In collaboration with a coalition of its member companies, American Circular Textiles (ACT)has launched a nationwide petition to eliminate double taxation on second-hand goods, repairs, and alterations. This initiative is a significant move to raise awareness about the unfair financial burden placed on consumers who choose sustainable and affordable shopping alternatives.
Currently, many states across the US impose sales tax on second-hand items, including clothing, shoes, and accessories. This practice results in double taxation, as consumers are taxed both at the initial point of sale and again when these items are resold. Critics argue that this policy discourages eco-friendly shopping habits and stifles the growth of the second-hand market, repair options, and the broader circular economy, according to a press release from ACT.
An estimated 85 per cent of used clothing ends up in landfills or incinerators, much of which could be resold or repurposed. By taxing second-hand items, states inadvertently contribute to this waste problem, hindering efforts to promote sustainable consumption.
Several of ACT's prominent members and affiliates are participating in this campaign, including America's Best Cleaners, Arrive Recommerce Inc, Fashionphile, Project Repat, Sortile, ThredUp, Vestiaire Collective, and unspun.
Consumers’ monthly expenditure on apparel and footwear has surged by a staggering 72 per cent since January 2020, leading more shoppers to turn to second-hand options. Ending double taxation will stimulate economic growth and support the trend of purchasing well-made clothing that can be reused and repaired, rather than discarded into growing piles of apparel waste,says Rachel Kibbe, CEO and Founder, ACT.
“Eliminating double taxation on second-hand goods not only fuels the circular economy but also empowers consumers to make sustainable choices. It's a clear win for the future of fashion and for taxpayers who want to do the right thing," adds AlonRotem, Chief Legal Officer, ThredUp.
