Texas – Occasional Sales

SALT Report 1543 – In their monthly newsletter the Texas Comptroller of Accounts addressed the taxability of occasional sales.  In general, sales tax applies to the sale of taxable items regardless of the price of the item, or the number of sales made by the seller.

However, certain transactions may qualify for an exemption under Texas Tax Code Section 151.304 as an “occasional sale.”  Persons who make occasional sales are not required to hold a Texas sales tax permit or collect tax if they meet the following conditions:

  • Sales, regardless of price, are limited to one or two taxable items, during any 12-month period by a person who does not hold, or is not required to hold, a sales tax permit or license issued by Texas or another state, and
  • Sales are limited to $3,000 in a calendar year for items that were originally acquired for personal use

If you continue to sell taxable items after you have reached the $3,000 limit and you have made more than two sales, you will be considered engaged in business in the state.  In this case, you will be required to obtain a sales tax permit and start collecting tax on any subsequent sales of taxable items, beginning with the first sale that occurs after the$3,000 or two item limit is reached.

Additionally, the occasional sale exemption does not apply to persons regularly engaged in the business of making sales.

For Further Information:

Texas Comptroller of Accounts – Tax Policy News