Resale businesses, including ThredUp, Vestiaire Collective, Fashionphile, and others, say customers are paying more than they should be for secondhand clothes. Alongside the American Circular Textiles initiative, representatives from these brands want to put an end to sales tax on resold clothing in the United States. The argument is that in some states, clothing is taxed when you first buy it and then again when you buy it on resale (essentially double the tax for the same item). The collective put together a petition asking for this to change.
“Ending double taxation on secondhand goods will lead to cost savings for consumers and support American businesses," the petition started by Rachel Kibbe, CEO and founder of American Circular Textiles, reads. "A staggering 85% of discarded textiles end up in landfills, with 17 million tons of textile waste piling up across the U.S. By making secondhand clothing and repair more financially accessible, we can foster a culture of reuse and recycling, helping to reduce overall waste.”
Sales tax is different at both the state and county levels, and it's often used to fund programs for schools and infrastructure, which are crucial. As such, legislators argue that the loss of this revenue could be an issue. However, in an interview with Teen Vogue, Kibbe says that the problem for their coalition is that tax dollars are not being used to address the clothing waste crisis in any way, and so the best solution right now is to incentivize customers to buy more secondhand clothes.
“Our argument is textiles, apparel, footwear, our whole industry has been so ignored both on the state and federal level," Kibbe explains, “and one of the issues is that there has never been funding allocated to us, right? We just introduced the first reuse and recycling provisions in federal history on the federal level, and we're using De Minimis Trade Loophole funding to fund those.”
On National Thrift Day, August 27, the campaign will officially launch through various activations put together by the participating brands – not all of which are resale, but some, like H&M, are still supporting the initiative. "It makes it a lot easier of a proposition for them to start selling secondhand clothes if the price point's more accessible to their customers,” says Kibbe.
Of course, for this major shift to come to fruition, it will take a lot more than a petition (though that is, of course, a start). Tax laws vary widely, and so does the use of the funds. It would require local advocacy to change each one, whether that’s by removing sales tax on resale or making sure sales taxes fund circularity initiatives.
See the full petition and all of the participants here.
