Yes, thrift stores charge sales tax in most of the country. Any state that has a sales tax applies it to secondhand goods the same way it applies it to new ones, so a used coat at a charity shop rings up with the same rate as a new coat at a department store. The only places you won’t see it are the five states with no statewide sales tax at all: Alaska, Delaware, Montana, New Hampshire, and Oregon.1Tax Foundation. State and Local Sales Tax Rates, 2026
Combined state and local rates run from zero in those five states up to roughly ten percent in the highest jurisdictions. On a $40 thrift store haul, that’s the difference between paying nothing extra and adding four dollars at the register. Worth checking your local rate before a big trip.
Nonprofit Stores Still Collect Sales Tax
This is where most of the confusion starts. Organizations with 501(c)(3) status are exempt from federal income tax on their own earnings, and they often avoid paying sales tax on items they buy for their charitable operations.2Internal Revenue Service. Exemption Requirements – 501(c)(3) Organizations That exemption belongs to the organization. It does not follow the merchandise to your receipt.
When you buy a shirt at Goodwill, Salvation Army, or a local church thrift shop, you are a retail customer making a taxable purchase. State revenue departments treat charity-run stores as collection agents just like any other retailer, and stores that fail to collect face penalties ranging from fines to loss of their operating permits. A small number of states carve out limited exemptions for specific categories of used goods sold by nonprofits, but these are narrow and uncommon enough that you should assume you’ll pay tax unless the register tells you otherwise.
Where You Won’t Pay Sales Tax
Alaska, Delaware, Montana, New Hampshire, and Oregon impose no statewide sales tax, so retail purchases in those states arrive without one.1Tax Foundation. State and Local Sales Tax Rates, 2026 Alaska is the wrinkle in the group. The state itself charges nothing, but some municipalities levy their own local sales tax, so a thrift store in one Alaskan town might add a charge while one in the next town over doesn’t.
Living near a state border sometimes tempts shoppers into driving across to buy tax-free. That strategy runs into a legal catch called use tax. Most states require you to self-report and pay a tax equivalent to your home state’s sales tax on out-of-state purchases where no tax was collected. Enforcement is spotty for small purchases, but the obligation exists.
Exemptions That Can Shrink Your Bill
Clothing Exemptions by State
A handful of states exempt clothing from sales tax entirely, and others exempt it only when the price falls below a per-item cap. Those caps range from around $110 to $250 depending on the state. Since almost everything on a thrift store rack is priced well under any of those thresholds, shoppers in those states effectively pay no sales tax on secondhand clothing at all. Your state revenue department’s website will tell you whether clothing where you live is fully exempt, partially exempt, or fully taxable.
Sales Tax Holidays
Roughly twenty states run temporary sales tax holidays each year, typically lasting a weekend or a week. Common exempt categories include clothing, school supplies, and computers, often with per-item price caps. These holidays are a real windfall for thrift shoppers because the low prices at secondhand stores almost always fall under the caps. A back-to-school holiday exempting clothing under $100 per item covers virtually everything on a thrift store rack. Most of these holidays land between late July and early September.
Skipping the Tax With a Resale Certificate
If you buy inventory at thrift stores to resell, you can avoid paying sales tax at checkout by presenting a resale certificate. The logic is straightforward. Sales tax is meant to be paid once by the final consumer, and since you plan to resell the item and collect tax from your buyer at that point, taxing you at purchase would create double taxation. The certificate tells the store this particular sale isn’t the final retail transaction.
Every state with a sales tax has its own version of the form. The details vary, but you generally need to provide your legal business name and address, your state-issued sales tax registration number, and a description of what you’re buying. You sign a statement confirming the goods are for resale, not personal use. Some states accept a blanket certificate covering all future purchases from the same store; others require a new form for each transaction.
The part that trips people up: thrift stores are not legally required to accept your resale certificate. A store can refuse for any reason, and many do, especially when staff aren’t familiar with the process or the transaction is small. If a store refuses, you pay the tax and recover it later by claiming it as part of your cost of goods sold or by requesting a credit on your sales tax return. The tax isn’t lost. It just hits your books differently.
Stores that accept resale certificates have to keep a copy on file. That copy is their proof during an audit that they were justified in not collecting tax. If the store can’t produce the certificate later, the unpaid tax liability can fall back on them, which is exactly why some stores would rather charge the tax and avoid the risk.
Penalties for Misuse
Using a resale certificate to skip tax on items you keep for yourself is fraud, and states treat it that way. Penalties commonly include the full amount of unpaid tax, an additional penalty often running 50 to 100 percent of that tax, interest on the balance, and in serious cases criminal prosecution. Some states also revoke the offender’s sales tax registration, which effectively shuts down the ability to run a retail business.
The math never works out. Saving seven or eight percent on a thrift store purchase is meaningless against owing double the tax plus interest after an audit. State revenue departments cross-reference certificate usage against reported sales, and a business claiming large tax-exempt purchases but reporting little revenue is an obvious audit target.
The Tax Angle Most Shoppers Miss: Donations
The bigger tax opportunity at a thrift store isn’t at the register. It’s at the drop-off door. Donations of used clothing and household items to a thrift store run by a 501(c)(3) organization may be deductible on your federal income tax return.3Internal Revenue Service. Publication 526 (2025), Charitable Contributions The catch is that the deduction only helps if you itemize, and the standard deduction for 2026 is $16,100 for single filers and $32,200 for married couples filing jointly.4Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Most people take the standard deduction, so donations provide no tax benefit for them. If your combined itemized deductions clear the standard amount, the donation becomes worth tracking.
You can deduct the fair market value of donated items, not what you originally paid. The IRS says prices buyers actually pay at thrift stores and consignment shops are a reasonable indication of value for used clothing and household goods.5Internal Revenue Service. Publication 561 (12/2025), Determining the Value of Donated Property A shirt you paid $60 for three years ago might realistically sell for $4 at a thrift store, and $4 is the deductible amount. Every donated item must be in good used condition or better to qualify, with one narrow exception for any single item valued over $500 backed by a qualified appraisal.3Internal Revenue Service. Publication 526 (2025), Charitable Contributions
Keep a written record of what you donated, the condition, the estimated value, the organization’s name and address, and the date. Get a receipt. If a single donation exceeds $250, you also need a written acknowledgment from the organization. For total noncash contributions over $500, you file Form 8283 with your return, and any single item or group of similar items valued above $5,000 requires a qualified appraisal.6Internal Revenue Service. Instructions for Form 8283 (Rev. December 2025) Those records are what protect the deduction if the IRS asks about it later.