What is an estate sale?
An estate sale is a sale or auction of someone’s tangible personal property. The person may have recently died or the person may be living and need to get rid of items before moving. The property is usually a collection of household goods such as furniture, jewelry, clothing, etc.
Who is an estate seller?
You are an estate seller if you sell tangible personal property on behalf of a person or a person’s estate that owns the property being sold. You may sell the property in the property owner’s name (consignment sales) or in your own name.
As an estate seller, you will usually take a percentage of the net proceeds (usually anything from 25 percent to 50 percent). You may also charge for the costs of holding the sale. This can include advertising, marketing, research, labor, security, and refreshments.
Why do I need to register with your department?
You need to register with the Department of Revenue because an estate seller is legally defined as a seller (RCW 82.08.010 (2)(a)). That means you need to collect and report retail sales tax on these sales.
How do I report sales and taxes?
If you are an estate seller who sells tangible personal property in the name of the owner:
- You first need to report consignment sales under the Retailing B&O tax classification. Then, you can take a deduction under this classification. You can itemize this deduction as “Consignment sales.” In the end, you might not owe Retailing B&O tax due on such sales.
- You need to report consignment sales under the Retail Sales tax classification. Generally, you are responsible for reporting the retail sales tax to our Department. However, if the owner of the tangible personal property is already registered with us, you can give the retail sales tax to the owner. Then, the owner would need to report and report the retail sales tax to our Department (with their excise tax return). In this case, your deduction for the retail sales tax (given to the owner) would be allowed under the Retail Sales tax section. On the deduction detail section of the excise tax return, you will list the deduction under “Other” and then write “sales tax remitted to owner” as the explanation.
- You must report consignment sale commission amounts under the Service and Other Activities B&O tax classification.
If you are an estate seller who sells tangible personal property in your own name:
- You need to report sales under the Retailing B&O tax classification. You cannot deduct for consignment sales.
- You need to report sales under the Retail Sales tax classification. You cannot deduct for consignment sales.
- You need to report income received from cost reimbursements. This include costs of holding the sale, advertising, marketing research, labor, security, refreshments, and other fees. You report this amount under the Service and Other Activities B&0 tax classification.
You do not report commission amounts on these sales.