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Sales Tax: What's My Responsibility?

Ben Franklin once said “In this world, nothing can be certain except death and taxes.” But when it comes to sales taxes and how they affect estate sales, some states are more certain than others.

Sales tax laws vary from state to state, especially when it comes to exemptions. This can make it difficult for budding estate sale companies to determine their responsibilities. Some are expected to collect and pay state sales tax, some are exempt. But even with those two options, it’s not just black and white.

It can be confusing, especially if you’re running an estate sale company in more than one state on a regular basis. Reading through legal text, hoping to find the one sentence that applies to your situation, can be difficult. And time consuming. And possibly fruitless. The business of estate liquidation is not always specifically mentioned in the law or its list of exemptions. Some states include specific exemptions for auctions, but make no mention of professionally-run tag sales. Are they basically the same in the eyes of the law? Sometimes. But not always.

And if you’re not an estate sale company, and instead seeking one out to liquidate your assets, you’ll want to know your responsibilities, and be confident the company you hire does, too.

There are exceptions to every rule and caveats for every emptor, so in an attempt to make everyone’s lives easier, we’ve collected all the basic information regarding sales tax in all fifty states, and compiled them here for your reading pleasure. 

It’s important to note, though, that tax laws frequently change, and can be interpreted differently. When asked for clarification on a rule, more than one representative at the various departments of revenue made a point of saying their explanation was only their opinion. So while this document can act as a guide—a jumping off point—you should contact your state’s department of revenue to confirm your responsibilities. But don’t worry, we’ll give you the contact information, too.

Your state can fall under a few different categories.

No sales tax
Five states—Alaska, Delaware, Montana, New Hampshire, and Oregon—do not have a sales tax. How easy is that? So easy.

Take a moment and enjoy that feeling. It will be fleeting.

Two states have taxes that affect vendors, though they are not technically sales taxes. But a tax by any other name must still be paid. Hawaii assesses a 4% General Excise Tax on all business activities, and Arizona’s Transaction Privilege Tax, which is usually passed on to the customer, is assessed for the “privilege of doing business in Arizona,” according to a Department of Revenue representative.

Estate sales as “occasional”
Every other state has a sales tax, but they also have exemptions. Frequently, estate sale companies fall under the category of “occasional,” “casual,” or “isolated” sales, not unlike privately held garage sales. The basic idea behind this exemption is that because the person hiring the company to hold the sale as essentially a one-off, sales taxes aren’t necessary.

This is always done with the stipulation that ownership of the property at no time transfers to the seller, and frequently that the items to be sold remain in the home of the person liquidating their assets. 

Arkansas, Georgia, Illinois, Indiana, Michigan, Minnesota, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Tennessee and West Virginia all have this type of exemption.

But there are a few extra exceptions.

In some states, exemption from sales tax relies on the liquidator’s willingness to release the name of the seller (or the seller’s willingness to be identified). In Illinois, for example, agents acting on behalf of an undisclosed client are considered to be the owner of the property being sold, making them responsible for the tax. If the company discloses the client’s name, the sale is taxable to the principal and not the agent. Missouri and North Dakota have a similar rule—if the client is undisclosed, it is the responsibility of the estate sale company to collect the tax. 

Oklahoma’s rules are even more strict, allowing exemptions only on estate sales held following a death. The sale, lasting no more than 3 days, must be held at the home of the deceased, within six months of his or her passing, by someone who does not hold a sales tax permit.

So if you’re operating within one of these states, keep the terms of the various exemptions in mind when deciding if you need to collect sale tax.

Sale of tangible property
Every other state considers estate sales to be taxable, as they are the sale of tangible property by a vendor. The estate sale companies are expected to register with the state and collect the state sales tax (and, perhaps, other county / city sales taxes as well).

Your state may have exemptions for specific items, like motor vehicles, so even if you know you are required to collect sales tax, it’s important to familiarize yourself with any list of exemptions your state may have. But in general, the majority of states require estate sale companies to collect sales tax.

Let’s break it down by state:

Alabama
Tax Rate: 4%  
Requirement: Yes
Website: http://revenue.alabama.gov/salestax/
Contact: 334-242-1490
Additional Details: none

Alaska
Tax Rate: None  
Requirement: No
Website: http://dor.alaska.gov/
Contact: 907-465-2300
Additional Details: As a retailer in the eyes of the state, estate sale companies must register with the state and pay the Transaction Privilege Tax (TPT) Tax. The tax rate varies depending on location.

Arizona
Tax Rate: Varies  
Requirement: Yes
Website: https://www.azdor.gov/Business/TransactionPrivilegeTax.aspx
Contact: 907-465-2300
Additional Details: none

Arkansas
Tax Rate: 6.5%  
Requirement: No
Website: http://www.dfa.arkansas.gov/offices/exciseTax/salesanduse/Documents/SalesTaxExemptionsFY2011.pdf
Contact: 501-682-7104
Additional Details: none

California
Tax Rate: 6%  
Requirement: Yes
Website: http://www.taxes.ca.gov/
Contact: 800-400-7115
Additional Details: none

Colorado
Tax Rate: 2.9%  
Requirement: Yes
Website: https://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=5619
Contact: 303-238-7378
Additional Details: none

Connecticut
Tax Rate: 6.35%  
Requirement: Yes
Website: http://www.ct.gov/drs/cwp/view.asp?a=1454&q=508078
Contact: 860-297-5962
Additional Details: none

Delaware
Tax Rate: None  
Requirement: No
Website: http://revenue.delaware.gov/services/Business_Tax/Step4.shtml
Contact: 302-577-8205
Additional Details: Delaware does not impose a state or local sales tax, but does impose a gross receipts tax on the seller of goods (tangible or otherwise) in the state.

Florida
Tax Rate: 6%  
Requirement: Yes
Website: http://floridarevenue.com/taxes/taxesfees/Pages/sales_tax.aspx
Contact: 800-352-3671
Additional Details: Sales tax must be collected, excluding sales of tangible personal property to the debtor in any bankruptcy proceedings, receiverships, or assignments.

Georgia
Tax Rate: 4%  
Requirement: No
Website: https://dor.georgia.gov/business-taxes
Contact: 877-423-6711
Additional Details: none

Hawaii
Tax Rate: None  
Requirement: No
Website: http://files.hawaii.gov/tax/legal/taxfacts/tf2015-37-1.pdf
Contact: 808-587-4242
Additional Details: Hawaii does not have a sales tax; instead, they have the General Excise Tax. The rate is 4% for estate sale companies.

Idaho
Tax Rate: 6%  
Requirement: Yes
Website: https://tax.idaho.gov/i-1049.cfm
Contact: 800-972-7660
Additional Details: none

Illinois
Tax Rate: 6.25%  
Requirement: Yes/No
Websitehttp://tax.illinois.gov/LegalInformation/Regs/Part130/130-1915.pdf
Contact: 800-732-8866
Additional Details: A liquidator acting on behalf of an unknown or undisclosed principal is considered to be the owner of the tangible personal property that will be sold and is responsible for paying Retailers' Occupation Tax on the gross receipts from the sale. If the principal is disclosed, if the tangible personal property sold would constitute an occasional sale, then the sale is not taxable. If tax is due, it is based upon the total selling price, including any commission.

Indiana
Tax Rate: 7%  
Requirement: No
Website: http://www.in.gov/dor/files/sib20.pdf
Contact: 317-232-2240
Additional Details: The sale is considered a casual sale and therefore not taxable.

Iowa
Tax Rate: 6% 
Requirement: No
Website: https://tax.iowa.gov/iowa-sales-tax-and-auctions
Contact: 800-367-3388
Additional Details: The agent-principal relationship dictates that if the owner of the property meets the occasional sales requirement, so would their liquidator.
Kansas
Tax Rate: 6.5%  
strong>Requirement: No
Website: http://www.ksrevenue.org/pdf/pub1510.pdf
Contact: 785-368-8222
Additional Details: Falls under the category of occasional sales. State sales tax guide specifically says "Sales that usually meet this criteria are estate sales, farm sales, garage sales, and some auctions."

Kentucky
Tax Rate: 6%  
Requirement: Yes
Website: http://revenue.ky.gov/Business/Sales-Use-Tax/Pages/default.aspx
Contact: 502-564-5170
Additional Details: none

Louisiana
Tax Rate: 5%
Requirement: Yes
Website: http://www.rev.state.la.us/SalesTax
Contact: 855-307-3893
Additional Details: none

Maine
Tax Rate: 5.5%  
Requirement: Yes
Website: http://www.maine.gov/revenue/salesuse/salestax/salestax.html
Contact: 207-624-9693
Additional Details: none

Maryland
Tax Rate: 6%  
Requirement: Yes
Website: http://www.dsd.state.md.us/comar/comarhtml/03/03.06.01.27.htm
Contact: 410-767-1502
Additional Details: none

Maine
Tax Rate: 5.5%  
Requirement: Yes
Website: http://www.maine.gov/revenue/salesuse/salestax/salestax.html
Contact: 207-624-9693
Additional Details: none

Massachusetts
Tax Rate: 6.25%  
Requirement: Yes
Website: http://www.mass.gov/dor/
Contact: 617-887-6367
Additional Details: none

Michigan
Tax Rate: 6%  
Requirement: No
Website: http://www.michigan.gov/taxes/0,4676,7-238-43519---,00.html
Contact: 517-636-6925
Additional Details: If the estate sale is held on the homeowner's property, that usually means they are relieved of their sales tax liability.

Minnesota
Tax Rate: 6.88%  
Requirement: No
Website: http://www.revenue.state.mn.us/businesses/sut/factsheets/FS132.pdf
Contact: 800-657-3777
Additional Details: Estate sales are considered an isolated sale if the items are never owned by the company, if they do not carry insurance on the property, and if the company and the owner of the property have a written agreement.

Mississippi
Tax Rate: 7%  
Requirement: Yes
Website: http://www.dor.ms.gov/Business/Pages/Sales-Use-Tax-landing.aspx
Contact: 601-923-7700
Additional Details: Unless specifically exempt or excluded, all sales of tangible personal property are subject to the sales or use tax.

Missouri
Tax Rate: 4.225%  
Requirement: Yes/No
Website: http://dor.mo.gov/business/sales/
Contact: 573-751-2836
Additional Details: none

Montana
Tax Rate: none  
Requirement: No
Website: https://revenue.mt.gov/
Contact: 866-859-2254
Additional Details: none

Nebraska
Tax Rate: 5.5%  
Requirement: No
Website: http://www.revenue.nebraska.gov/info/6-361.pdf
Contact: 800-742-7474
Additional Details: If the sale lasts no more than three days and is held at the client's home, no taxes need be charged.

Nevada
Tax Rate: 4.6%  
Requirement: Yes
Websitehttps://tax.nv.gov/

Contact: 866-962-3707
Additional Details: none

New Hampshire
Tax Rate: none  
Requirement: No
Website: https://www.revenue.nh.gov/
Contact: 603-230-5000
Additional Details: none

New Jersey
Tax Rate: 6.875%  
Requirement: No
Website: http://www.state.nj.us/treasury/taxation/su.shtml
Contact: 609-292-6400
Additional Details: As long as the estate sale company is not taking possession of the items for sale in their own inventory and are selling the items at the individual's home, the sales are not subject to tax.

New Mexico
Tax Rate: 5.125%  
Requirement: Yes
Website: http://www.tax.newmexico.gov/Businesses/gross-receipts.aspx
Contact: 505-827-0700
Additional Details: The company can choose to collect sales tax or not, but they are required to pay the state.

New York
Tax Rate: 4%  
Requirement: Yes
Website: https://www.tax.ny.gov/
Contact: 518-457-5181
Additional Details: none

North Carolina
Tax Rate: 4.75%  
Requirement: Yes/No
Website: http://www.dor.state.nc.us/practitioner/sales/bulletins/section34.pdf
Contact: 877-252-3052
Additional Details: Considered an occasional sale. But if the items are moved off site or possession is transferred to the estate sale company, then they would need to collect sales tax.

North Dakota
Tax Rate: 5%  
Requirement: Yes
Website: https://www.nd.gov/tax/data/upfiles/media/gl-22054.pdf?20170428133923
Contact: 701-328-1246
Additional Details: If the company discloses who they are conducting the estate sale for they would not need to collect sales tax. It's considered a casual sale. If they do not disclose who they are conducting the estate sale for they do need to collect sales tax--it is considered a consignment type sale.

Ohio
Tax Rate: 5.75%  
Requirement: No
Website: http://www.tax.ohio.gov/sales_and_use/information_releases/st199101.aspx
Contact: 888-405-4039
Additional Details: If more than 2 sales are held within 12 months at the residence, sales tax is required. 

Oklahoma
Tax Rate: 4.5%  
Requirement: No
Website: https://www.ok.gov/tax/Businesses/Tax_Types/Business_Sales_Tax/
Contact: 405-521-3160
Additional Details: Sale must last no more than 3 days, must he help within 6 months from the death of the estate owner, and held on the premises of the former residence of the decedent by a person that is not required to be licensed pursuant to the Transient Merchant Licensing Act, or who is not otherwise required to hold a sales tax permit.

Oregon
Tax Rate: none  
Requirement: No
Website: https://www.oregon.gov/DOR/Pages/sales-tax.aspx
Contact: 503-378-4988
Additional Details: none

Pennsylvania
Tax Rate: 6%  
Requirement: No
Website: http://www.pacode.com/secure/data/061/chapter32/s32.4.html
Contact: 717-787-1064
Additional Details: none

Rhode Island
Tax Rate: 7%  
Requirement: Yes
Website: http://www.tax.ri.gov/streamlined/
Contact: 401-574-8955
Additional Details: none

South Carolina
Tax Rate: 6%  
Requirement: Yes
Website: https://dor.sc.gov/tax/sales
Contact: 803-898-5000
Additional Details: none

South Dakota
Tax Rate: 4%  
Requirement: Yes
Website: http://dor.sd.gov/Taxes/Business_Taxes/Publications/PDFs/STGuide.pdf
Contact: 800-829-9188
Additional Details: none

Tennessee
Tax Rate: 7%  
Requirement: Yes
Website: https://www.tn.gov/revenue/topic/sales-and-use-tax
Contact: 800-342-1003
Additional Details: none

Texas
Tax Rate: 6.25%  
Requirement: Yes
Website: https://comptroller.texas.gov/taxes/sales/
Contact: 800-252-5555
Additional Details: none

Utah
Tax Rate: 4.7%  
Requirement: Yes
Website: http://tax.utah.gov/
Contact: 800-662-4335
Additional Details: none

Vermont
Tax Rate: 6%  
Requirement: Yes
Website: http://tax.vermont.gov/business-and-corp/sales-and-use-tax
Contact: 802-828-2505
Additional Details: none

Virginia
Tax Rate: 5.3%  
Requirement: Yes
Website: https://www.tax.virginia.gov/sales-and-use-tax
Contact: 804.367.8037
Additional Details: none

Washington
Tax Rate: 6.5%  
Requirement: Yes
Website: http://dor.wa.gov/Content/GetAFormOrPublication/PublicationBySubject/TaxTopics/EstateSales.aspx
Contact: 800-647-7706
Additional Details: none

West Virginia
Tax Rate: varies by location  
Requirement: No
Website: http://tax.wv.gov/Business/SalesAndUseTax/Pages/SalesAndUseTax.aspx
Contact: 800-982-8297
Additional Details: none

Wisconsin
Tax Rate: 5%  
Requirement: Yes
Website: https://www.revenue.wi.gov/Pages/SalesAndUse/Home.aspx
Contact: 307-777-5200
Additional Details: none

Wyoming
Tax Rate: 4%  
Requirement: Yes
Website: http://revenue.wyo.gov/
Contact: 804-367-8037
Additional Details: none

 

Be sure to follow up with your own research. While we’re confident about the information here, laws and tax rates can change. We reached out to many Departments of Revenue in this process, and found speaking to a representative to be a relatively simple process, if occasionally time consuming. (We now have very strong feelings about hold music. I don’t remember which state had us belting out “Total Eclipse of the Heart,” as we waited, but I’d like to give them props regardless.) But for both the company and those who hire them, knowing the state’s expectations for estate sales is vital.