Avalara Taxrates > Blog > Sales Tax News > Garage Sales in Texas May Create Sales Tax Obligation - Avalara

Garage Sales in Texas May Create Sales Tax Obligation

  • Jun 16, 2014 | Gail Cole

 All city garage sale in Rosebud, Texas.

Having a garage sale in Texas? Selling personal items through the newspaper, Craigslist, or an auction website like e-Bay? If so, you may be required to collect sales tax.

Texas Comptroller of Public Accounts defines tangible personal property as “property that can be seen, weighed, measured, felt or touched.” Children’s clothing outgrown? An old armchair, replaced? Books? DVDs? Depending on how many sales are made during a 12-month period, and how much money is generated from those sales, sales tax could be due.

The occasional garage or yard sale will probably not generate a sales tax obligation. “Occasional sales” are exempt in the Lone Star state. Texas law reads:

“An occasional sale of a taxable item and the storage, use, or consumption of a taxable item the sale or transfer of which to a consumer is made by an occasional sale are exempted from the taxes imposed by this chapter.”

Texans can make occasional sales without collecting sales tax. According to sales and use tax bulletin on the Window on State Government website, occasional sales include:

  • “One or two sales of taxable items, regardless of price, during any 12-month period; or
  • Sales totaling up to $3,000 in a calendar year of items that were originally acquired for personal use by the person or a family member of the person selling them.”

The bulletin states that anyone who continues to sell taxable items in Texas “after making more than two sales or reaching the $3,000 limit on sales of personal items in a calendar year” is “considered to be engaged in business.” A sales tax permit must be obtained, and sales tax must be collected on “all future sales of taxable items, beginning with the first sale after the limit is reached.”

Group sales

Sales tax must be collected when groups or organizations have sales. This applies to church groups and student organizations, unless “other exemptions apply.” It also applies when sellers pay booth fees or rent a space to participate in community-wide events.

Engaged in business in Texas? Learn how automated sales tax works.

photo credit: Big Grey Mare via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.