Is it okay to take donations to open a thrift shop?

Teresa

I do it a lot but only to shops run by churches or shelters.

There is nothing illegal in taking clothing donations from people willing to help you out in your new business. However it is illegal for anyone to try to take a tax write off for their donation. You must make them aware that this is to help you out and your business is a "for profit" enterprise.

You can make a "donation" to any charity group that is approved by the IRS iether by official letter of determination or by being exempt such as churches under the 501C regulations.

You can not "donate" things to a for profit business. Now people can give you things to sell and give them to you free, but you have to be very clear, that you are not a charity, and they are getting no tax credit for this.

Now you will find that some of the major Goodwill and Salvation Army sties actually have sales or auctions of excess items, and also sell bundles of clothers ( these are bales that are compressed by a big machine of assorted clothes)

Also you will normally find local auction houses that have a lot of excess itmes ( boxed items) where the entire box of items sell for one or two dollars, ( this is where a lot of resale shops get their items they sell, we have three such auctions each have two sales a week, within 15 miles of my house.

Also you go by people having a yard sale on the last day for their sale, toward time to close up and offer them a price for everything they have left.

Also depending on what country you are in, and if in the US what state, as to if you can legally call your store a "thrift" store also. In some areas this name denotes a charity where the money paid for the items is going to be used for a non profit group. So you will see other names such as re-sale, yard sale, pre-owned or other name.

Fr Chuck, excellent suggestions about where she can pick up things at a discounted price! But, you forgot the most important one! Church Rummage Sales! Some of them have these $1 "grab bags". They take the clothes and place them into large clear bags and you get the whole bag for $1.