What You Need To Know About Garage Sale Taxes in New York
Selling your belongings at a garage sale is a fantastic way to declutter while pocketing some extra cash, but New York may want to take a cut of what you make.
Before you start setting up your next garage sale, you'll want to know what garage sale items are taxable, how to report your sales, and what exemptions might be available.
Does a Person Need To Pay Taxes for a Garage Sale in NY?
Maybe, but probably not. According to the New York State Department of Taxation and Finance, any individual or business that is engaged in making any sort of taxable sales in New York State is required to register for a sales tax permit and then collect and remit sales tax and yes, this includes people selling their things at garage sales. However, not all garage sales are subject to New York sales tax. Whether you need to collect and pay tax on your garage sale earnings depends on what items you're selling, how much you're selling various items for, and how often you're holding a garage sale.
What Garage Sale Items Are Taxable in New York?
If you're selling brand new things that you bought for the sole purpose of reselling them or if you're a habitual garage sale holder, you're most likely responsible to pay taxes on your profits in New York. On the other hand, if you're selling things you don't want anymore and if you don't hold garage sales all the time, you might be exempt from paying taxes because used items are considered a casual sale and casual sales are not subject to sales tax.
Exceptions to the Garage Sale Tax Rule in New York
There are a few exceptions to the garage sale tax rules in New York. If you're selling things that generally are subject to sales tax like clothes or furniture, you might have to pay tax on those items. On the other hand, if you're selling things that aren't normally subject to sale tax like food or medicine, you might be exempt from having to pay sales tax.
How To Determine How Much Sales Tax You Owe on Garage Sale Items
If you owe taxes on your garage sale proceeds, you'll need to check with your local tax authority for the correct rate as the sales tax rate in New York varies on the county and municipality. Once you know what your rate is, multiply the total amount of your sales by the sales tax rate. Garage sale tax payments should be made to the New York State Department of Taxation and Finance.
Other Legal Things to Consider When Holding a Garage Sale in NY
Depending on where you live, you might need to get a permit or license from your local government to hold a garage sale. Also, you should ensure that anything you plan to sell is legal to sell, not illegal, pirated, or counterfeit.