Bill > HB4052

This bill creates a new sales and use tax exemption for "resale clothing," which is defined as previously sold or used clothing and footwear sold by thrift stores, consignment shops, or similar establishments. The exemption does not apply to clothing or footwear that has been materially modified to significantly increase its value, sold as a luxury or upcycled fashion item at a price higher than typical resale value, or was previously part of a sale for resale. Specifically, the bill adds Section 151.3261 to the Texas Tax Code, which exempts the sale, storage, use, or consumption of resale clothing from state taxes. The change will not affect tax liabilities that accrued before the law's effective date, which is set for September 1, 2025. This legislation aims to support secondhand clothing markets by reducing the tax burden on these transactions, potentially making used clothing more affordable for consumers and providing additional economic incentives for resale businesses.