Thrifter Tax Collection & Codes
Last Updated: 3/12/2026 | Effective: 2/10/2026
This document provides a reference for how Thrifter collects, calculates, and remits sales tax on clothing and apparel transactions. It covers the transition from Thrifter's prior flat-rate tax model to a state-by-state rate structure, an explanation of tax codes and their role in the platform's tax engine, applicable state rates, and sales tax holidays. This document is intended for both internal use and external disclosure.
1. Overview of Tax Collection on Thrifter
Thrifter operates as a marketplace facilitator, a platform that enables transactions between third-party buyers and sellers and bears legal responsibility for collecting and remitting applicable sales tax on those transactions. This is consistent with marketplace facilitator laws enacted across the majority of U.S. states.
Tax is collected from buyers at the point of checkout, calculated based on the buyer's shipping destination. Thrifter, through its payment processor Whop, remits the collected tax to the relevant state tax authority on the seller’s behalf and buyers are responsible for paying. Sellers on Thrifter are not responsible for collecting or remitting sales tax on platform transactions.
2. Transition from Flat-Rate Tax to State-by-State Rates
Thrifter previously applied a uniform 6% flat tax rate to all transactions, regardless of the buyer's state. This approach, while administratively simple, did not reflect the actual tax obligations in each jurisdiction and created compliance exposure as Thrifter's transaction volume and geographic reach expanded.
Effective March 12, 2026, Thrifter is replacing the 6% flat rate with a state-by-state rate structure based on the combined state and average local sales tax rate applicable to clothing and apparel in each jurisdiction. Key changes include:
Destination-based taxation: Tax is calculated based on the buyer's shipping address, not a uniform rate.
Exemption and threshold compliance: States with clothing exemptions or per-item price thresholds (e.g., New York, Massachusetts) will now have those rules applied correctly at checkout.
Zero-tax state handling: Transactions shipped to Delaware, Montana, New Hampshire, and Oregon will collect $0 in sales tax.
Tax holiday support: Thrifter will automatically apply applicable tax holiday exemptions for qualifying transactions during designated holiday windows.
3. How Tax Is Calculated at Checkout
When a buyer submits an offer on Thrifter, the tax engine calculates the applicable sales tax based on the following inputs:
Destination state and locality: The buyer's shipping address determines which state and local rates apply.
Item price: In threshold states, tax is assessed per item. A single order containing multiple items may have some items taxed and others exempt depending on individual item prices.
Product category (tax code): The item's assigned tax code tells the engine what category of product it is (e.g., general clothing vs. accessory vs. fur), which determines eligibility for exemptions in states where only certain clothing types are exempt.
Transaction date: If the transaction falls within a state's designated tax holiday window, the applicable exemption is applied automatically.
Tax is calculated on the total purchase price including shipping, as required by applicable state law. Thrifter collects the tax from the buyer at checkout and remits it to the relevant state authority through Whop.
4. Tax Codes
Tax codes are standardized alphanumeric identifiers assigned to product categories that instruct the tax engine on which rules to apply in each state. Rather than Thrifter's system needing to individually encode every state's clothing rules, a tax code acts as a lookup key — the engine maps the code to the correct exemptions, thresholds, and rates for each jurisdiction automatically.
For example, a general clothing item and a fur coat may carry different tax codes. In Minnesota, the general clothing code would trigger an exemption, while the fur coat code would trigger full taxation, consistent with Minnesota's rule that general clothing is exempt but luxury items are not.
Tax codes used on Thrifter are defined by and configured within Whop's tax engine. The specific codes to be applied to Thrifter's product categories; including general clothing, footwear, accessories, luxury/fur items, and sportswear; are currently being confirmed with Whop as part of the platform's payment infrastructure migration.
ACTION REQUIRED: Tax code assignments for Thrifter product categories are pending confirmation with Whop. This section will be updated once the Whop integration is finalized. Until then, the platform will apply category-level defaults as configured in Whop's tax engine.
Once confirmed, the tax code mapping for Thrifter's primary product categories will be documented here, including the code identifier, the category it covers, and any state-specific behavior triggered by that code.
5. Definitions
The following terms are used throughout this document.
Combined Rate: The total tax rate applied to a transaction, equal to the state sales tax rate plus the average local (city/county) rate for that state. Actual local rates may vary by specific delivery address.
Exempt: A tax-exempt item or transaction is one on which Thrifter collects $0 in sales tax. Exemption does not necessarily relieve the buyer of all tax obligations under their state's use tax laws.
Threshold: A per-item price point above which sales tax applies. Thresholds are evaluated per item, not per order. For example, in New York, a $120 item is fully taxable even if other items in the same order are under $110.
General Excise Tax (GET): A Hawaii-specific tax applied to all business gross receipts, including retail clothing sales. Unlike a traditional sales tax, GET is technically a tax on the seller but is commonly passed through to the buyer.
Gross Receipts Tax (GRT): Used in New Mexico instead of a traditional sales tax. GRT is levied on the total receipts of a business, including clothing sales, and is effectively passed on to the buyer at checkout.
Tax Holiday: A state-designated period during which certain items — typically clothing and school supplies — are temporarily exempt from sales tax. Holidays are date-specific and subject to per-item price caps. Thrifter will apply the applicable exemption for transactions shipped during a qualifying holiday window.
Tax Code: A standardized alphanumeric identifier assigned to a product category that tells the tax engine which rules to apply in each state. Tax codes ensure that exemptions, thresholds, and special rules are applied correctly and automatically at checkout.
Marketplace Facilitator: A platform that facilitates sales between third-party buyers and sellers and is legally responsible for collecting and remitting sales tax on those transactions. Thrifter operates as a marketplace facilitator in states that have enacted marketplace facilitator laws.
Remittance: The process by which Thrifter, through Whop, pays collected sales tax to the relevant state tax authority on behalf of buyers.
6. Sales Tax Rates by State & Territory
* Combined rate = state rate + average local rate.
State / Territory
Combined Rate*
Notes on Clothing Tax
Alabama
9.22%
No exemption; taxed like general merchandise.
Alaska
1–7% (local only)
No statewide sales tax. Over 100 local taxing authorities may impose 1–7% on clothing. Thrifter applies $0 state tax; local rates may vary by destination.
Arizona
8.40%
Full taxation, no clothing carve-outs.
Arkansas
9.47%
Taxable, though some cities cap local rates on essential clothing.
California
8.68%
All apparel is taxable; no thresholds.
Colorado
7.42%
Taxed at state + local rates; no clothing exemption.
Connecticut
6.35%
All garments taxable, incl. children's clothing. Dress and footwear are taxed irrespective of price.
Delaware
0%
No statewide sales tax. Thrifter will collect $0 in sales tax for transactions shipped to this state.
Florida
7.05%
Taxable; some local festivals grant temporary holidays.
Georgia
7.31%
All apparel taxed; occasional local holiday exemptions.
Hawaii
4.44%
General Excise Tax (GET) is all-encompassing, applying to all business receipts including retail sales of clothing.
Idaho
6.03%
Taxable; grocery-like credits do not apply to clothing.
Illinois
8.83%
Full sales tax on clothes; children's exemption repealed.
Indiana
7.00%
All clothing taxable.
Iowa
6.94%
None
Kansas
6.88%
No general clothing exemption; local options vary.
Kentucky
6.00%
All clothing taxable; schools receive clothing voucher relief programs.
Louisiana
9.55%
No broad clothing exemption; accessories taxed.
Maine
5.50%
Taxable; uniform statewide clothing taxation.
Maryland
6.00%
Taxable, though some non-profits obtain exemption certificates.
Massachusetts
6.25%
Clothing priced at $175 or less per item is exempt; items above this threshold are fully taxable.
Michigan
6.00%
Men's, women's, and children's clothing taxed.
Minnesota
6.88%
Clothing is generally exempt under state rules; furs, accessories, and athletic equipment remain taxable.
Mississippi
7.07%
Applies to general clothing with no carve-outs.
Missouri
8.30%
No clothing exemption; occasional holiday relief.
Montana
0%
No statewide sales tax. Thrifter will collect $0 in sales tax for transactions shipped to this state.
Nebraska
6.94%
Federal Indian reservations: variable exemptions.
Nevada
8.23%
Taxable; local rates apply to apparel.
New Hampshire
0%
No general sales tax. Thrifter will collect $0 in sales tax for transactions shipped to this state. Some local meals & rental taxes may apply.
New Jersey
6.63%
Most clothing exempt with no price limit (all ages).
New Mexico
7.79%
Gross Receipts Tax (GRT) system; all clothing is taxable. GRT applies to total business receipts rather than a traditional sales tax.
New York
8.52%
Clothing and footwear under $110 per item are exempt; items above this threshold are fully taxable.
North Carolina
6.98%
Taxed; occasional local tax holidays.
North Dakota
6.85%
Clothing taxed; accessories often included.
Ohio
7.20%
All apparel is taxable; occasional local holiday.
Oklahoma
8.95%
Taxable; tribal compacts may alter local rates.
Oregon
0%
No sales tax. Thrifter will collect $0 in sales tax for transactions shipped to this state.
Pennsylvania
6.34%
General clothing is exempt. Furs and sporting goods are excluded from the exemption and remain taxable.
Rhode Island
7.00%
Clothing items at $250 or less per item are exempt; items above this threshold are fully taxable.
South Carolina
7.46%
All apparel is taxable; limited holiday relief.
South Dakota
6.40%
Clothing taxed; among the lowest local variance.
Tennessee
9.55%
All clothing is taxable; senior citizens' exemption programs exist.
Texas
8.19%
Taxed; some natural disaster relief days.
Utah
7.19%
All clothing taxable.
Vermont
6.24%
Clothing is exempt; accessories and sports gear are excluded from the exemption and remain taxable.
Virginia
6.30%
Taxable; some local holidays.
Washington
9.41%
All apparel is taxable; no threshold.
West Virginia
6.40%
Taxable; occasional local relief days.
Wisconsin
5.44%
Taxable; holiday exemptions may apply.
Wyoming
5.34%
All apparel is taxable; some counties have no local tax.
District of Columbia
6.00%
Taxable; no threshold.
7. 2026 Sales Tax Holidays: Clothing & Apparel
During the dates below, qualifying clothing items under the per-item cap are temporarily exempt from sales tax. Thrifter will apply the applicable exemption automatically for transactions shipped within a qualifying holiday window. Caps are evaluated per item, not per order.
State
2026 Holiday Dates
Exemption Cap (Per Item)
Alabama
July 17-19, 2026
$100/item
Arkansas
August 8-9, 2026
$100/item
Connecticut
August 16-22, 2026
$100/item
Florida
August 1-31, 2026
$100/item
Iowa
August 7-8, 2026
$100/item
Maryland
August 9-15, 2026
$100/item
Massachusetts
TBD
TBD
Mississippi
July 10-12, 2026
$100/item
Missouri
August 7-9, 2026
$100/item
New Mexico
July 31-August 2, 2026
$99.99/item
Oklahoma
August 7-9, 2026
$99.99/item
South Carolina
August 7-9, 2026
None
Tennessee
July 31-August 2, 2026
$100/item
Texas
August 7-9, 2026
$100/item
Virginia
August 1-3, 2026
$100/item
West Virginia
August 7-10
$125/item
Additional Notes
*Combined rate = state rate + average local rate.
Zero-tax states: Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax. Thrifter will collect $0 in sales tax for transactions shipped to these states.
Alaska has no statewide sales tax but over 100 local taxing authorities may impose rates of 1–7%. Thrifter applies $0 state tax for Alaska-bound transactions; local rates may apply depending on destination.
For inquiries regarding tax rates, exemptions, or holiday windows, contact us at official.thrifter@gmail.com.
Disclaimer: Tax rates are subject to change. Thrifter will update this document periodically to reflect legislative changes, updated holiday schedules, and confirmed tax code assignments. This document does not constitute legal or tax advice. Users with specific tax questions should consult a qualified tax professional.