Ever think about the legal consequences of relieving yourself of unwanted junk while making some money by selling items spread across your front yard? You may wish you had when overlooking legal ramifications of a yard sale or garage sale comes back to bite you in the wallet stuffed with cash protruding from your rear end.
Permits
Most communities haven’t yet bothered with trying to collect some extra cash by levying a tax in the form of a permit to hold a yard sale. There may be some laws on the books that are observed when you hold too many yard sales. If the neighbors are starting to complain about how often your junk is out for display, you may wind up getting a visit from police informing you that you violated a statute regarding how often you can hold a yard sale.
Homeowners Associations
Things get even more tricky on the subject of yard sales when you are part of a homeowner’s association. Any subdivision with a block captain you known by name or a privately maintained housing development is likely to be more keen on your obeying either laws of the city or their own private laws regarding when, how often and in what manner you hold a garage or yard sale. Check for restrictions especially on the subject of which days or hours of the day you are allowed to hold a yard sale.
Refunds and Returns
In most cases, those who show up at yard sales come equipped with the understanding that “buyer beware” is emblazoned in large glowing letters invisible to those who pass by without intent to buy. That unspoken agreement hardly disqualifies you from legalities aassociated with a little thing call the truth. If you are prepared to tell a potential yard sale customer an item is in working condition, your best protection is provide any necessary equipment to prove it such as batteries or electric cord. Selling an item you know does not work under the illusion that it does is known as fraud whether the item is bought in garage or a mall. The easiest and most lawful way to protect yourself against a returning customer looking to get his money back is to put all dodgy stuff into a special section which is clearly and prominently labeled being sold AS IS. Double your protection by making no statements that can be interpreted as meaning that the item is absolutely and without a doubt in working condition.
Tax Issues
Unless you are in the business of holding yard sales and the money made is a major source of your overall income, you shouldn’t have to charge sales tax, but always check to make sure. As for income taxes, the same rule applies. Primary income made from selling used stuff is most definitely taxable, but in the overwhelming majority of cases you are selling off stuff for less than you paid. Since this removes the element of profit from the mix, in most cases you don’t have to worry about reporting it as taxable income. As always, however, it doesn’t hurt and definitely helps to check with a tax expert just to make sure.
