taxes

Garage Sales and Occasional Sales

If you have a garage sale or sell personal items through the internet or an advertisement, you may need to obtain a Texas Sales and Use Tax Permit and collect sales tax.

Texas sales tax is normally due when you sell tangible personal property. Examples include clothing, shoes, CDs, DVDs, books, furniture, bicycles, toys and other personal items typically sold at garage sales.

Depending on how many sales you make a year or the dollar amount of those sales, the occasional sales exemption could apply.

Occasional Sales by Individuals

If you occasionally sell personal items, you may qualify for the "occasional sales" exemption. If you qualify, you do not need a sales tax permit, and you do not collect tax on those sales.

You can qualify for an occasional sales exemption if you meet either of these requirements:

  • You only sell one or two taxable items during any 12-month period (not just January-December) – the price of the items does not matter.
    • Example – you sell a piano for $400 and a bicycle for $200 at a garage sale in a 12-month period. You later sell your used lawn mower for $100 before the end of that 12-month period. Selling the lawn mower is a third sale, so you must get a sales tax permit and collect and pay sales tax on the lawn mower.
  • You sell in a calendar year (January-December) items originally bought for you or your family members for personal use, and you don’t make more than $3,000 on those sales during the calendar year. You can sell as many items as you want to as long as your total sales are $3,000 or less during a calendar year.
    • Example – you sell housewares at a garage sale in May and make $1,000. In August, you sell your used bicycle to a neighbor for $200. In December, you sell your TV to a friend for $500. That makes more than two sales in a calendar year, but the total sales amount is $3,000 or less, and all the items were originally bought for your use or your family’s personal use, so the exemption still applies.
    • If, however, you sell more taxable items after you reach the $3,000 limit, and you made more than two sales, you are considered engaged in business, and the exemption does not apply. You must get a sales tax permit and collect tax on all later sales of taxable items, beginning with the first sale after you reached the $3,000 limit.

You do not qualify for the occasional sales exemption if any of these conditions apply:

  • You have, or are required to have, a Texas Sales and Use Tax Permit (or a similar permit from another state).
  • You are engaged in business selling taxable items (including artists or craftsmen who make items for sale).
  • You buy, barter or trade taxable items to resell.

Group Sales

Sales made by groups, such as student or church groups that collect items to sell at a garage sale, neighborhood flea market or miscellaneous secondhand articles typically sold to raise money for a charity or a special event, do not qualify for this type of occasional sales exemption; it applies only to individuals.

In these situations, sellers must have a sales tax permit and collect sales tax, unless another exemption applies, such as sales by an exempt organization.

Community Events

If you are in the business of selling, leasing or renting taxable items, you do not qualify for the occasional sales exemption. A person who buys or otherwise gets items from others to sell (including barters, trades and donated items) or a person who regularly sells taxable items (including artists or craftsmen who make items to sell) is engaged in business.

If you are required to pay a fee or commission to participate in events such as flea markets, arts and crafts shows, or other similar “community-wide” type events coordinated or produced by a third party, the occasional sales exemption does not apply. You can review Publication 96-211, Fairs, Festivals, Markets and Shows for more information on community-wide events.

You are required to have a Texas sales tax permit and collect tax on all sales of taxable items, even if you sell your personal items. In other words, if you are engaged in the business of making taxable sales, you cannot claim the “occasional sales” exemption.

Occasional Sales Exemption

Use this chart to see if you qualify for the occasional sales exemption:

Occasional Sales Exemptions
If… and… then…
you have a sales tax permit you sell taxable items collect sales tax (unless another exemption applies to the sale).
you, as an individual or a business, do not have, and are not required to have, a sales tax permit you make two or fewer sales per consecutive 12-month period (regardless of the dollar amount of the sales)
  • the $3,000 limit does not apply; and
  • you are not required to collect sales tax.
you are an individual who does not have, and is not required to have, a sales tax permit
  • you sell taxable items during a calendar year that were originally bought for your personal use (or for use by a member of your family); and
  • the total amount of money received for those sales (no matter how many sales) does not exceed $3,000 during the calendar year
you are not required to collect sales tax.

Additional Resources

94-437
(09/2020)