Connecticut’s 18th annual Sales Tax Free Week began on Sunday and will continue through Aug. 25; that means that shoppers can purchase any item of clothing or footwear priced under $100 without paying the state’s 6.35% retail sales tax. Held each year during the third week of August, the tax holiday provides big incentives for families doing their back-to-school shopping and helps drive more business to Connecticut’s retailers.
There are no limits to the number of tax-free items an individual can purchase, and sale items will also remain tax free so long as their discount leaves the final price below $100. According to the Connecticut Department of Revenue Services (DRS), shoppers are expected to benefit from approximately $4.8 million in sales and use tax savings during the state’s annual sales tax holiday.
“Sales Tax Free Week has become an anticipated tradition in Connecticut, offering savings on a variety of clothing and footwear purchases at a time of year when families do their back-to-school shopping,” said DRS Commissioner Scott Jackson said in a statement. “Sales Tax Free Week is a great platform to promote Connecticut’s retail sector, and an opportunity for shoppers to take advantage of savings and incentives.”
Tax-free week can bring benefits to local business as well, motivating customers to make the trip to a brick and mortar shop instead of shopping online. Though many online retailers neglect to charge their customers for sales tax, residents are expected to self-report and pay with their annual taxes. DRS estimates that at least $70 million in sales tax due for online and out-of-state purchases goes unpaid each year.
Last year DRS announced that the state would reinvigorate its efforts to hold online and out-of-state retailers accountable for unpaid sales tax. The department began working with major online retailers to review the purchase history of Connecticut residents and issued a number of bills asking residents to pay the appropriate tax on purchases made between 2014 and 2016.
Part of the goal is to help make sure that local businesses remain viable in a retail market that has grown increasingly unpredictable. Local shoppers can do their part by supporting community business year round and tax free week is a perfect place to start.