Connecticut shoppers can look forward to a little extra money in their wallets when the state holds its annual tax-free week Aug. 17 to 23.
During that time, the 6.35 percent sales tax on most clothing and shoe purchases under $300 will be waived.
Revenue Services Commissioner Kevin Sullivan estimates that this year's tax-free period will save shoppers between $7 million and $8 million, about the same amount as in 2012 and 2103.
"It's a good opportunity for both back-to-school shoppers and retailers," Sullivan said. "The event brings people into stores, and stores traditionally offer special sales to go along with the tax savings. It's a hit all around."
Sullivan said that the week-long tax holiday, an annual event that began in 2000 and is mandated by state law, will continue in future years, in spite of the fact that the state budget for 2014-15 eliminates sales tax on clothing and footwear costing less than $50 as of July 1, 2015.
"Raising the tax-exempt amount to $300 for a week offers a good opportunity to families to save," Sullivan said.
This annual end-of-summer tax amnesty comes at a good time for cash-strapped parents.
Although American families with children in kindergarten through 12th grade will spend about $670 on school needs — an increase of about 5 percent from last year — parents will still be cautious with purchases, according to the National Retail Federation.
"Slow improvements in the economy may have contributed to the growth in confidence among back-to-school shoppers, and while we are encouraged by the overall tone of the results and expect to see continued improvement in consumer spending through the year, we know Americans are still grappling with their purchase decisions every day," Matthew Shay, the National Retail Federation's president and CEO, said in a press release. "Throughout the history of this survey, spending has fluctuated based on family needs each year, and this summer, we expect parents to continue to use caution but also make smart decisions for their family budget that is a good balance between what their children 'want' and what they actually need."
The biggest portion of family back-to-school budgets will go toward new apparel and accessories, with parents of school-age children spending an average of $356 on clothing and shoes. To help save, consumers are looking for deals at discount and department stores; buying store-brand and generic items; and comparison shopping online.
They're also waiting for last-minute specials.
National Retail Federation research shows that increased numbers of shoppers, including families with college-bound kids, have put off shopping to take advantage of retailers' late summer promotions.
"College shoppers generally cannot take the kind of gamble their younger counterparts can by waiting until the last minute to buy what they need for school — especially given their time frames to return to class or even make a big move across country — but this year, we are seeing that they, too, want to play the waiting game to see if deals are better later on," said Pam Goodfellow, consumer director of Prosper Insights Consumer, the company that conducted back-to-school surveys for the National Retail Federation.
That strategy can pay off, says Mark LoCastro of DealNews.com.
"Even though retailers have been offering back-to-school deals throughout the summer, customers who've waited for tax-free periods can expect to save even more," said LoCastro. "Stores offer some of their best sales of the summer to go along with a tax holiday."
Shoppers can also save on more than just backpacks. Sullivan said the week is a good time to shop for big-ticket items, such as fall and winter coats, jackets, suits and boots.
Under current regulations, sales tax is waived on most clothing items, shoes and boots priced under $300, and there's no limit on the number of items you can buy. Purchases can be made in stores, by phone or online. Put clothes or footwear priced at $299.99 or less on layaway during the week and you won't pay any tax, regardless of when you pick up the order.
Thrift and consignment stores shoppers also get the savings.
Outlet centers are hoping to be tax-free week shopping destinations. Tanger Outlets in Westbrook will kick off tax-free week with a centerwide sale and free activities for students in grades K-8 on Aug. 17. Starting at noon, the first 500 kids to arrive will get a free backpack and clues to find free school supplies in participating stores.