Sales tax zeitgeist: tampon exemptions – Wacky Tax Wednesday

If you follow sales tax news, you’ve undoubtedly noticed that certain issues make headlines time after time. For example, the complexity of state sales tax systems and whether remote sellers should collect tax have been hot topics for more than a decade now. Another issue that regularly cycles through the media machine: tampon taxation.

In 2014, the fact that tampons were taxed in Britain but exotic meats and edible cake decorations were exempt caused a splash. In 2015, an Aussie student brought the taxation of tampons into the global spotlight during a televised discussion with the Australian treasurer. Last year, legislatures in more than a dozen U.S. states and the District of Columbia considered exempting these products because of their essential nature, and one female business owner decided “to raise awareness of gender pricing discrimination” by creating a man tax.

Tampon tax exemptions are once again making headlines. They’re under consideration in legislatures from Maine to Colorado, and when I started researching the topic this morning, a new post by the Tax Foundation popped up. They are part of the sales tax zeitgeist.

Tampon tax misnomer

The term “tampon tax” is a misnomer, as it suggests tampons are singled out for a special tax. They’re not. They’re subject to the same rate as most other taxable goods wherever they’re sold: 10.1% in downtown Seattle, Washington; 8.25% on Main Street in Houston, Texas; and so on.

Yet although they aren’t subject to special taxes, feminine hygiene products are increasingly benefitting from specific exemptions. To date, seven states exempt them: Illinois, Maryland, Massachusetts, Minnesota, New Jersey, New York, and Pennsylvania. An exemption is set to take effect in Connecticut July 1, 2018.

Like last year, sales tax exemptions for feminine hygiene products are being considered by numerous state legislatures in 2017:

• Colorado
• Florida (SB 176 and HB 7109)
• Louisiana (SB 24 and SB 27)
• Maine (HP 162 and LD 206)
• Texas

Texas lawmakers win a prize for enthusiasm — they’ve introduced six measures to exempt feminine hygiene products this session.

But not all parts of the country share that enthusiasm. Last fall, California Gov. Jerry Brown vetoed a sales tax exemption for feminine hygiene products that landed on his desk. North Dakota lawmakers soundly rejected a proposed exemption earlier this year. And in spite of the fact that the Council of the District of Columbia approved exemptions for feminine hygiene products and diapers, Mayor Muriel Bowser’s budget proposal does not fund it. The exemption is supposed to take effect October 1 this year, but it will do so only if the district can find another source for the $3.5 million in annual sales tax revenue the products generate.

In an era when our nation is discussing gender identity more than ever before, tampon tax exemptions seem part of the spirit of the age — or at least the spirit of sales tax.

The Avalara Sales Tax Newsletter helps keep readers up-to-date on all things sales tax. It also permits access to webinars and other helpful sales tax resources. Sign up here.

Photo credit.