How NYC families can beat back-to-school taxes with a Connecticut trip

NEW YORK CITY - For families in the New York City area, back-to-school shopping comes with a unique set of tax rules. 

By the numbers:

New York City residents enjoy one of the best year-round tax perks in the Northeast, with everyday clothing and footwear priced under $110 per item completely exempt from both the 4% New York State tax and the 4.5% NYC local tax.

However, the exemption is a hard cutoff. A pair of $109 sneakers will get you $0 in sales tax, but if those sneakers cost $110, the entire purchase is hit with the full 8.875% combined tax rate. That same tax also applies to every notebook, backpack and laptop on your list.

To avoid the $110 limit on expensive apparel, and to take advantage of Connecticut's zero-tax rule on everyday school supplies, some NYC parents are taking their shopping lists across state lines to maximize their budgets.

Shopping strategy

What you can do:

To maximize your back-to-school budget and minimize toll and gas expenses, it may be best to split your shopping list based on the price tags.

Clothing

Since New York City exempts clothing and footwear under $110 year-round, buy the basics locally. Remember that the exemption applies per item, not per receipt, which means you can buy ten $50 shirts at once and the entire $500 purchase remains tax-free.

If you are shopping for apparel that pushes past the $110 mark, mark your calendar for August 16–22 to attend Connecticut's annual Sales Tax Free Week. Any qualifying clothing or footwear item priced under $300 is completely tax-free. 

If you plan to exceed Connecticut's $300 limit, or if you miss the August 16–22 window, head to New Jersey, where everyday clothing and footwear are exempt from sales tax year-round, regardless of the price.

School supplies

Clothing is only half the back-to-school battle. When it comes time to buy binders, backpacks, and laptops, the rules change entirely.

Starting July 1, Connecticut introduced a new, year-round sales tax exemption for non-electronic school supplies. The exemption means items like backpacks, lunch boxes, notebooks, and binders are now completely tax-free in Connecticut any day of the year.

Unfortunately, the tri-state area has become a tax desert for electronics. New York does not exempt electronics, New Jersey permanently repealed its back-to-school tax holiday, and Connecticut’s exemptions explicitly exclude computers and calculators. 

If you need to buy a laptop, your best local option is to cross the river and buy it in New Jersey (6.625%) or Connecticut (6.35%) to shave a little off NYC’s steep 8.875% combined rate. However, if you are buying multiple electronic devices, it may be worth making the longer drive down to Delaware, where there is a 0% sales tax on everything.

School supplies surge

Big picture view:

Families are expected to spend nearly $175 on school supplies this year, according to data from Groundwork Collaborative.

The price of a typical list has increased 7.7% over the past year, with some essential supplies seeing the largest price hikes: lunch boxes (26.8%), notebooks (23%), index cards (22.2%), notebook paper (20%), and tissues (20%).

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