Texas to end diaper tax, tampon tax on September 1, 2023

This has been a long time coming; at least one lawmaker has been trying to repeal the Texas tampon tax and diaper tax since 2017.

And Texas certainly isn’t the only state to get rid of a so-called pink tax. California and New York have taken steps to ban gender-based pricing and taxes, and several other states have done or are looking to do the same. 

Efforts to eliminate tax on tampons and/or diapers are particularly popular of late. To wit:

• Colorado and Iowa ended their tax on tampons and diapers as of January 1, 2023
• Florida adopted an exemption for diapers and assorted baby-care and family-care products effective July 1, 2023
• North Dakota stopped taxing child diapers effective July 1, 2023 (diapers for adults were already exempt)
• Nevada voters will determine the fate of their diaper tax at the polls on November 5, 2024
• Maine may soon provide a sales tax exemption for diapers

Lawmakers in Hawaii, North Carolina, South Carolina, and Wisconsin may also soon exempt diapers and/or feminine hygiene products. They’re working on it.

If you’re doing business in Texas, you need to monitor and comply with all applicable sales tax laws — including the repeal of the tax on tampons, diapers, and other products.

Failure to tax products that are taxable can lead to a significant back-tax liability for a business, plus penalties and interest. Failure to provide an exemption as required could lead to significant financial penalties as well as disgruntled customers. Consumers in the United States are not above filing a class action suit when they think they’ve been taxed erroneously. 

Bear in mind you may be required to collect and remit Texas sales tax, even if you’re not located in Texas. Remote sellers must register for sales tax and comply with all applicable sales tax requirements if they have $500,000 or more in gross revenue from sales of tangible personal property and services in the state in the previous 12-month period. 

Once registered, a remote seller must not collect sales tax on exempt products — such as diapers, tampons, and assorted other products, starting September 1, 2023.

If you’re struggling to keep up with changing sales tax requirements and tax obligations in the United States, automating sales tax calculation, collection, and returns can help.