Consignment Sales (Publication 114)

Instead of making direct sales, individuals and businesses often place goods with others who sell the items for them. These types of transactions are commonly called "consignment sales." In most cases, only the seller (the "consignee") needs to register with us to obtain a seller's permit (Regulation 1569, Consignees and Lienors of Tangible Personal Property for Sale). The owner of the item (the "consignor") is not required to register with us to obtain a seller's permit if the consignor only places goods on consignment. Please see Placing Items on Consignment for more information.

However, if you are otherwise engaged as a seller of tangible personal property or make more than two sales in any twelve-month period, you would be required to obtain a seller's permit for your sales of goods that were not placed on consignment (Regulation 1595, Occasional Sales—Sale of a Business—Business Reorganization).

I sell items placed with me on consignment. When is my consignment sale considered a retail sale?

For example, you may own a jewelry store where you sell jewelry on consignment. Typically, the owner of the jewelry will bring it to you and sign an agreement that authorizes you to sell the item and transfer ownership to the buyer. You are considered the retailer of jewelry you sell in this way and must pay sales tax based on your retail selling price.

If you make sales on behalf of others, and those sales do not meet the two conditions described above, please read see Broker Sales.

Please note : This publication summarizes the law and applicable regulations in effect when the publication was written. Changes in the law or in regulations may have occurred since that time. If there is a conflict between the text in this publication and the law, decisions will be based on the law and not on this publication.