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Connecticut Sales Tax Holiday

  • Aug 16, 2012 | Susan McLain

As of July 1, 2011, all clothing and footwear became subject to the general sales tax rate of 6.35% in Connecticut.

In addition to no regular exemption for clothing and footwear, there is a higher sales tax rate applied to articles of clothing or footwear that costs more than $1,000 per item (7%).

The Connecticut Sales Tax Holiday occurs “…from the third Sunday in August through the following Saturday….”

This year, that means Sunday, August 19th through Saturday, August 25, 2012. During this week, clothing and footwear costing less than $300 is excluded from sales tax. This “…one-week exclusion applies to clothing sales made by Connecticut and out-of-state retailers to Connecticut customers.”  If an item costs more than $300, sales tax applies to the total price of the item.

What’s Exempt, What’s Not

According to the Connecticut information publication, “…most articles of clothing and footwear intended to be worn on or about the body,” are exempt from sales tax during this time period except the following:

  • Any special clothing or footwear primarily designed for athletic activity or protective use that is not normally worn except when used for the athletic activity or protective use for which it was designed.
  • Jewelry, handbags, luggage, umbrellas, wallets, watches, and similar items carried on or about the human body but not worn on the body in the manner characteristic of clothing, and
  • Articles of clothing considered safety apparel are fully exempt under a separate exemption in Conn. Gen. Stat. §12-412(91). (See Policy Statement 2000(6), Sales and Use Tax Exemption for Safety Apparel).

Special Situation Rules

Cash Discounts – If a discount is offered on an item of clothing or footwear, the final total sales price after discount is used to qualify the item for sale. For example, a dress cost sells for $350 and the retailer is offering a 20% discount on the price. The sales price is reduced to $280 after the discount, qualifying the coat as exempt during the holiday.

Coupons – Coupons immediately reduce the price of an item before sales tax.

Rebates – Rebates cannot be used to reduce the total price of an item before sales tax.

Rain Checks – A rain check used during the exemption period for an item that costs less than $300 qualifies. A rain check issued during the sale period but redeemed afterward does not make the item exempt after the holiday.

Layaways – An item put on layaway during the sales tax holiday is exempt if it qualifies under the rules. If the customer finishes payment and accepts possession of the item after the holiday, “[t]he item will not be taxable when the customer takes delivery of possession of it.” If an item is put on layaway prior to the sales tax holiday weekend, but the customer takes possession during the sales tax holiday week, the item does not qualify for exemption, even if its total cost is less than $300.

Mail Order, Telephone and Internet Sales – “Tax does not apply to the sale of an article of clothing or footwear costing less than $300 sold during the exclusion week by mail, telephone, or over the Internet.”

Rental of Clothing and Footwear – “The rental of an article of clothing or footwear costing less than $300 during the exclusion week is not taxable.” However, if the rental period begins before the exclusion week, the item is not exempt from sales tax.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”