Connecticut Expands Its Sales Tax Free Week and Creates a Year-Round School Supplies Sales Tax Exemption

Connecticut retailers now face two overlapping sales tax developments this summer: a temporary, one-week expansion of the state’s back-to-school sales tax holiday, and a separate, permanent exemption for nonelectronic school supplies that applies year-round.

Sales Tax Free Week Gets a Major Upgrade
Connecticut’s annual sales tax free week (in 2026, the holiday runs from Sunday, August 16 through Saturday, August 22) has been expanded in two important ways. First, the list of qualifying items now includes backpacks and cleated shoes—items that were previously taxable during the holiday. Second, and more significantly, the price threshold has tripled: items costing less than $300 now qualify, up from the previous $100 cap.

New Sales Tax Exemption for Nonelectronic School Supplies
As part of its 2026 budget legislation, the Connecticut General Assembly created a new, permanent sales and use tax exemption for nonelectronic school supplies purchased for nonbusiness purposes. Unlike the temporary, one-week sales tax free week discussed above, this exemption applies to qualifying purchases made at any time during the year.

Starting July 1, 2026, nonelectronic school supplies purchased for nonbusiness purposes are permanently exempt from Connecticut sales and use tax. The exemption is limited in two respects: it covers only “nonelectronic” school supplies, so laptops, tablets, and similar electronic items do not qualify, and it applies only to purchases made for “nonbusiness purposes.” The Department of Revenue Services issued Policy Statement PS 2026(1), which lists qualifying items and sets forth criteria for determining when a purchase is for a business purpose. It provides that all sales of nonelectronic school supplies shall be presumed to be for a nonbusiness purpose unless the retailer has a good faith reason to believe that the sale is made for a business purpose.

Qualifying nonelectronic school supplies include items such as binders, notebooks, folders, loose-leaf and copy paper, pens, pencils, crayons, markers, highlighters, rulers, scissors, compasses, protractors, and similar items normally used by a student in a course of study. Retailers that sell nonelectronic school supplies solely to businesses are not entitled to the nonbusiness-purpose presumption and must charge and collect sales tax on those sales unless the purchaser provides an exemption certificate establishing that the purchase is for a nonbusiness purpose.

What This Means for Retailers
Retailers should have already updated their point-of-sale systems by July 1, 2026 to exempt qualifying nonelectronic school supplies year-round, not just during the August sales tax free week. Retailers should review PS 2026(1) to familiarize themselves with the procedures for retailers set forth in the policy to ensure compliance with this new law. The Policy Statement provides that retailers may post a notice to inform purchasers of this new exemption and that purchasers may have a use tax obligation if the retailer does not collect sales tax in accordance with the statute and Policy Statement. In addition, retailers should apply the higher $300 threshold and expanded item list to the separate Sales Tax Free Week holiday running August 16 through August 22, 2026. Retailers and purchasers with questions about how these changes affect their sales and use tax compliance should consult with counsel to ensure their systems and procedures are properly updated.