Connecticut drops sales tax next week

August means back-to-school shopping, and once again, many items of clothing and footwear can be purchased without paying Connecticut sales tax during tax-free week, from Sunday, Aug. 20 to Saturday, Aug. 26.

The event is now in its 17th year.

During the sales tax holiday week, most individual items of clothing and footwear priced under $100 are exempt from Connecticut sales tax. For items costing $100 or more, sales tax is calculated on the full purchase price.

Retailers typically add promotional pricing, as well, Department of Revenue Services Commissioner Kevin B. Sullivan said in a press release.

“Just as important, retailers will add promotional inducements such as discounts, so there’s a price savings plus a tax savings and the ability of consumers to upscale their purchases. While the price of an item may start above the $100 taxable threshold, after discounts are applied, it could drop to less than $100 and is not subject to sales tax that week,” Sullivan said.  

Retail sales are an important part of the economy, including the jobs involved. While the research is mixed on whether there is actually more business done over time due to sales tax holidays, it’s a helpful way to promote retail shopping — all of which employ people that support the sales,” said Sullivan. “The economic boost more than makes up for the sales tax holiday.”

This year, the state expects about $4.1 million in sales and use tax exemptions during the August sales tax holiday week.