Ohio joins the “End the Pink Tax” revolution
Ohio will soon stop taxing sales of tampons and other feminine hygiene products.
The new exemption is due to the enactment of Senate Bill 26, which unanimously passed both houses of the Ohio Legislature and was signed into law by Governor Mike DeWine on November 6, 2019. Two of the bill’s sponsors, Representatives Niraj J. Antani and Brigid Kelly, immediately celebrated the “pink tax repeal,” as did the bill’s strongest proponent, Anusha Singh, Policy Director of the nonprofit PERIOD and President of the PERIOD chapter at The Ohio State University. All said the exemption was a step toward gender equality.
“Feminine hygiene products” are defined in the bill as “tampons, panty liners, menstrual cups, sanitary napkins, and other similar tangible personal property designed for feminine hygiene in connection with the human menstrual cycle.” In case there’s any confusion over the term “hygiene,” SB 26 specifically excludes “grooming and hygiene products.”
According to the measure’s fiscal note, state sales tax revenue will decrease by approximately $3.2 million and $4 million each year, which gives an idea of how much money women spend on these necessities. Local sales tax revenue will drop by $0.8 million to $1 million annually.
The exemption is set to take effect “on or after the first day of the first month that begins at least 30 days after the bill’s effective date.”
Although it’s received the most press, the end of the so-called “pink tax” is just one component of SB 26.
Exemption for some — but not all — diapers
The bill also exempts diapers, but not the kind for infants and toddlers. The exemption applies to “sales of diapers and incontinence underpads sold pursuant to a prescription for the benefit of a Medicaid recipient with a diagnosis of incontinence, provided that the Medicaid program covers diapers or incontinence underpads as an incontinence garment.”
The sales tax exemption for incontinence supplies paid by Medicaid is expected to reduce state sales tax revenue by approximately $1.7 million annually. Local sales tax revenue is expected to drop by approximately $0.4 million annually.
Ohio isn’t the only state to exempt diapers for certain Medicaid enrollees (but not infants or children). A similar exemption took effect in North Carolina on October 1, 2019.
State income tax deduction for educators
SB 26 also authorizes eligible educators to deduct up to $250 for out-of-pocket expenses for professional development and classroom supplies from their state income taxes.
Eligible educators, according to the fiscal note for SB 26, are “those teaching kindergarten through grade 12, as well as any instructor, counselor, principal, or aide working at least 900 hours a school year in a school that provides elementary or secondary education.”
Expenses that qualify for the deduction include:
- Computer equipment (and related software and services)
- Professional development courses
This is expected to reduce Ohio income tax on individual educators’ pay by a whopping $12 annually; though for most, it will likely be less.
Additional details about the sales tax exemptions and income tax deduction are available in the fiscal note.
States that exempt tampons, etc.
The following states have adopted a sales tax exemption for feminine hygiene products:
- California (temporarily)
- New Jersey
- New York
- Rhode Island
- Washington, D.C.
These products are also exempt in the five states that don’t have a general sales tax: Alaska (though some local sales taxes may apply), Delaware, Montana, New Hampshire, and Oregon. They’ll soon be subject to a reduced rate of sales tax in Virginia. And although they’re taxable in Colorado, they’re exempt from Denver’s local sales tax.
It’s worth noting that although it’s often called a “pink tax,” there’s no extra or special tax on feminine hygiene products the way there sometimes is on soda. They’re subject to the same sales and use taxes that apply to most other tangible personal property.
But many people object to taxing tampons and similar products because they’re only needed by women. And they are needed. While there are many products primarily purchased by more women than men — makeup, hair styling products, nail polish, etc. — these products are not strictly necessary.
A win for women, a hassle for sellers
Every time states amend their product taxability rules, businesses are required to adjust their point-of-sale systems to ensure they’re in compliance.
Automating sales tax collection, remittance, and filing makes dealing with such changes much more manageable.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
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