The income made by selling items at a flea market must be reported as taxable income if profit was made, according to H&R Block. If the item is sold for more than the original purchase price, that profit is considered a capital gain that needs to be claimed.
Rules for state and local taxes vary, notes the Small Business Administration. Federal tax rules generally require that profits earned from events such as flea markets be reported as income on an individual's federal tax return.
The IRS distinguishes between the casual seller, hobbyist and business, explains H&R Block. Sales at flea markets are treated differently depending on the classification for tax purposes.