Sales and Use Tax - Secondhand Apparel - Exemption
The introduction of HB187 aims to promote the resale of secondhand clothing, which is often seen as a more affordable and sustainable option for consumers. By exempting these lower-priced items from sales tax, the bill seeks to encourage shopping at thrift stores and similar outlets, thus supporting local businesses focused on secondhand sales. This change could lead to a beneficial economic impact by increasing accessibility to affordable clothing, especially for low-income families.
House Bill 187 proposes an exemption from sales and use tax for certain sales of secondhand apparel. Specifically, the bill defines 'secondhand apparel' as clothing or footwear that has been sold to a consumer and is being offered for resale. The exemption applies to items priced at $20 or less, meaning that such items would not be subject to the typical sales tax regulations currently imposed on new clothing sales. The enactment is intended to become effective on July 1, 2023.
While the bill has the potential for positive implications, it may face opposition related to concerns about the implications for state tax revenue. Critics might argue that such exemptions could decrease overall tax income generated from sales, which is vital for funding state services. Additionally, there may be discussions around how broadly secondhand items are defined and ensuring that the exemption primarily benefits actual secondhand sales rather than new clothing masquerading as secondhand.