Small Businesses React to Sales Tax Plan

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    NEWSLETTERS

    Ask any shopper and they will tell you that the idea of getting rid a portion of the sales tax on clothing and shoes is a good idea. Many retailers agree too.

    Governor Dannel Malloy wants to eliminate the sales tax on clothing and shoes under $25 starting in 2014.

    Connecticut Clothing Sales Tax Removal

    [HAR] Connecticut Clothing Sales Tax Removal
    Governor Malloy plans to remove sales tax on clothing $25 and under.

    He announced his proposal during his budget address on February 6. He said the plan is part of his middle class relief package.

    The sales tax exemption would go up to items $50 and less starting in 2015.

    Now small business owners in Connecticut have had a chance to digest what that could mean for them.

    "If there's more money out there to spend then they might spent it here," Theresa Corbin, an employee at Over the Moon children's clothing store in Avon, said.

    Nearby states like New Jersey and Massachusetts have no sales tax on clothing and shoes, so local businesses are looking for an edge.

    Getting rid of the tax comes at a cost to the state. The exemptions will run the state close to $200 million.

    Corbin said if customers have an incentive to spend, that would help the entire economy.

    "I think definitely having the sales tax eliminated would help mainly because people would have disposable income," Corbin said.

    The governor's proposal still needs legislative approval.