Paying tax on a yard sale

I just read a piece in our local town website where the mayor posted updates on last night's city council meeting. The city voted to repeal requiriments for city residents to obtain a free yard sale permit. (there was no charge for it, and the city was tired of spending efforts on something they werent' making any money on). However, the mayor noted that in the city, sales tax was required to be paid by anyone who had a yard sale and that the city was going to 'start' enforcing this.
I guess I had the idea that tax was collected out of funds that were PROFIT. So if I bought a toy for 10$ and sold it for $1, where did I MAKE money, and why do I owe tax?????
And does anyone see any way OUT of this or how to get around it?

How nuts is THAT!?
I am furious!