Connecticut exempts diapers, tampons, July 2018
- Sales Tax News
- August 5, 2016 | Gail Cole
It seems that 2016 is indeed shaping up to be the Year of the Tampon Exemption. Legislation exempting feminine hygiene products from sales and use tax has been proposed in more than six states, several countries, and at least one city. While some of these efforts have been abandoned, others have been enacted — notably in New York and, most recently, in Connecticut.
The principle argument behind exempting feminine hygiene products is that they're essential to women’s health. A similar argument accompanies calls to exempt diapers: these products aren’t optional and paying for them can be a hardship for low-income households. Those against such exemptions point out that sales tax should be neutral and applied to all products at a low rate that isn’t burdensome. Read more about taxing essentials.
Connecticut is the latest state in the union to exempt feminine hygiene products from sales and use tax. Public Act No. 16-3 also exempts disposable and reusable diapers from tax. The bill’s fiscal note projects a loss of $3.6 million in annual sales tax revenue due to the feminine hygiene products exemption, and a loss of $4.2 million due to the exemption for diapers. Both exemptions take effect on July 1, 2018.
Changes in product taxability can be celebrated or vilified, but for retailers, they can’t be ignored. Sales tax software-as-a-service (SaaS) enables businesses to manage sales tax changes accurately and swiftly while reducing audit risk. Learn how it works.