to church groups and student organizations, unless “other exemptions apply.” It also applies when sellers pay booth fees or rent a space to participate in community-wide events.

Our Sales Tax Research Team keeps you completely up to date on current tax laws and sales tax rules across the country.

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Ken Webster is an Executive Leader and Head of Research at TTR, a subscription-based website that provides sales, use, and transaction tax answers and tax rates to thousands of companies worldwide. https://www.ttrus.com

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