House of Prayer Overseer Gary Barnett was shocked to learn his Johnson City church technically broke the law last week. The small, non-denominational church located along Milligan Highway routinely holds yard sales to make money for charity. On average, Barnett says the sales bring in anywhere from $100 to $300.
"We've helped people on their power bills," Barnett said. "We've helped people that have lost somebody in their family."
The House of Prayer held its third sale of the year last week, like always in the church parking lot. The next day, Barnett says a state tax enforcer came calling.
"I said, 'you mean the church has to collect tax from the garage sale,'" Barnett recalled. "He said, 'yes, write down everything and charge them tax.'"
Aside from just a couple of exceptions, according to Tennessee law, even tax-exempt charities are only allowed to hold two tax-free yard sales a year. If a person or charity wants to hold three or more, they are required to collect sales tax for every purchase.
"It seems like that when you give or try to help somebody, that they're trying to come in and trying to interfere with that," Barnett siad.
Still, this isn't a new law. The Tennessee Department of Revenue is the agency responsible for enforcing the law. However, the state says it doesn't necessarily police people and their yard sales. Instead, it relies on complaints.
It's unclear if a complaint led to the situation at the House of Prayer. Regardless, Barnett hopes the state will let this one mistake slide, especially since profits from its yard sales are going to people in need.
For more information about Tennessee's yard sale rules, call the State Department of Revenue at (800) 342-1003.
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