Arkansas: Sales & Use Tax: Consignment Sales of Used Children’s Clothing Taxable
AR: The taxpayer’s biennial consignment sales of used children’s clothing would be subject to Arkansas sales and use tax because the taxpayer was an established business making taxable sales. Taxpayers are entering a typical consignment deal with individuals looking to sell used or second-hand children’s clothing. The Department of Treasury and Administration stated that the taxpayer, as an established business, must obtain a sales tax permit and collect and remit sales tax on its semi-annual consignment sales unless an exemption applies.
Generally, the recipient, in this case, the taxpayer, makes a taxable consignment sale for a shipper is responsible for collecting, remitting, and reporting taxes on gross proceeds from the consignment sale. Any person responsible for collecting and remitting sales tax is eligible to apply for a sales tax permit. In addition, the department explained that since the taxpayer provided a physical forum for the sale of tangible personal property, the taxpayer would be required to collect and remit sales tax as a market agent if its sales exceed $100,000 or $200 in any year transactions. Opinion No. 20191004
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