Preserving Your Right to Shop Tax Free

Tax Free Week is around the corner.  In Connecticut that means open season for shoppers now more than ever.

The state’s first sales tax holiday was 11 years ago.  The sales tax free shopping week Sunday, August 19 through Saturday, August 25, is an opportunity for families and individuals to save some money.  Many parents use it to outfit their children for the school year. In the tough economic climate we live in, this holiday is greatly appreciated. 

The seven-day holiday exempts clothing and footwear priced under $300 from the sales tax. According to the Department of Revenue Services special clothing or footwear primarily designed for athletic activity or protective use, accessories, and jewelry do not qualify. This year’s Sales Tax Holiday is projected to save shoppers as much as $7.2 million.

After living through one of the largest tax increases in state history this year’s holiday will be a huge relief. But make no mistake, this incentive was about to be pulled off the books.

In his first year, the governor proposed the elimination of the tax free week because he needed the money to pay the debt his democrat majority racked up.  But with the encouragement of Republican leaders the general assembly decided to keep the tax free holiday. What happened next in Hartford still causes people to gasp.

The governor increased taxes by $2.6 billion over two years!  It is the largest hike in Connecticut history.

Personal income tax rates went up, personal property tax credits were sliced and the sales tax went up from 6% to 6.35%.  The largest criticism of the governor’s income tax increase was that it was applied retroactively to the beginning of the calendar year 2011.  Taxpayers saw large amounts of money come out of their paychecks and the Department of Revenue Services was inundated with collection complaints.

Middle class residents who once enjoyed a tax break for owning and paying municipal taxes on a home or a car will now see that credit go down dramatically. At the minimum it will mean those families pay $200 more in taxes yearly.  A Republican proposal would have restored the credit to the full $500. Instead the Democrat majority voted to keep it at $300.   

In addition to the sales tax going up the Democrat majority eliminated 13 different sales tax exemptions, meaning you will now pay more for many things including the following:

• Pet grooming services
• Cosmetic surgery
• Non-prescription drugs
• Clothing and footwear under $50

As we approach that tax free shopping week, remember that the sales tax is applied to merchandise after the use of any coupons or discounts.  So start clipping.

And remember to thank a Republican lawmaker for protecting your wallet. 

For answers to questions about the Connecticut Sales Tax Holiday Week, DRS has posted details on its website at www.ct.gov/drs.