In an effort to promote the Aug. 18 start of Connecticut’s annual sales tax free week, Gov. Dannel P. Malloy visited Bristol retailer Insane Irving’s on Friday afternoon.
The sales tax free week is estimated to cost the state about $7 million in revenue, but Malloy said “we want everyone to be aware of it and if it ends up costing us $8 or $9 [million], so be it.”
Starting on Sunday, shoppers will be able to buy most clothing and footwear under $300 without having to pay the 6.35 percent sales tax. It does not apply to items that are solely intended for use in sporting activities or accessories such as jewelry, watches, handbags, and wallets.
Norm Ginsburg owns Insane Irving’s and has been open in Bristol for 75 years. Ginsburg said the tax holiday motivates shoppers to come into the store “if they can save $3 or $4 bucks on a pair of jeans or $10 or $15 bucks on a pair of boots.”
“Since it’s been in effect, we’ve seen an increase,” Ginsburg said of the event, which is in its 13th year.
Timothy Phelan, president of the Connecticut Retail Merchants Association, said it’s an opportunity for businesses on Main Street to compete with online retailers, who often don’t collect sales taxes on behalf of their customers.
It also makes shoppers feel good about their overall shopping experience and they will continue to spend money by going to a restaurant for lunch, he said.
“There’s a dynamic effect,” Phelan said. “Consumers feel that during the sales tax free week they’re getting a break . . . and they feel good about it.”
Anecdotally, Phelan said his members see an increase in sales during tax-free week, but he has no hard numbers from retailers.
“It absolutely drives traffic into stores,” Malloy said. “Let there be no doubt about it. That’s why it was important to maintain.”
Malloy said it’s also good for retailers as they try to move their summer merchandise and transition to the fall and winter product lines. He said if people can go shopping and get a discount on top of having to pay no sales tax, “it’s a great opportunity for some people to do some shopping.”
After a press conference, Malloy made his way to the back of the store to the shoe department. He tried on several pairs of black cowboy boots, but couldn’t find one without a steel toe in his size.
Malloy reminded reporters that he is no stranger to retail or shoes. He used to manage the women’s shoe department at Franklin Simon & Co. in Stamford when he was in high school.
“There is an impulse part of buying, particularly in the clothing market,” Malloy said. “I think it may compress some portion of that but I think it encourages people to get into the marketplace. I don’t know if you shop like I do, but I like a bargain.”
“If I can put no tax and a promotion and a lower cost together, that’s a pretty good way to do it,” Malloy said. “It’s part of our tradition and it’s part of helping working families.”
The tax free week coincides with back-to-school shopping. The Office of Legislative Research posted this brief history of the tax holiday this week.