ACT Urges Lawmakers to Ditch Secondhand’s ‘Double-Dipping’ Tax Policy
Shopping secondhand has been lauded as a surefire way to minimize textile waste and play a concrete role in combating the climate crisis. But in doing so, American consumers are paying tax twice.
Some feel this double taxation is an unfair, and no longer relevant, “double dip” into shopper’s pockets.
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The American Circular Textiles (ACT), in partnership with a coalition of its 30-plus members, has launched a nationwide petition to ditch double taxation on secondhand goods, repairs and alterations. The appeal has received 300-plus signatures thus far, with backing from the likes of Fashionphile, ThredUp, Vestiaire Collective and more, per the Action Network petition.
“Consumers’ pocketbooks are stretched thin. Monthly spending on apparel and footwear has risen as whopping 72 percent since January 2020, and more shoppers are turning to secondhand first,” Rachel Kibbe, founder and CEO of the group, said. “Ending double taxation is not only the fair and just thing to do, it will also spur economic growth and strengthen the trend toward shopping for well-made clothing that can be reused and/or repaired rather than tossed into the ever-growing piles of apparel waste.”
Numerous states nationwide impose sales tax on secondhand items, including clothing, shoes and accessories. This results in a form of double taxation, considering consumers are taxed both when the item is first purchased and again when bought through resale channels.
“Unspun is proud to support the nationwide petition to eliminate double taxation on secondhand goods,” co-founder and CEO Beth Esponnette said. “This is a crucial step that will encourage a shift toward an economy that values reuse and repair, benefitting both consumers and the environment.”
Furthermore, ACT said, the policy not only discourages sustainable shopping practices but “hinders the growth” of the secondhand market and circular economy. “Stop Secondhand Clothing from Being Taxed Twice” outlines the other “detrimental effects” of double taxation and urges lawmakers to take action.
“Ending double taxation will lead to cost savings for consumers and support American businesses,” the petition reads. “A staggering 85 percent of discarded textiles end up in landfills, with more than 17 million tons of textile waste piling up across the U.S.”
Eliminating the double taxation on secondhand goods is simply a “smart policy,” according to ThredUp.
“It will not only help fuel the circular economy but it’s also common-sense approach to further empower consumers to make smart, sustainable choices,” Alon Rotem, the online consignment and thrift store’s chief legal officer, said. “It’s a clear win for the future of fashion and taxpayers who want to do the right thing.”
Fashionphile, too, expressed excitement in joining ACT in the fight to eliminate secondhand sales tax.
“We believe that we can make a powerful case for sustainable shopping choices if work is done to mitigate the financial strain that these taxes place on consumers,” Nora M. Cummings, vice president of retail and impact at Fashionphile, said. “Together, we’re not just advocating for fashion; we’re championing a more eco-friendly and accessible future for all.”
Vestiaire Collective, meanwhile, highlighted the crucial role pre-loved platforms play in removing barriers for circular businesses.
“Fair tax policies enhance the viability of secondhand markets, benefitting both the environment and the economy,” Samina Virk, North American CEO of the B Corp, said. “Moreover, this campaign aligns with our advocacy efforts in France and Europe for new VAT policies to support circular economic models.”
The petition calls on individuals to write to lawmakers and urge them to consider jettisoning the loophole for four reasons. Namely, to support the circular economy and sustainability goals but also provide economic relief for consumers, support local businesses and align with broader policy goals.
“Eliminating these taxes aligns with broader legislative goals aimed at promoting sustainability, supporting small businesses and reducing economic inequality,” the pre-written plea reads. “It also complements other efforts to encourage circular economy practices, such as the development of regulations like [Extended Producer Responsibility] which will require that businesses reuse and recycle what they sell in the United States. This is a common-sense step toward a more sustainable and equitable future.”
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