Do I have to collect sales tax when reselling used personal items?

Question

I bought a new dehumidifier off of Amazon. I used it in my apartment for a month but don't need it anymore. I want to sell it used, at a price lower than the price I bought it for. I listed the item on Facebook Marketplace. Do I need to charge the buyer sales tax and then pay that tax to the government? Is there anything else I need to do? I live in Norwalk, Connecticut.

stannius · Accepted Answer

Yard sales and the occasional Craigslist sale are considered "casual sales" so generally are not taxable.

There are, of course, exceptions, and laws vary by state.

Source: https://www.avalara.com/us/en/blog/2015/04/sales-tax-reporting-on-casual-sales.html

MonkeyZeus · Answer

tl;dr

No, not in your situation of "selling for less than purchased".

From https://tax.findlaw.com/federal-taxes/do-you-need-to-report-your-online-sales-to-the-irs.html

Online 'Garage Sales'
  
  Online sales of personal, used items do not generally have to be reported. Selling your old bicycle on Craigslist is an example of these types of sales. Losses on personal use property are not deductible on online sellers' tax returns. The rule of thumb is that if you used the items and then sold them for less than you bought them for, then you owe no taxes on the sale. However, if you sold an antique or collectible that had appreciated since you first acquired it, you likely would be on the hook for taxes on the profit.

Even if you did sell it for a profit then how would they be able to reliably verify short of you coming forth voluntarily.

Additionally, it would be a very awkward conversation to tell the buyer "Hey, I need to charge you tax on this since I am making a profit." In general you would just charge enough to cover the tax and pay it out of pocket if you were to honestly report the capital gains.

Do I have to collect sales tax when reselling used personal items?

2 Answers

Add your own answers!

Ask a Question