Watch dealing in Texas: licensing, records, and tax

Summary

Texas has no general "secondhand dealer" license. The state regime that comes closest — the crafted precious metal dealer rules in Occupations Code Chapter 1956 — is aimed at scrap and melt buyers, not at dealers who trade watches for their market value. An item that sells at 105% or more of its scrap value is excluded from the definition of "crafted precious metal," so a legitimate watch dealer buying and selling whole watches is likely outside it. Sales and use tax applies statewide regardless. Local secondhand-dealer ordinances can add city-level requirements.

The crafted-precious-metal question

Chapter 1956 defines a "crafted precious metal" as jewelry, silverware, an art object, or another object made wholly or partly of precious metal for personal use — but not "an item selling at 105 percent or more of the scrap value of the item" (§ 1956.001). Luxury and vintage watches trade far above their metal melt value, so on their face they fall within that exclusion. A dealer who buys and sells watches for what they're worth as watches — rather than for the gold in them — is therefore likely not a "crafted precious metal dealer," and outside the registration and reporting regime below. This is a fact-specific reading and is flagged for an attorney.

Two things narrow it further: the rules only reach items made wholly or partly of precious metal, so all-steel or titanium watches are outside Chapter 1956 entirely; and the statute's own "jewelry store" definition (a retailer earning 75%+ of revenue from adornment items, watches included) signals that established jewelers are treated differently from scrap buyers.

If you are a covered dealer

A dealer who is covered — someone buying precious-metal goods at or near scrap value — must:

• Register with the Consumer Credit Commissioner (the OCCC) as a dealer, listing each business location and paying a per-location processing fee (§ 1956.0612).
• Report each purchase: take a signed list of the items and the seller's name, address, and driver-license number, and mail or deliver a copy to the municipal chief of police (or the county sheriff if outside a police-department municipality) within 48 hours (§§ 1956.062–1956.063).
• Retain the item, unaltered, until the 11th day after the report is filed, unless a peace officer authorizes earlier disposition or the dealer records the buyer's name and address (§ 1956.064).

Sales and use tax

A business selling tangible personal property at retail in Texas needs a Sales and Use Tax Permit from the Comptroller before making taxable sales; the permit is free to apply for. The rate is 6.25% state plus up to 2% local (8.25% maximum). Out-of-state sellers cross Texas's economic-nexus safe harbor at $500,000 in Texas revenue (effective 2019), and marketplace providers over that threshold collect and remit tax on their sellers' Texas sales — so sales through a large marketplace are generally the marketplace's responsibility.

Business registration

Form an LLC or corporation by filing a Certificate of Formation with the Texas Secretary of State — the LLC filing fee is $300 (Form 205). If you operate under a name other than the entity's legal name, file an assumed-name certificate.

City rules

Chapter 1956 preserves local law: a Texas city may impose its own secondhand-dealer permit, police reporting, or holding rules on top of the state regime (§ 1956.003). Check your city — city pages are being added.