No Taxes for Garage Sales
In most states, garage or yard sales are considered “casual sales”. If the items sold were originally bought for personal use, they can be sold without charging sales tax. (But check your state and local laws as they may vary.) If the items sold originally cost more than the yard sale price, there is also no profit to report to the IRS as income.
3 responses to “No Taxes for Garage Sales”
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In Washington state, and i bet in most others, sales tax must be collected and paid by any estate sale services. if you are managing sales as a business you must collect the tax and pay it for your client . this is a good question to ask when hiring a service – if they don’t charge tax, sumpin’s not on the level!
This is true if you only purchased the items for personal use and not as a dealer (for resale). If you purchased items to resell and you liquidate the items at a garage sale you either took a loss or a profit but the sales price would then be taxable no matter if you made or lost on the transaction. This would apply to the State of Washington, check your Department of Revenue for your state.
Where I live, the largest and busiest flea market gives each seller an envelope to remit tax (State, Regional Transportation District and City) on ALL their sales. Each seller is required to turn in the envelope, with the remittance enclosed as they leave the grounds of the flea market.
There are many permanent buildings which house long-term businesses who sell new merchandise and it makes sense for them to collect and remit taxes, but for those of us clearing our garage or attic and selling all used items, I feel it is an imposition. MOST such sellers remit a small amount but do not report their total sales which are impossible to track since most transactions are in Cash.
This raises the question as to why antiques dealers and second hand stores are required to collect sales tax (in Colorado), as well as used car dealers. This means taxes are collected TWICE on each item sold.