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Connecticut: 2013 Annual Sales Tax Holiday


7/12/13

Synopsis:
 
Connecticut will offer a sales tax holiday from August 18 through August 24, 2013, exempting the purchase of clothing and footwear costing less than $300 from sales tax.
 
Issue:
 
In 2011, Connecticut repealed its sales tax exclusion for clothing and footwear selling for less than $50. However, Connecticut typically holds an annual sales tax holiday during August, just in time for school shopping.
 
While the sales tax holiday applies to most articles that are intended to be worn on the body, it does not include:

  • Special items designed specifically for athletic activity that are not worn outside of that athletic activity
  • Jewelry, handbags, luggage, umbrellas, watches, wallets and similar items
  • Articles of clothing that are considered safety apparel
     

Key provisions of the 2013 sales tax holiday include:

  • Sales and rentals of clothing and footwear selling for less than $300 will not be subject to Connecticut sales and use tax. The $300 price limit applies to the final sale price of the item, after any discounts or coupons are applied.
  • Sales tax is charged on the entire price of an item that sells for more than $300.
  • Articles that are normally sold as one unit, such as a two-piece suit, may not be separated and sold as individual items to qualify for the exclusion.
  • If a customer purchases an item during the holiday, but exchanges it for a similar, but more expensive, item after the holiday, the price difference is also exempt from sales and use tax.
     

However, if the type of item exchanged is different from the originally purchased item, sales and use tax would apply. For example, if a customer buys a dress for $120 during the holiday and exchanges it after the holiday for a dress that costs $200, the second dress is not taxable. However, if the dress is exchanged for a different and more expensive item, such as a $200 pantsuit, the pantsuit is fully taxable. 


What Does CohnReznick Think?
Keep the sales tax holiday in mind when planning for “back to school” and other clothing and shoe purchases.


Contact:
 
For more information, please contact one of these CohnReznick tax professionals:

To learn more about CohnReznick’s State and Local Tax services, please visit our webpage.


Circular 230 Notice: In compliance with U.S. Treasury Regulations, the information included herein (or in any attachment) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of i) avoiding penalties the IRS and others may impose on the taxpayer or ii) promoting, marketing, or recommending to another party any tax related matters.

This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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