Paying tax on a yard sale

springfield area, MO(Zone 5b)

I just read a piece in our local town website where the mayor posted updates on last night's city council meeting. The city voted to repeal requiriments for city residents to obtain a free yard sale permit. (there was no charge for it, and the city was tired of spending efforts on something they werent' making any money on). However, the mayor noted that in the city, sales tax was required to be paid by anyone who had a yard sale and that the city was going to 'start' enforcing this.
I guess I had the idea that tax was collected out of funds that were PROFIT. So if I bought a toy for 10$ and sold it for $1, where did I MAKE money, and why do I owe tax?????
And does anyone see any way OUT of this or how to get around it?

How nuts is THAT!?
I am furious!

Hammond, LA(Zone 8b)

Tell them you didn't "sell" the item. Tell them that you gave the item away, and was given a donation from the buyer. *I don't now if it will work, but it's worth a try.* That, or thell them you lost money on the yard sale and they owe YOU money.

Dublin, CA(Zone 9a)

I don't know how big your town is, but I can't imagine they're going to send city workers around on weekends to find out who all's having yard sales and enforce the collection of tax. If they were still requiring permits then at least they'd know who was having them and it could be easier to follow up.

I like jlp's approach...the other option is just keep really bad records of what all you sold for how much--since they're not requiring permits to have a yard sale, there's really not much they can do to force you to keep good records and things get so busy during those sales there's no way you could possibly keep track of every little thing.

As a side note, for sales tax it doesn't matter how much profit you're making, it's always a percentage of what you sell the item for. If you were paying income tax on it then you could look at at the profit (although you might have to account for depreciation, etc which just gets way too complicated!). But sales tax is always just based on the sales price. Stores charge you the sales tax on top of the price of the item, so if it turns out they really are going to enforce this rule then you can just calculate the sales tax and add that on to the transaction when people pay up at the end. That way you still come out even. Or if that's too hard or you're worried about losing sales because people won't want to pay tax, boost your asking prices to cover the sales tax you'll have to pay on each item--yard sale prices are not at all standardized in the first place so I doubt people would notice that you purposely tacked a bit on to cover the tax (plus they'll probably all be doing the same thing!)

Hammond, LA(Zone 8b)

Tell them you made three dollars.

springfield area, MO(Zone 5b)

LOL $3!!

Yes I live in a 'small' town and they really will enforce this if they can. First they need the money, secondly we have a new mayor now, and he is bent on doing things by the book.
Third, a bunch of people showed up at the council meeting asking why the cops were giving out so many petty tickets lately. Things like not using a blinker when turning, and illegal parking. OK I realize those are laws, but still, I don't see any public safety reason for them, just a quick way for the city to make a buck when they 'feel' like enforcing them.
Now that tax revenue is down, they are out stalking folks for anything they can find.

Mayor says well if you lived in a big city like St Louis they would ticket you for parking like that! Well duh, that is why I don't live in a big city LOL I moved to a small town area where they traffic is sparse, people know each other and have common sense.... But I guess not any more!

I know there are 'real' crimes around here needing solved, and such, but since that doesn't make money, yes they will enforce petty stuff... besides that it keeps them looking busy, so they don't have to do anything .... like work :)

Hammond, LA(Zone 8b)

Frilly - I am in law enforcement and have seen the same trend in my city. Tax revenue is down, so more "non-threatening" crimes are being enforced.

I am sure that the police are not choosing to write parking tickets and do "yard-sale investigations". Cops are people too, and yeah I know, some of them suck. MOST of us do not like giving tickets of any kind. We don't personally make money off the tickets, so why write more tickets than normal?

And it is work to write tickets. Trust me.

I still say to tell them you made $3.00. And if they are dead set on proving how much moeny you make, tell them to work the cash register. :P

Houston, United States(Zone 9b)

I've got an easy out for you! Sell on Craigslist. I personally don't have time to sit and hold a garage sale to make what would likely be 3 bucks :(. I remember holding them annually growing up, such a pain to set it all up and then sit and wait etc.

Sales for items like we sold at garage sales on Craigslist I tell you resale HIGHER online. I'm sure you've seen the site (?) so give it a try. Pretty hard to monitor online sales.

springfield area, MO(Zone 5b)

Yes I know of Cragis List, but the closest city to me is one hour away, so I don't think I would have any luck with that.
Besides I HATE Craig's List.
Just hate it.
Last year I had a two day sale, my mom helped me and we made about $400.
I stay at home, so it is not that big of a deal to do once a year. I also sold some extra plants.

Citra, FL(Zone 9a)

Ok, isn't there some basic constitutional issue with being double taxed? If it is something you bought and originally paid sales tax on it, then the tax has been paid. I used to buy and sell for a profit and had a resale permit. When shopping at retail establishments or with wholesalers, things I bought for resale, I didn't pay tax on, because I had to pay tax when I sold it. Things I bought for personal use, I did pay tax on up front.

I hope your town residents raise a ruckus, Boston Tea Party style!

Craigslist has so many scammers, and if you live out it's almost useless.

San Antonio, TX(Zone 8b)

Sales tax is one of the "cash cows" various government entities use when scrounging for $ - and they do that on many levels and virtually without letup. Each state can set a schedule, as can the various counties and cities, and overlaps can often occur. We taxpayers have few defenses, but we can try to throw monkey-wrenches by scanning the codes for conflicts and then raise loud and vigorous complaints. Won't always work - just because the state exempts something, for example, doesn't mean the city has to do so as well.

Another ploy some of us might try: in states with sales tax holidays, schedule your sale for the same weekend.

Taxing used items again is highway robbery IMO. Yuska

Lake Jackson, TX

I have never heard of a sales tax on used garage sale stuff .if some one was asking for sale tax ..I would say wheres your tax cert.from the state ?..(that means you have a account with the state ) You are not allowed to have but one G .sale every 3 months ..NOW if you had a steady business of giving a sale every week then you have a bussiness,you will have to have a tax cert.

Citra, FL(Zone 9a)

Each municipality sets its own terms regarding how many sales you can have in a certain period; one town was every six weeks, another once a month....but what if you are moving and have a month long sale? It's nonsense all the way. Double taxation, to sell what you own and paid tax for in the first place then pay again. Nope, not right.

I don't think anyone at a sale would charge, just have to take it off the top. There is a woman locally who sells for other people - she has to charge sales tax because she is performing a service.

Clinton, CT(Zone 6b)

Friend of mine in Vegas back in the 90s was in some financial difficulty and had a garage sale or two every month. During one of them she looked up and there was a police helicopter. Yup...they were keeping track. You were only allowed so many a year (3 or 4 a year) I think. Squad cars arrived and shut her down.

Citra, FL(Zone 9a)

Seems with the economy the way it is, garage sales are going to be a side income for lots of folks as they reduce their possessions to add to the family coffers.

springfield area, MO(Zone 5b)

yeah, well you can only reduce til its gone? Stuff doesn't reproduce you know.
Besides that, even if I sold EVERYTHING in my house, I would LOSE money, because you never get as much out of something than what you paid for it when you bought it.

Citra, FL(Zone 9a)

That's usually true.
I almost exclusively shop thrift or yard sales except for food/consumables and undergarments. And plants. Plants are a problem.

smalltown, IL

New Government Policy Imposes Strict Standards on Garage Sales Nationwide

Friday, September 18, 2009
By Diane Macedo

* Print
* ShareThis

CPSC.gov

The Easy-Bake Oven, made for ages 8 & up, was recalled because if kids put their fingers in the slot they could get stuck or burn themselves.

Americans who slap $1 pricetags on their used possessions at garage sales or bazaar events risk being slapped with fines of up to $15 million, thanks to a new government campaign.

The "Resale Round-up," launched by the Consumer Product Safety Commission, enforces new limits on lead in children's products and makes it illegal to sell any items that don't meet those limits or have been recalled for any other reason.

The strict standards were set in the 2008 Consumer Product Safety Improvement Act after a series of high-profile recalls of Chinese-made toys.

The standards were originally interpreted to apply only to new products, but now the CPSC says they apply to used items as well.

"Those who resell recalled children's products are not only breaking the law, they are putting children's lives at risk,” said CPSC Chairman Inez Tenenbaum. "Resale stores should make safety their business and check for recalled products and hazards to children."

In order to comply, stores, flea markets, charities and individuals selling used goods — in person or online — are expected to consult the commission's 24-page Handbook for Resale Stores and Product Resellers (pdf) and its Web site for a breakdown of what they can't sell.

Violators caught selling anything on the enormous list face fines of up to $100,000 per infraction and up to $15 million for a related series of infractions.

CPSC spokesman Scott Wolfson says the fines are intended for large companies with serious infractions.

"CPSC is an agency that has used its penalty powers over its 30-year history against companies," Wolfson told FOXNews.com. "CPSC is not seeking to pursue penalties against individuals hosting a garage sale or yard sale, we are encouraging them to take the right steps to not resell recalled products."

But FOX News Legal Analyst Bob Massi says the law makes no distinction for families and small resellers.

"Most people having garage sales at this point don't have much anyway, so to have a fine levied against them is tantamount to harassment," Massi told FOXNews.com. "And if you or I asked 100 people about this, they would never even know the law exists."

Don Mays, senior director of product safety planning at the publisher of Consumer Reports, says the hefty penalties are necessary to have an impact.

"The former civil penalty limit of $1.87 million was too small to be an effective deterrent to large companies who flagrantly violated the law," Mays told FOXNews.com. "Mattel and its subsidiary Fisher-Price, for example, recently paid a $2.3 million penalty for importing about 2 million toys that violated the CPSC 30-year-old lead paint ban — that amounts to just over one dollar per toy."

When FOXNews.com came to his garage sale, vendor Ilan Broochian said the same was not the case for his household.

"You fine me in today's economy $1000 dollars and that would hurt me," Broochian said. "So, just make the fine bigger to them; don't take their responsibility and put it on me."

VIDEO: FOXNews.com Visits the Broochians' Garage Sale

"It is scary to think that there could be such hefty fines imposed on unsuspecting households," another garage sale organizer, Patti Lombardi, told FOXNews.com. "I think I speak for many people when I say that the government spends too much time interfering in the individual citizen's personal life and this is almost bordering on the ridiculous ... what if it opens up a Pandora's box of litigation brought by the purchasers of items at garage sales?"

Wolfson says the law may be tough, but it's necessary to keep consumers — and especially children — safe.

"Many children have choked and died on small parts that have broken off or been incorporated into toys," Wolfson told FOXNews.com.

He noted that dozens of children have swallowed powerful magnets that fell out of magnetic toys and have needed open-chest surgery as result.

"We don’t make haphazard decisions about risks here at CPSC," he said. "So much of what we do here and what this new law aims to achieve is looking at issues where children have been hurt previously."

But critics say the Resale Round-up is just another example of the government overstepping its boundaries.

"It's absurd when nanny-state bureaucrats want to regulate things we buy at mom-and-pop shops or second-hand stores," Wes Benedict, executive director of the Libertarian National Committee, told FOXNews.com. "Consumer product safety is best left to a free market where suppliers can compete based on reputation and track records. American grown-ups aren't stupid, and they know they need to be careful about what they buy for their children from complete strangers at no-name stores."

Toy industry expert and TimetoPlayMag.com content director Chris Byrne says the law is well-intended, but it may be taking things too far.

"The overall law I think is awfully broad and doesn't take all of the science into effect," he told FOXNews.com. "You can't consume lead by touching something and putting your finger in your mouth. That's not how it happens. The lead has to be injested and has to be injested in particles small enough to enter the bloodstream or on a material in the stomach where it will be digested in the stomach acids and go into the bloodstream — and that's never happened from toys."

In cases where toys have injured children, Byrne said the injuries often resulted from misusing the product.

"In virtually all the cases of magnet swallowing these were things that were swallowed by kids that were below the age grade, or in the case of the older kids they were pretending to have tongue piercings. By banning magnets, you're not going to stop that level of play," Byrne said.

PHOTOS: Controversial Recalls

"When you bring something into your home there should be an assumption of risk," he added. "And if you have a child under 3 and you bring in something age graded for 5 and up – who's responsibility is that? I think it's the parents'."

And toys aren't the only issue. Byrne said the biggest challenge now is for all school products.

"If I've got a wirebound notebook, the lead content in that wire binding is now under scrutiny, even though the chance of ingesting lead in any amount from something like that is virtually non-existent," he said. "It's a level of political grandstanding to say 'we're taking care of everything,' but the science clearly demonstrates that the transference is not really possible — I mean, a child who eats the wire binding from a notebook is going to have significantly worse health problems than lead."

The Resale Round-up has led some resale stores and charities to stop accepting children's goods altogether, something President and CEO of Goodwill Industries Jim Gibbons said has some clients concerned.

"I saw on blogs, consumers saying, 'Don't take away my ability to shop at Goodwill for children's clothing – this is how I clothe my kids and get them to school,'" Gibbons told FOXNews.com.

The problem, he said, is every not-for-profit and 'mom and pop thrift shop' has different capabilities and resources and a broad-brush approach may leave them unable to provide services.

Still, Gibson said, Goodwill generally has been able to continue serving its communities, and he believes CPSC is working hard to take a law "that was probably written in haste" and implement it in an effective manner.

"They're really committed to common-sense approaches and working in good faith with at least the social services kind of thrift segment," he said. "And we've been working very proactively with them to make sure that folks at Goodwill are educated, have access to the CPSC guidelines and are making themselves available for as much training as CPSC can provide as they try to figure out how to work with this legislation."

springfield area, MO(Zone 5b)

WOW.

I guess toys at my yard sale will be free from now on :)

Oh, and notebooks with wire binders. and let's see what else.........oh, just about everything that has metal on it, or is painted.
Well, that is just about everything!

sounds like Uncle Sam has too much time on his hands, and too much of OUR money in his pocket.
:(

Citra, FL(Zone 9a)

You might get in trouble for that, too.
Seems people are protecting their jobs. Government isn't an entity without people.

Post a Reply to this Thread

Please or register to post.

Upload Images to your reply

    You may upload up to 5 images
    BACK TO TOP