Texas Issues Guidance on Garage Sales And Sales Tax

Jun 18th, 2014

The Texas Comptroller recently issued guidance on how sales tax applies to garage sales.

Texas taxes sales of tangible personal property but does not tax occasional sales. Occasional sales include (1) one or two sales of taxable items during any twelve month period or (2) sales totaling up to $3,000 in a calendar year of items that the seller or the seller's family member originally acquired for personal use. Garage sales are usually occasional sales, either because the sellers only make two or fewer sales per year or because the sales total less than $3,000 and the items sold were acquired for personal use.

The occasional sales exemptions, however, do not apply to sales by groups or organizations that collect items to sell at a garage sale. They also do not apply to community-wide events produced by a third party, such as flea markets. In those situations, sellers must collect sales tax.