Estate Sale State Sales Tax Guide

Do you collect state sales tax at estate sales? Should you? When it comes to estate sales, sales tax laws can be confusing. Between different state laws and certain exemptions, estate sale laws and auctions laws, it can be time-consuming keeping up with the changing laws and regulations. And what if you’re an estate sale company that holds sales in more than one state?

The good news is, while it can be a hassle to collect and report sales tax, the burden is on estate sale shoppers to pay the tax — not on the estate sale company.  However, it is up to the estate sale company to register with the state where estate sales are conducted, and then to collect and report the state and and other municipal or city taxes (if applicable), as well.

It’s also best contact someone from your state if you still have questions about taxes at your estate sale. Sales tax isn’t something you want to guesstimate! And as anyone who’s ever searched a .gov website knows, information isn’t always easy to find, and laws are constantly getting updated.

Below are a few terms defined from the map legend to help.

Vendor Tax

Some states require a tax, although it’s not technically a “sales” tax. Arizona requires a Transaction Privilege Tax and Hawaii requires a 4% General Excise Tax on business transactions. As with sales tax, these taxes are usually passed on to the paying customer.

Occasional/Isolated Sale Exemptions

Some states provide exceptions for estate sales since they are generally considered one-time-only sales. This is assuming the sale takes place on-site at the estate and the estate liquidator isn’t buying the property.

Dependent on Seller Disclosures

Sometimes the occasional/isolated sale tax exemption depends on whether the estate sale company can release the estate owner’s name. Some states will recognize the liquidator as the owner of the estate, if the owner isn’t disclosed. This matters. Whomever the state recognizes as the estate’s owner will be responsible for collecting the state sales tax.

More Exemptions May Apply

Where more exemptions apply, we suggest you call your state’s sales tax office and get a person on the phone, rather than searching through a .gov website. When it comes to the IRS, it’s better to be safe than sorry.

We created this U.S. Sales Tax map to easily find the states with sales tax, the states without sales tax, and the different exemptions where they apply. Simply find your state and follow the legend to find the rule.

*Note: your city and/or county may collect additional taxes, depending on your state, which is why the numbers on the map may seem lower than what you are used to collecting.

Estate Sale State Sales Tax Requirements

*More exemptions may apply. Contact your state’s tax office.

Massachusetts
In MA, according to the ruling on Diane Sherman vs Commissioner of Revenue: “A person in the business of managing garage and yard sales in which goods are sold on the owner’s premises and remain under the owner’s control until sold was not a “vendor” for purposes of G. L. c. 64H, Section 2, and thus was not liable for the collection and return to the Commonwealth of sales tax on the goods sold.” One can therefore conclude from the this ruling that sales tax for estate sales in MA may not be subject to collection provided the circumstances meet the criteria put forth in the ruling.

Source: http://www.salestaxinstitute.com/resources/rates

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