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New York Sued Over Tampon Tax


 Tampon taxes, should their fate be decided by legislators or lawyers?

Update 7.22.2016: New York Governor Andrew Cuomo has signed the legislation exempting feminine hygiene products from state and local sales taxes, calling it "a regressive tax on essential products that women have had to pay for far too long." He  added that "lifting it is a matter of social and economic justice." The exemption is set to take effect on October 1.

Update, 4.11.2016: AB 7555 was unanimously approved by the Senate today and heads to the governor's desk for his signature, which he is expected to provide.

Update, 3.21.2016: A group of women in Ohio have filed a class action suit against the state, seeking "an end to the collection of sales tax on feminine hygiene products and the refund of at least $66 million to female consumers."

Update, 3.17.2016: The New York Assembly has approved AB 7555, which seeks a sales exemption for feminine hygiene products. It now moves to the Senate for consideration.

For much of the country, 2016 will go down in history as the year Donald Trump turned the Republican Party on its head and a septuagenarian social democrat challenged Hillary. To those who follow sales tax, it may also go down as the year of the tampon tax exemption.

It’s a hot topic. President Obama has even weighed in on it, saying, “I have no idea why states would tax these as luxury items. I suspect it’s because men were making the laws when those taxes were passed.” (He emphasized that these were state taxes and therefore not his purview.)

Taxes on tampons are even an international issue. The United Nations “declared menstrual hygiene a public health and human rights issue” in 2013. More recently, taxes on feminine hygiene products have been challenged in Australia, England, and France and abolished in Canada.

Change the law

Lawmakers in at least six states (California, Connecticut, New York, Ohio, Utah* and Wisconsin) and Chicago are considering legislation that would exempt feminine hygiene products from sales and use tax (the Chicago bill would remove the City of Chicago sales tax only). Tennessee legislators are deciding the fate of a bill that would lower the sales tax rate for these products. Proponents point out that states have exempted more questionable products that benefit men, such as Viagra and Rogaine. A Chicago Alderman called the tax “an unnecessary and discriminatory tax against women.”

Sue

This is not the first time Chicagoans have challenged local tampon taxes; a 1989 class action suit alleging the city illegally taxed tampons was upheld. However, the state later narrowed its definition of “medical appliances” and feminine hygiene products became subject to state and local sales tax once more.

In addition to being challenged legislatively, New York’s sales tax on tampons and other feminine products is being disputed in court by a group of five women. On March 3, they filed a class action suit against the New York State Department of Taxation and Finance and Commissioner Jerry Boone, arguing that tampons and sanitary napkins are “a necessity for women’s health.” The plaintiffs point out that the FDA classifies tampons as a medical device and claim this is a public health issue.

The suit reads,

“Without access to tampons and sanitary pads, women are forced to use unsanitary and dirty rages—which can lead to infections and an increased risk of diseases such as cervical cancer—or have nothing at all to staunch the blood—which poses a risk to the health of women and the public.”

The New York State Department of Taxation and Finance Guide to Sales Tax for Drugstores and Pharmacies lists dandruff shampoo as exempt because it’s “specifically designed to treat illnesses or diseases.” It describes feminine hygiene products as those that are “generally used to control a normal bodily function and to maintain personal cleanliness” and explains, “Sales of these products are, therefore, generally subject to sales tax.”

A tampon-tax-free nation?

To date, only five states specifically exempt feminine hygiene products: Maryland, Massachusetts, Minnesota, New Jersey and Pennsylvania. They were exempt for a time in Illinois, but the state narrowed the exemption for medical appliances and they again became subject to the full rate of tax.

Product taxability is a minefield precisely because of variable state laws. Simplify management of sales and use taxes with sales tax software (SaaS). Learn more.

* Utah H.B. 202, the Hygiene Tax Act, failed to make it out of committee.

 


Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.