August 11, 2017

As budget deficit grips state, ‘tax-free’ week will cost CT $4.1M

PHOTO | HBJ File
PHOTO | HBJ File
Kevin Sullivan, commissioner of the Department of Revenue Services.

As Connecticut promotes "tax-free week" for the 17th year, state officials estimate the weeklong freebies will cost the state about $4 million this year -- at a time when the state's budget is a month-and-a-half overdue and deep in red ink.

Tax free week -- a bonus for taxpayers enabled by state statute -- allows consumers to forego paying the state's 6.35 percent sales tax on clothing and footwear priced under $100. This year, tax-free week runs from Aug. 20-26. It was originally intended to help shoppers with children heading back to school in the fall.

In promoting the tax-free week on the Department of Revenue Services website, Commissioner Kevin B. Sullivan identifies about $4.1 million in revenue the state would not collect as a result of the week-long promotion. For retailers, he said, "the economic boost more than makes up for the sales tax holiday."

Without a budget since July 1, state Democrats have pushed for a possible sales tax increase to help Connecticut climb out of its deficit. One version of the Democratic plan included increasing the sales tax to 6.99 percent from 6.35 percent as a way to aid cities and towns, but Democrats and the Connecticut Conference of Municipalities have continued to debate how to achieve that end.

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