From ponchos to socks, a variety of clothing and footwear items under $100 were exempted from the sales and use tax last week as part of Connecticut’s weeklong sales tax holiday.
According to Gov. Ned Lamont SOM ’80, Connecticut’s annual weeklong sales tax break is intended to support working families’ purchases during the busy back-to-school season and promote local businesses by increasing purchasing power of Connecticut consumers. This initiative, incorporated in Connecticut’s biennial budget plan and signed into law by Lamont, is expected to have saved Connecticut consumers a combined $4.9 million.
“Having this tax-free holiday helps working families stretch their dollar a little bit more during the busy back-to-school season,” said Lamont. “I also encourage residents during this busy shopping week to consider locally owned retailers and supporting Connecticut’s small business community.”
Usually taking place at the end of August, the tax holiday occurs during the week before the start of the academic year — one of the busiest weeks for state consumer purchases.
“Connecticut’s sales tax-free week helps working families across our state pay for back-to-school supplies and save on other necessities. It’s also a great opportunity to support local businesses, which contribute so much to our economy,” said Eli Sabin ’22, candidate for Ward 1 alder and longtime New Haven resident.
State tax policies vary widely — certain states are entirely exempt from sales tax at all times of year, while others do not participate in any form of tax holiday. Last year, Massachusetts voted to make the tax holiday a permanent annual occurrence, while Wisconsin, after holding its first tax holiday last year, announced that it has no plans to repeat it.
Other states that participated in sales tax holidays in August included Maryland, Florida and Virginia, exempting clothing, shoes and school supplies from state sales taxes.
While remaining a popular practice around this time of year, the policy draws mixed responses. Skeptics suggest that the largest beneficiaries of the tax exemptions are politicians and large retailers, since state-endorsed tax holidays effectively function as free advertising that targets a large group of potential consumers.
According to the Tax Foundation, participation in statewide sales tax exemptions merely shifts the timing of purchases to the particular week of the tax break without actually increasing consumer spending overall.
Some local residents voiced dissatisfaction that the tax exemption did not do enough for Connecticut families. Michelle Gary, an employee of the Branford College dining hall, said that the holiday was not long enough and that the restrictions on certain items limited her purchases.
The Connecticut state sales tax rate is 6.35 percent.
Viola Lee | kyounga.lee@yale.edu