Connecticut gears up for 15th annual sales-tax-free week

State Revenue Services Commissioner Kevin B. Sullivan (file photo)

CTMirror.org Fil Photo

State Revenue Services Commissioner Kevin B. Sullivan

Connecticut consumers will look to save an estimated $7- $9 million starting Sunday and running through Saturday, Aug. 23, as the state offers its 15th annual sales-tax-free week.

The annual promotion, which began in 2000 amid record-setting budget surpluses, waives sales tax on all clothing and footwear items costing less than $300.

“I think it’s still a neat opportunity,” Department of Revenue Services Commissioner Kevin B. Sullivan said Monday. “It certainly draws people into the stores.”

Merchants also have begun to better market their own promotions to highlight the sales-tax-free week, Sullivan said.

University of Connecticut economist Fred V. Carstensen, who heads the Connecticut Center for Economic Analysis, said this marketing is crucial as consumers get used to the sales-tax-free week as a regular, annual occurrence.

“People know it’s going to happen, so they defer purchases,” Carstensen said, adding this limits the event’s capacity to stimulate the economy. “There’s really only a slight incremental growth in consumption,” he said.

Clothing and office supplies stores in particular have maximized their business by arranging back-to-school promotions in conjunction with the sales-tax-free week, aid Bonnie Stewart, executive vice president and tax specialist for the Connecticut Business and Industry Association.

“Businesses are looking for that peg, something to get that extra opportunity,” she said. “Having that sales-tax-free week makes a big difference. It is something (the businesses) really rely on.”

The exemption does not extend to certain clothing and footwear items designed for athletic activity or special protective use. Jewelry, handbags, luggage, watches and similar accessories also are not covered.

Further information about the program can be obtained at the department’s website.

The event has been particularly popular since 2011, when legislators and Gov. Dannel P. Malloy canceled the regular sales tax exemption on clothing items costing less than $50.

That exemption is slated to return next July. But with nonpartisan analysts saying a 7 percent shortfall – nearly $1.4 billion – is built into the 2015-16 fiscal year, some have questioned whether officials will delay that tax relief after the November elections.

Legislators and Gov. John G. Rowland launched the first sales-tax-free week in 2000 after the state closed its third successive fiscal year with a budget surplus at or above $500 million.

And while the state has emptied its fiscal reserves in two recessions since then, it has continued to offer the program each August.

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