Shoppers often unknowingly pay sales tax twice on the same item due to an unfair quirk in the system.
Thrift stores have exploded in popularity in recent years as households look for bargains and opt for more sustainable alternatives.
But resale giants have highlighted how consumers are being denied a vital saving.
This is because sales tax is still charged on items purchased secondhand, even if it has already been paid on the initial purchase.
Resale giants like The RealReal, Vestiaire Collective and ThredUp are now backing a petition calling for the end of double taxation.
Rachel Kibbe, 43, is the founder and CEO of American Circular Textiles, a coalition advocating for sustainable fashion and circularity in the US.
Rachel Kibbe, 43, has become the face of the movement. New York native’s coalition, American Circular Textiles, advocates for sustainable fashion and circularity in the US.
Kibbe, along with the coalition’s 40 member organizations, wrote a petition to U.S. state lawmakers asking for consideration for eliminating sales and use taxes on used clothing on a state-by-state basis.
“This practice stifles sustainability and stifles companies that try to do the right thing by reselling products,” Kibbe told DailyMail.com.
Young people who have dedicated themselves to saving second-hand clothes are also complaining about higher prices after the extra tax is added.
A user on Instagram asked, “Why do I pay sales tax on used items at a thrift store?”
Another said: ‘If we really cared about the environment we wouldn’t tax second hand shops so people would be encouraged to recycle goods.
“One man’s junk is another man’s treasure, but in the U.S., capitalism rules and consumerism fuels it.”
An
‘They’re lucky that used s**t doesn’t just end up in the landfill. B******s are lucky we’re repurposed thrift store, Etsy, eBay… stop taxing us!!!!’
Clothing is tax-free in only four states Delaware, Montana, New Hampshire And Oregon. In all other states, clothing is generally subject to sales tax, with some exceptions.
The additional tax does not apply in all states, as some have specific exemptions for certain types of wearables or transactions.
Even as resistance to paying additional taxes grows, the second-hand clothing market continues to grow 18 percent last year to reach a valuation of $197 billion
If the secondary tax on clothing were abolished, Kibbe (centre) believes small businesses such as thrift stores, mending services and repair shops would flourish ‘by providing essential services and creating jobs’
In California and Tennessee, some nonprofits and thrift organizations that provide clothing to people in need are tax exempt.
In Ohio, Virginia and South Carolina, some protective clothing may be tax exempt, and in Idaho, exceptions may apply regarding free clothing for charities.
Despite the tax complication, the used clothing market continues to grow.
ThredUp – an online consignment and thrift store – revealed in its annual report that American consumers spend almost half of their clothing budget on second-hand items.
The report also found an 18 percent increase in the global second-hand market last year, reaching a valuation of $197 billion.
Second-hand clothing sales are on track to account for a tenth of the global fashion market next year, as the cost of living crisis and sustainability concerns drive consumers to seek out end-of-life products. The Guardian reported.
ThredUp estimates that the U.S. used market will reach $73 billion by 2028, an average increase of 11 percent per year.
Kibbe’s petition addressed to U.S. state lawmakers asks for consideration of eliminating sales and use taxes on used clothing on a state-by-state basis
There has been an 18 percent increase in the global second-hand market in recent years, reaching a valuation of $197 billion (stock image)
“Our coalition is leading something very overlooked and very impactful: ending the double tax on second-hand clothing. Clothes are taxed twice: first when they are sold new and second when they are sold second-hand,” Kibbe said
For sellers, offering already worn goods is an easy way to make money.
Resale can also benefit local communities by sourcing items from small businesses, thrift stores or garage sales.
But even as the resale market grows, consumer culture reigns supreme.
As much as 85 percent of discarded textiles end up in landfills, with 17 million tons of textile waste piling up in the US.
The petition states that the abolition of the tax will encourage reuse and repurposing of clothing to reduce the fashion industry’s impact on the environment.
The document also states that the change would additionally benefit lower-income individuals and families.
If the secondary tax on clothing were abolished, Kibbe believes small businesses such as thrift stores, sewing shops and repair shops would flourish “by providing essential services and creating jobs.”
Kibbe said: ‘Ending double taxation is not only the fair and right thing to do, it will also boost economic growth and reinforce the trend of shopping for well-made clothing that can be reused or repaired rather than in the increasingly large growing piles to be thrown. of textile waste.’
Kibbe and the ACT wrote it petition on National Second Hand Day, August 25.