Found this interesting tidbit on the Texas Comptroller's site. Seems even garage sales are not totally immune from having to collect sales taxes. A new category of occasional sale, that affects the taxability of used items sold by individuals, became effective July 1, 2007, under House Bill 373.
Garage-type sales frequently fall under this new occasional sale provision. As a result of the enactment of 151.304(b)(5), sales tax is not due on the sale of items at a garage sale if:
1) the items being sold were originally acquired for personal use by the person or a family member of the person selling them; and
2) if the total receipts from sales of the individual's property in the calendar year the garage sale is made do not exceed $3,000.
This exemption applies only to the first $3,000 in total receipts that an individual earns from the sale of items that were originally acquired for personal use by the person, or a family member of the person, selling them. Once the $3,000 threshold is reached, the individual must obtain a sales tax permit and begin collecting state and local sales and use taxes beginning with the first sale after the $3,000 threshold was exceeded, and must continue to collect tax on all sales of taxable items for the remainder of the calendar year.
As with all exemptions, the seller is required to maintain records to document that the exemption applies.
Garage-type sales frequently fall under this new occasional sale provision. As a result of the enactment of 151.304(b)(5), sales tax is not due on the sale of items at a garage sale if:
1) the items being sold were originally acquired for personal use by the person or a family member of the person selling them; and
2) if the total receipts from sales of the individual's property in the calendar year the garage sale is made do not exceed $3,000.
This exemption applies only to the first $3,000 in total receipts that an individual earns from the sale of items that were originally acquired for personal use by the person, or a family member of the person, selling them. Once the $3,000 threshold is reached, the individual must obtain a sales tax permit and begin collecting state and local sales and use taxes beginning with the first sale after the $3,000 threshold was exceeded, and must continue to collect tax on all sales of taxable items for the remainder of the calendar year.
As with all exemptions, the seller is required to maintain records to document that the exemption applies.
This last sentence should make you stop and think. Who keeps those kinds of records of garage sales for a whole year anyway? My suggestion, don't have a garage sale. Donate instead and keep a receipt. Usually you can end up with a better income tax deduction anyway.
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