Tax free week still beneficial despite low threshold
Published 9:10 am, Wednesday, August 31, 2016
DARIEN — Last week, shoppers all over the state got a break on their back to school clothing and shoe purchases under $100 thanks to tax-free week. But it was only two years ago that buyers were able to receive no tax on clothing purchases up to $300.
“The threshold has been lowered a couple times recently and it’s a bit of a mixed bag for us,” said Tim Phelan, president of the Connecticut Retail Merchants Association. “We would certainly like a higher overall exemption level, but we have to be realistic and aware of the economic times we live in. The fact they’ve kept tax free week on the books, it’s a good thing. Though we’re disappointed, that’s not to say that we’re not grateful that the existing holiday is in place today.”
Phelan said some states, like Massachusetts, have had to cut their annual tax free holidays this year due to budget constraints. Despite the lowering tax free threshold on everyday clothing purchases, as well as purchases made during tax free week (Connecticut previously didn’t tax any clothing purchases under $50), retailers across the state are grateful to have week at all.
“It definitely still helps,” said Phelan. “The feedback we received from retailers is that they want the tax free week. Every year they build it into promotional schedule. Consumers look forward to it and we don’t want to lose it.”
Consumers seem to agree. Local business owners said that they saw a slight increase in business last week, due in part to tax-free week.
“We had a very nice little uptick in business,” said Jo Schoepfer, manager of the Brooks Brothers in downtown Darien. “Tax free week offers consumers a nice incentive to stock up on a lot of necessities and it lines up with back to school. I don’t think they came in looking to shop under $100, but it gave them incentive to buy things they wouldn’t have bought otherwise.”
Schoepfer said she would like to see a higher threshold for tax-free week, but said as long the week continues to coincide with back-to-school, she thinks her business will see the benefit.
“I love that it coincides with back to school,” she said. “So as long as it’s kept around this time of year, any opportunity for people to save money is appreciated.”
But the future of tax-free week remains uncertain with the state’s teetering budget.
“There’s a loss to the state with sales tax free week, a certain monetary loss,” said state senate majority leader, Bob Duff. “It’s part of an overall budget process where you want to make sure revenue meets expenditures and we’re also funding other critical initiatives that people rely on.”
Duff said it’s also important for retailers and shoppers to remember that Connecticut is one of a few states when it comes to giving consumers a tax break.
“There’s been an effort to not have it repealed and I’ve been successful with that,” he said. “It’s important for people to know Connecticut is in a minority of states who have sales tax free weeks.”
Duff himself as the father of two young boys said he’s benefited from the week, despite the $100 limit. He said he’s also still always working to raise the threshold.