CT News Junkie | Even Without A Budget Connecticut Shoppers Get a Tax Break

Social Networks We Use

Connecticut Network

Categories

Our Partners

Even Without A Budget Connecticut Shoppers Get a Tax Break

by | Aug 11, 2017 3:00pm
() Comments | Commenting has expired
Posted to: Consumer Protection, The Economy, Retail Sector, Taxes

One of the biggest shopping seasons of the year - second only to the holidays - is here: back to school time.

As consumer confidence grows, spending for school and college is poised to reach an all-time high of $83.6 billion this year, up 10 percent from $75.8 billion last year, according to the National Retail Federation (NRF).

“Families are now in a state of mind where they feel a lot more confident about the economy,” NRF President and CEO Matthew Shay said in a statement. “With stronger employment levels and a continued increase in wages, consumers are spending more and we are optimistic that they will continue to do so throughout the rest of the year. As students head back to the classroom, retailers are prepared to meet their needs whether it’s for pencils and paper, shirts and pants or laptops and tablets.”

A separate survey by Stamford-based Synchrony Financial, which polled more than 1,850 parents of K-12 and college students in July, found 63 percent of K-12 parents feel confident about their overall financial condition, and 75 percent feel confident about their job. Additionally., 63 percent said their household finances have improved this year.

With confidence rising, the NRF survey found families with children in elementary through high school plan to spend an average of $687.72 each, for a total of $29.5 billion - up 8 percent from $27.3 billion.

Those shoppers plan to collectively spend $10.2 billion on clothes, $8.8 billion on electronics, $5.6 billion on shoes, and $4.9 billion on school supplies.

Spending across all categories is poised to increase this year over last year. On average, the NRF found parents expect to spend $238.89 on clothes, $204.33 on electronics, $130.38 on shoes and $114.12 on school supplies.

For the 17th year, Connecticut will hold its annual “tax-free week” from Aug. 20-26. During that week, most individual clothing and footwear items priced less than $100 will be exempt from state sales and use tax. Typically, the 6.35 percent sales tax is applied to most clothing and footwear purchases.

The sales tax holiday is timed every year to coincide with back-to-school shopping, and many retailers run additional sales and promotions to further entice shoppers.

“Retail sales are an important part of any state economy, including the jobs involved,” state Department of Revenue Services Commissioner Kevin Sullivan said in a statement. “While the research is mixed on whether there is actually more business done over time due to sales tax holidays, it’s a helpful way to promote retail shopping - all of which employ people that support the sales.”

This year the state expects to forego about $4.1 million in sales and use tax revenue during the sales tax holiday week. Sullivan said the economic boost the holiday provides more than compensates for the cost.

The state doesn’t have a two-year budget in place to account for the revenue loss, but the sales tax free week is written into statute so there’s nothing stopping it from happening.

Some families got an early jump on shopping long ago, while others are procrastinating. The NRF survey found 27 percent of families nationwide began back-to-school shopping two months before the start of school, while 21 percent expect to wait until the last week or two before the school year begins.

Consumers plan to shop at various places, the NRF found, with 57 percent heading to department stores, 54 percent looking at discount stores, 46 percent going to clothing stores, 46 percent shopping online, and 36 percent heading to office supply stores.

Tags: , , , , ,

Share this story with others.

Share | |

Comments