Will you have to pay sales tax on money generated from your summer garage sale in Illinois?On the heels of the smorgasbord of taxes recently approved by the Illinois general assembly, people are asking if a new tax on garage sale proceeds paid by the individual having a garage sale will be next?

This past week, Illinois saw  lawmakers in Springfield approve massive hikes on gasoline, car license plate registration fees to fund state government operations and to help finance a $1600 pay raise for state lawmakers.

This summer, hundreds of thousands of Illinois residents will be engaging in that summer ritual of cleaning out their basements and selling stuff they don't need and having a garage sale at their homes. The question always comes up:

Are proceeds from garage sales taxable? The Answer: Maybe

The IRS says: YES! If......

You sold a painting on an online auction website for $100. You bought the painting for $20 at a garage sale years ago. Report your $80 gain as a capital gain on Schedule D (Form 1040).

If you did NOT gain money, than NO. Chances are Uncle Harry's old jeans he paid $19.99 for, sold at your garage sale for $2.00. Those are NOT taxable..

But, what is the rule in Illinois about proceeds from garage sales? Not Yet....

According to Illinois.gov,

​No. These types of activities are occasional sales and are therefore not taxable.

Did you know that in a average week $4,222,375 is generated from garage sales nationwide. Tack on 8.25 % sales tax to that and you could generate an additional $34,845 a week. But, never say never, this is Illinois after all, and the state is grabbing for money anywhere it can find it. Also, please don't tell anyone in state government. We don't need to give them any ideas.