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.
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 do not qualify for the occasional sales exemption if any of these conditions apply:
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.
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.
Use this chart to see if you qualify for the occasional sales exemption:
|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)
|you are an individual who does not have, and is not required to have, a sales tax permit
|you are not required to collect sales tax.