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Garage Sales Print
Saturday, 06 June 2009 03:44

Question: Can I have more than two garage sales per year?
Answer: No.

Or said another way, a person can have as many garage sales per year as they want PROVIDED they have a tax permit, charge sales taxes at those sales, pay sales taxes on the sales, and are conducting the sales on property zoned for commercial use, not on a single family residential lot.

From the Texas Comptroller’s site:

A “Garage Sale” is defined as: “... a sale of short duration of used tangible personal property by a person who owned and used the property prior to sale and who paid sales tax on the property when purchased new. Sales of this nature may not exceed two a year.

“A permit and collection of the tax are required if a person holds more than two sales a year (e.g., a continuing garage sale), if a person is reselling property upon which sales tax was not originally paid, or if the person is selling new property which was not owned and used by the person prior to the sale.”

This means state law allows an individual to have two garage sales per 12 month period without applying for a sales tax permit and/or without paying sales taxes. The third garage sale the seller must pay taxes because at that point it is considered a business. (Tax Code Section 151.304 – Occassional Sales.)

Or said another way, a person can have as many garage sales per year as they want PROVIDED they have a tax permit, charge sales taxes at those sales, pay sales taxes on the sales, and are conducting the sales on property zoned for commercial use.

Neighbors Should Be Neighborly:

It has to be said that most of us have no idea of this tax law and thus might mistakenly think three or four sales of used jeans and old dishes is okay. Those should be fairly simple sales and of course a quick survey would reveal that the items for sale fit the definition of what a garage sale is about.

However, if frequent garage sales are a problem or if the contents of those sales do not fit the profile of a garage sale, then a concerned neighbor can call the State Comptroller’s Tax Assistance line at (800) 252-5555 to report possible violations.

No Commercial Use of Single Family Residential Lots:

Concerning the impact on our neighborhood (traffic, eyesore, etc.), should a neighbor conduct three or more garage sales per year or if a neighbor sells items in a yard sale which do not fit the definition of yard sale items, it might be argued that the person is operating a business on their single family residential lot. Doing so is not permitted because the lots are not “zoned” by the county for any commercial use. Plus, the Restrictive Covenants for most of our area do not allow the use of our properties for commercial or business usage of any kind.

You can check the Restrictive Covenants for any property on this website. If you do not know the location of the property (what neighborhood or phase the property is in such as Forest North Phase 2), go to www.wcad.org and search for the property address in question. On the listing you will find the neighborhood and phase information. That will enable you to access the correct Restrictive Covenants on the NASWC website.