Who had to collect Texas sales tax on antique-mall consignment sales, and did the consignor need a permit for the mall location?

Plain-English summary

The Comptroller said seller identity controlled who collected tax on consigned merchandise at an antique mall.

If the consignor was identified to the purchaser as the merchandise owner, the consignor was the seller, had to collect and remit tax, and needed a sales tax permit for the mall location.

If the consignor was not identified to the purchaser, the mall proprietor was the seller. The proprietor then collected the tax, the consignor did not need another permit for the mall, and the proprietor should give the consignor a properly completed resale certificate for the consigned items.

Common questions

Did every consignor need a separate permit at the mall? No. The permit was required when the consignor was identified to the purchaser as the seller.

What if the buyer saw only the mall as the seller? The mall proprietor collected tax and gave the consignor a resale certificate.

Is a sales tax permit itself a resale certificate? No. The letter noted that a permit holder is qualified to issue a resale certificate; the two are not the same document.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9003L0984D08

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller March 5, 1990

Dear *:

Thank you for your recent letter regarding your sales tax permit
and the requirements for consignment sales.

According to the records of this office you are currently permitted
for two locations. One permit is issued for a location in *
and one for a location in*. I might mention that a person who
has a sales tax permit is qualified to issue a resale certificate
since in your letter you refer to your sales tax permit as a resale
certificate.

You stated that you consign merchandise to an antique mall at
another location and that the mall proprietor has requested that
you obtain another sales tax permit for that location.

You are considered the seller and are responsible for collecting
and remitting sales tax on the items if you are identified to the
purchaser as the owner of the merchandise at the time the mall
proprietor sells the items. Under this arrangement you are required
to have a sales tax permit for the mall location. If you are not
identified to the purchaser at the time of a sale, then the mall
proprietor is considered the seller and is responsible for the tax
collection, and you are not required to have a sales tax permit for
the mall location. If it is determined that the mall proprietor is
the seller then he should give you a properly completed resale cer-
tificate for the items he sells on consignment for you.

This opinion is based on the facts presented. If there are addi-
tional or different facts, the opinion may change.

If you have any questions or need additional information, you may
call me toll free at 1-800-252-5555, extension 5-0330. The
regular number is 512/463-4600, or write me at Tax Correspondence,
Comptroller of Public Accounts.

Sincerely,
Bettie U. Peterson
Tax Correspondence Division