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Tax-Free Week: A Boon or a Bust?

The temporary suspension of sales tax for retail purchases is a mixed bag.

Tax-free week was started in 2000 as a way to bolster Connecticut business. As it passed last week, local retailers provided mixed reviews.

The week fell between Aug. 21 and 27 this year and included the elimination of sales tax on individual purchases of clothing and footwear under $300. Revenue Services Commissioner Kevin Sullivan said this year's levy holiday could save shoppers as much as $7.2 million. That incentive, while nice, didn't appear to be a strong motivator.

"I don't think my customers' buying habits have changed all that much," said Patricia Agranoff, owner of . "No one has really mentioned tax-free week and I don't see an increase in traffic."

Agranoff pointed to the back-to-school rush typical of this time of year as having buyers already excited. She conceded that, as a consignment shop, her store's low prices may afford buyers all the reason they need to patronize her business, as well.

Other retailers, however, had demonstrably positive results sans tax.

"It definitely affected us here, yeah," said Jack Coutts, manager of the in Brookfield. "Obviously we have back-to-school season, so that's the main draw. But a lot of people do wait for the tax-free week to get that extra 6.35 percent. The visits definitely increased in the last three days, and Sunday was pretty good also."

Coutts said he had a number of people coming in to buy multiple pairs of $100+ running shoes. They were happy with the savings they accrued as a result of the sales tax elimination, and a few even cited it as the reason they'd come in. But was it the chief reason for most of the shopping?

"Some people know about it but a lot of people don't," Coutts said. "The state doesn't advertise it [well enough]...back-to-school season definitely helps it. I don't know if it would have as big an effect without it."

"Of course it helps," said Selma Frohm of in Middlebury. "We're in such dire straights with our economics in the state of Connecticut. Anything that the governor can do to save someone a dollar is a great thing. People are out actually shopping and it saves a lot of money for families that have multiple children." 

Despite her enthusiasm, Frohm conceded that tax-free week didn't appear to have push her clientele to shop more.

"Business wasn't necessarily busier than usual last week," she said. "But that's really because we tend to be busy all the time." 

It is the state economy Frohm mentioned that may also have lessened tax-free week's impact. During lean times, retail purchases are almost always one of the first things to go. 

"Right now, business is really, really slow," said Cleantes Xavier, who runs in Danbury with his wife. "Right now, about 80 percent of our customers have gone back to Brazil. And the rest are going back by the end of the year because that country is doing very good. And this country is doing very bad."

barbara August 29, 2011 at 10:53 AM
The rest of the year we pay tax on items over $50 EACH. During tax-free week we don't pay tax on each item up to $300. How many parents often spend more than $50 on ONE clothing item for their child? I certainly don't. Tax-free week doesn't benefit me at all. I think it's a tax break for the wealthier among us. If they can afford to spend $300 on one clothing item for their child I think they can afford the tax.
Alene Lofink August 29, 2011 at 11:13 AM
@barbara. Since the new tax law in CT went into effect 7/1, there is now tax on all clothing items, not just those items costing more than $50. During tax-free week, we all benefit because no tax is paid on any clothing item (except for those individual items costing $300 or more).
barbara August 29, 2011 at 11:23 AM
Thanks for clarifying, Alene. That would translate to greater savings. It was in previous years before the new tax law that I found tax-free week ridiculous. I wish I had known there was now tax on items up to $50 each, I would have taken advantage of tax-free week!
Stephen C. Brown August 29, 2011 at 01:31 PM
The fact that the economy is worse and even more folks are squeezed seems to give more merit to this idea. Folks get a discount and some increased commerce props the econ - even a little. Wont save us but is just as good as saving 20 cents on gas. I've waited in line for less.
Jessica August 29, 2011 at 04:12 PM
I took advantage this year because the tax law changed. I saved about $20. That's half a tank of gas...

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