Connecticut's annual tax-free week just got significantly bigger.
Public Act No. 26-68 increased the sales tax holiday price threshold from $100 to $300 per item and expanded eligibility to include all backpacks and cleated shoes — changes that take effect starting with the 2026 tax-free week. TaxJar
Connecticut's annual sales tax-free week runs August 16 through August 22, 2026 — from the third Sunday in August through the following Saturday. The Sales Tax People
That's 55 days away. And this year, it's worth planning around more than ever.
A $90 pair of sneakers has always qualified during tax-free week. A $250 pair of boots never did — until now. That change alone makes Connecticut's 2026 holiday meaningfully more valuable for back-to-school shoppers and clothing retailers alike.
Connecticut's tax-free week has been running since 1997 — making 2026 its 26th year. The core structure has stayed consistent: one week every August, clothing and footwear exempt up to a price threshold.
But the threshold hasn't always moved with the times. A $100 cap that felt reasonable in the late 1990s covers a narrower range of clothing today, as prices have risen. The legislature's decision to raise the cap to $300 is the most significant expansion of the holiday in years.
Normally, only clothing and footwear priced under $75 per item are exempt from Connecticut sales tax year-round. During the tax-free week, the threshold has historically risen to $100. For 2026, that threshold jumps to $300 — meaning items that would normally be taxed at the full 6.35% rate can be purchased tax-free during the August 16-22 window. The Sales Tax People
The practical impact: a wide range of mid-range clothing and footwear that has never qualified before — dress shoes, boots, quality outerwear, athletic gear worn as everyday clothing — now falls within the exemption.
The legislation also adds backpacks and cleated shoes as newly qualifying categories for the tax-free week. TaxJar
Cleated shoes are particularly notable — they've historically been excluded as "special footwear primarily designed for athletic activity." Their addition in 2026 signals a broader interpretation of what counts as qualifying footwear during the holiday window.
The exemption covers clothing and footwear priced under $300 per item. Here's what qualifies:
Shirts, jeans, dresses, shoes, boots, sleepwear, undergarments, outerwear, hats, gloves, and similar items worn on or about the body — all qualify during tax-free week if individually priced under $300. The Sales Tax People
Backpacks of any type priced under $300 qualify for the 2026 tax-free week — a new addition under Public Act No. 26-68. TaxJar
Cleated shoes — soccer cleats, football cleats, baseball cleats — qualify for the first time in 2026.
The $300 threshold applies per item, not per transaction. A shopper buying five $250 pairs of shoes pays no sales tax on any of them — each item individually qualifies.
The expansion is significant — but it doesn't cover everything.
The following items are specifically excluded from Connecticut's tax-free week exemption: special clothing or footwear primarily designed for athletic activity or protective use that is not normally worn except for that activity, and accessories including jewelry, handbags, luggage, umbrellas, wallets, watches, and similar items carried on but not worn on the body in the manner characteristic of clothing. The Sales Tax People
That means:
The cleated shoe addition creates an interesting edge: cleats are now explicitly qualifying, but other athletic footwear "not normally worn except for athletic activity" is still excluded. The distinction is footwear that has a plausible everyday use versus footwear that only makes sense on a field or court.
This is where Connecticut's 2026 tax story gets more complex — and where businesses need to pay close attention.
Effective July 1, 2026 — before the tax-free week even starts — Connecticut is also exempting nonelectronic school supplies from sales and use tax. Eligible items include backpacks, crayons, lunch boxes, and notebooks. TaxJar
That's a year-round exemption for specific school supplies — separate from the tax-free week.
The interaction between the two creates an interesting overlap: backpacks qualifying as nonelectronic school supplies are sales tax exempt starting July 1 as a permanent year-round exemption, while all backpacks priced under $300 qualify for the tax-free week. The Connecticut Department of Revenue Services may need to publish additional guidance clarifying how these two exemptions interact. TaxJar
For retailers selling school supplies in Connecticut, this is a two-part compliance event: update your systems for the July 1 school supplies exemption first, then ensure the expanded tax-free week rules are applied correctly for August 16-22.
Connecticut sits in a region where back-to-school tax holidays overlap — and shoppers near state borders often cross to take advantage of the most favorable rules.
Massachusetts holds its sales tax holiday on August 8-9 — a full week before Connecticut's August 16-22 window — covering most retail items under $2,500 for personal use, including electronics and appliances. The Sales Tax People
Connecticut's holiday is narrower in category (clothing and footwear only) but now covers a higher price threshold ($300 vs. Massachusetts's general $2,500 cap on most items). Massachusetts's holiday gives more category breadth. Connecticut's gives seven full days.
For families near the Massachusetts-Connecticut border, the strategy is clear: electronics and big-ticket appliances on August 8-9 in Massachusetts, clothing and footwear on August 16-22 in Connecticut.
For retailers in both states, this means two separate weeks of holiday compliance obligations — with different rules, different product categories, and different effective windows.
For businesses new to Connecticut sales tax, the holiday doesn't exist in isolation.
Connecticut's standard sales tax rate is 6.35% for most purchases. Luxury items — including clothing and footwear priced above $1,000 — are taxed at 7.75%. B2B SaaS is taxed at a reduced 1% rate; B2C SaaS and digital goods are taxable at the full 6.35%. The Sales Tax People
Connecticut uniquely requires remote sellers to exceed both $100,000 in gross receipts AND 200 transactions with Connecticut customers to trigger economic nexus — not just one threshold. The "AND" structure means a seller with $500,000 in Connecticut revenue but only 150 transactions hasn't triggered nexus. And a seller with 300 transactions but only $80,000 in revenue hasn't either. The Sales Tax People
Both thresholds must be crossed for the nexus obligation to apply. For businesses approaching the Connecticut threshold, the distinction matters significantly.
The expanded threshold and new qualifying categories mean retailers can't rely on last year's tax-free week setup. Systems need to be updated for 2026's new rules specifically.
1. Update your price threshold from $100 to $300. This is the most critical change. Your POS and ecommerce tax engine needs to apply the exemption to qualifying clothing and footwear priced up to $299.99 — not just up to $99.99 as in prior years.
2. Add backpacks and cleated shoes to your qualifying items list. Both categories are new for 2026. If your system had backpacks flagged as non-qualifying because of prior year rules, that needs to change.
3. Implement the July 1 school supplies exemption separately. Nonelectronic school supplies — backpacks, crayons, lunch boxes, notebooks — become permanently exempt from Connecticut sales tax on July 1, before the holiday begins. This is a separate compliance event that requires its own system update.
4. Handle online orders correctly. Sales tax does not apply to a qualifying item purchased from an online retailer during the tax-free week. The sale is considered to have taken place during the tax-free week if the customer pays in full during that window — even if delivery occurs afterward. The Sales Tax People
5. Don't split items to qualify. Items normally sold as a unit — like a pair of shoes — cannot be separated and sold as individual items to qualify for the exemption. A pair of shoes priced at $320 is taxable. Splitting them into two $160 charges doesn't make them exempt. The Sales Tax People
6. Handle "buy one, get one free" correctly. The $300 threshold applies to the item for which there is a charge. A BOGO promotion doesn't allow the retailer to allocate charges to the free item to bring both under the threshold. The Sales Tax People
The expanded threshold changes the math significantly for Connecticut shoppers.
| Item | Price | Tax Saved at 6.35% |
|---|---|---|
| Sneakers | $180 | $11.43 |
| Winter coat | $275 | $17.46 |
| Dress shoes | $220 | $13.97 |
| Back-to-school outfit | $150 | $9.53 |
| Backpack | $85 | $5.40 |
| Cleats | $120 | $7.62 |
| Full family back-to-school haul | $1,800 across qualifying items | $114.30 |
A family outfitting multiple kids for school — with clothing, footwear, and backpacks all qualifying under the new $300 threshold — could realistically save $100 or more in a single shopping trip. That's a meaningful incentive, and Connecticut retailers who market the expanded holiday effectively have a real traffic opportunity.
Before the August holiday arrives, Connecticut has another sales tax change taking effect July 1 that businesses selling into the state need to know about.
Nonelectronic school supplies become permanently sales tax exempt in Connecticut on July 1, 2026. Backpacks, lunch boxes, crayons, notebooks, and similar items qualify for year-round exemption starting July 1 — regardless of whether they're purchased during tax-free week or any other time of year. TaxJar
If you sell school supplies in Connecticut, your tax configuration needs two updates before August: the July 1 permanent exemption for school supplies, and the August 16 expanded tax-free week rules for clothing, footwear, and backpacks. Both are live compliance obligations that require system changes before their respective effective dates.
Selling clothing, footwear, or school supplies into Connecticut and want to make sure your systems are configured correctly for both the July 1 school supplies exemption and the expanded August 16-22 tax-free week? Book a free consultation with our team at sales.tax. We'll make sure your Connecticut compliance is updated for both changes before they hit.