ThredUp Joins 68-Group Coalition to Slash VAT and Sales Tax on Resale Goods
TDUP•ThredUp joined 67 other groups, including H&M and Primark, urging EU to cut VAT and the US and Canada to eliminate sales taxes on resold items and reduce labour taxes, aiming to unlock a multi-billion-dollar circular fashion economy. The coalition highlights that repeated-transaction tax burdens currently hinder resale firms’ competitiveness and growth.
1. Coalition Formation and Participants
ThredUp is one of 68 organisations, alongside H&M, Primark, Vinted and the American Apparel & Footwear Association, that launched a joint statement highlighting circular fashion’s economic opportunity but warning that current market and tax structures favour virgin production over resale and repair.
2. Key Policy Demands
The coalition calls for reduced VAT across the EU, eliminated sales tax in Canada and the US on resold goods and repair services, plus reduced labour taxes or labour tax credits for workers in resale and repair operations to remove economic barriers to scaling.
3. Impact on Repeated-Transaction Tax Burden
Members argue that taxing each resale transaction diminishes incentives to keep garments in circulation, inflating costs for businesses like ThredUp and limiting consumer access to second-hand options.
4. Potential Market Opportunity
The groups estimate circular models represent a multi-billion-dollar opportunity, with policy reforms expected to boost revenue and market share for resale platforms, improve sustainability outcomes and enhance consumer choice.
