Colorado and Iowa to exempt diapers and period products
Starting January 1, 2023, Colorado state sales and use tax will no longer apply to diapers, sanitary napkins, tampons, and similar products related to incontinence and menstrual cycles. Diapers and feminine hygiene products will also be exempt from Iowa sales and use tax as of January 1, 2023.
The Iowa exemption is straightforward. Senate File 2367, signed into law on June 17, 2022, exempts sales of feminine hygiene products and diapers for both adults and children effective January 1, 2023.
Due to the nature of sales tax in Colorado, the exemption there is a bit more complicated.
To “redress the inequitable burden” that taxing diapers and feminine hygiene products places on caregivers and women, Colorado House Bill 1055 provides a sales and use tax exemption for the following products on and after January 1, 2023:
- Incontinence products (“absorbent cloth or disposable products worn by humans who are incapable of, or have difficulty, controlling their bladder or bowel movements”)
- Period products (“consumer products used to manage menstruation”)
These new exemptions were created to “provide tax relief” and “redress the inequitable burden” that taxing diapers and feminine hygiene products places on caregivers and women.
The exemption provided by HB 1055 applies only to state sales tax. However, the measure stipulates that affected diapers, incontinence products, and period products may be exempt from city, county, or town sales tax “by the express inclusion of the exemption either at the time of adoption of the initial sales tax ordinance or resolution or by amendment hereto.”
Colorado is a home-rule state where local tax jurisdictions have the option to exempt or tax certain products. For example, Boulder County provides an exemption for food for domestic home consumption, while portions of Douglas County do not. DR 1002 lists the exemptions provided by state-administered jurisdictions. (As of this writing, the exemption for diapers, incontinence products, and period products isn’t listed on DR 1002.)
Unfortunately, there’s no handy list of exemptions offered by self-administered jurisdictions; to determine whether local sales and tax applies to a product or service in a self-administered city or county, you need to contact the city or county directly. DR 1002 provides contact information.
Some self-collecting home-rule jurisdictions already provide an exemption for diapers and/or menstrual products. For example, menstrual care products have been exempt from local sales and use tax in the City of Aurora since June 1, 2021; diapers are exempt from Aurora sales and use tax as of July 1, 2022.
Feminine hygiene products have been exempt from local sales and use tax in the city and county of Denver since July 1, 2019. Diapers and incontinence products will be exempt from Denver city and county sales and use tax starting October 1, 2022.
If you sell diapers or feminine hygiene products to consumers in Colorado, be sure you know where they’re subject to local sales tax. Automating sales tax collection and remittance can help.
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