Do I have to worry about charging sales tax on my garage sale?
If you live in most states, and you only have one sale a year, no.
The reason is that you're making an occasional sale (aka a casual sale). These types of sales are not taxable for the simple reason that they're not taxable retail sales. You're not a retailer. As long as you're not a retailer in the eyes of the state where you're conducting the sale, then you don't have to worry about charging (and remitting) sales tax.
Why aren't you a retailer?
1. You're only doing this once a year. More than that and some states start paying attention.
2. Your signage consists of a crummy piece of poster board that your kid made and hung with duct tape on the stop sign at the corner. And you've got a couple of balloons in the yard. The balloons don't even have helium - cheapskate. No self-respecting retailer would do that.
3. Your competitors don't know about you, other than that jerk down the street who also decided to have HIS garage sale this weekend. Do the real "antique" dealers in the area care about you? No, of course not.
4. There's no real business associated with this event. You're doing it in your front yard. And we're not talking about your son's lawn mowing business.
4. You didn't buy all that junk to resell. You bought it to use. I'm not talking about whether or not you did use the stuff. You intended to use it.
So you're off the hook. In most states, you don't have to charge sales tax.
What about anything you buy at a garage sale? Do you owe use tax?
Again, generally no. There is no taxable retail sale because there is no retailer. If there is no taxable retail sale, then there's no event to charge sales tax on, and there's no event that use tax covers either. So no use tax is owed by the buyer.
Note, if you're in Colorado, forget about everything I just said. In fact, just ignore this whole article. Sorry.
And if someone is selling a car, truck, boat or snowmobile at their garage sale, the rules are different.
For the rest of you, yay! Have fun. And call me if you see anything that looks like it'll do well on Antiques Roadshow and is waaayyyy under-priced.
The Sales Tax Guy
See the disclaimer - this is for education only. Research these issues thoroughly before making decisions. The rules do vary from state to state.
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