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Putting the TP in Tax Pain – Wacky Tax Wednesday

  • Sep 28, 2016 | Gail Cole

sales tax exempt

The tampon tax has become a hot button issue of our time. Many women (and some men) decry it as a tax on women, a bastion of male privilege, evidence that inequality persists. As further proof, they note that Viagra is exempt — though one could argue that Viagra isn’t strictly for men.

But “tampon tax” is a misnomer: there is no tax unique to tampons. It is, instead, a sales tax that many states apply to tampons and other feminine hygiene products. Viagra is exempt because it’s only obtainable through a prescription, and prescription medicine is exempt in all states except Illinois, where it is subject to a reduced rate of 1%.

The tax on tampons is also contentious because feminine hygiene products are a necessity in this day and age: menstruating women simply cannot thrive in society without some sort of protection. Some opponents therefore take the stance that it’s wrong to tax essential items. That’s one reason some legislation seeking an exemption for these products also seeks an exemption for diapers. It’s also why prescription medication, like Viagra, is exempt. Read more about taxing essentials.

Curiously, toilet paper hasn’t been a big part of these recent discussions.

The most essential item of all

Okay, I know that there are some cultures where toilet paper isn’t considered essential. I’ve traveled to places where I had to pay an attendant for it (no money, no paper), and I’ve traveled to some countries where, if I wanted it, I had to provide my own. But most Americans feel lost without it. We even buy it in bulk, so as to never run out.

Seven states exempt toilet paper from sales and use tax, and five of those don’t have a general sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon). New Jersey and Pennsylvania are the only two states that could tax TP and don’t.

It’s easy to understand, then, how a company that sells toilet paper throughout the country could make a mistake and apply sales tax to toilet paper in New Jersey or Pennsylvania. After all, it is taxable in the vast majority of locations. And it’s understandable that residents of New Jersey and Pennsylvania would take issue with someone taxing their TP.

There’s no need to name names, but a couple that went on a toilet paper buying spree in New Jersey has accused a company of “illegally overcharging them — and potentially hundreds of thousands of other customers — by charging them sales tax on toilet tissue purchases in violation of state law.” They bought the tissue at a store in Wayne and then, five days later, purchased more in Hackensack. Both times, they allege, they were erroneously charged tax. When they complained to management, they were allegedly directed to take up the issue with corporate headquarters (CNBC).

Consumers who think they’ve been charged tax in error are invited to contact the New Jersey Division of Taxation. It does investigate when people complain about improperly sales tax collection. Periodically, the department even prosecutes business owners for collecting, but not remitting, sales tax, or for falsely claiming sales and use tax exemptions. Often, however, discrepancies are caused by something far less titillating than crime: human error.

Of course, unhappy consumers can always just sue. The New Jersey couple isn’t the first to sue over taxed toilet paper. In 2007, a Pennsylvania woman sued a chain store for taxing her purchases of TP. She won. Her winnings: “$100 or her actual damages, whichever is greater.” She took the $100, as the tax she was charged amounted to 28 cents.

Have a wacky sales tax story of your own? Share it in the comments below.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Gail Cole
Avalara Author Gail Cole
Gail Cole is a Senior Writer at Avalara. She’s on a mission to uncover unusual tax facts and make complex laws and legislation more digestible for accounting and business professionals.