This blog was last updated on January 31, 2022
Several states are redefining their sales tax laws to better consider gender equality in evaluating what is a necessary good. Often, this means states are looking into how the “pink tax” is applied.
The “pink tax” refers to the application of sales tax or value-added tax (VAT) in a way that is considered disproportionally unfair to females. Related to this pink tax is the “tampon tax,” specifically encompassing menstrual products. The taxable status of menstrual products often results in them being costlier for those who menstruate.
The pink tax has faced increasing scrutiny over the past few years, with one of the solutions proposed to be to make these products more affordable for those who need them. But before looking into legislative changes, why exactly is it considered a bad thing?
The case for modernizing sales tax laws
For background, sales taxes can be considered “regressive” because they take a larger percentage of income from low-income taxpayers than high-income taxpayers. With that in mind, many jurisdictions provide exemptions or reduced rates for human necessities (e.g., food, clothing, prescription drugs, etc.). Menstrual products being subject to standard sales tax indicated to the public that they were seen as regular goods instead of necessities, especially in those states that give tax breaks to necessities. Being subject to tax, especially in VAT jurisdictions where rates can be as high as 27%, sometimes places these products out-of-budget for people with lower incomes. And studies have shown that a lack of affordable access to these products is associated with facing greater obstacles in education, professional careers and general standards of living. [1]
A similar reasoning can be applied to breastfeeding products. Breastfeeding items are intended to assist in the continued health and well-being of children, such as allowing mothers to provide nutrient-rich breast milk even when in the workplace. However, much like with menstrual products, these items are often subject to tax. In addition to the impact on children’s health, families who are unable to afford such products may not enjoy the easier standard of living, which in turn affects their lifestyles and careers.
Greater education and awareness have led to an increased understanding of the implication of the “pink tax.” Multiple groups have lobbied and educated governments on the true cost of maintaining the tax.[2] Sometimes, public policy concerns can evolve into special interest lobbying. For example, a specific drink may be exempted, whereas a similar beverage is not because of what ingredients are used in creating the beverage. In this way, sales tax rules tend to be both a tool to encourage certain behaviors and a reflection of persuasive influences at play.
Are sales tax laws changing with regards to the pink tax?
Regarding menstrual products specifically, the various education and lobbying efforts have resulted in either eliminating or reducing the tax. Consequently, menstrual products are becoming more affordable from a global perspective. Kenya became the first country to abolish the tax in 2004. Other countries followed suit, for example, Canada (2015), Colombia (2018), and most recently, the United Kingdom (2021), following its departure from the European Union.
Several U.S. states are following in this trend as well. California and Louisiana have already passed their own bills fully exempting menstrual products from sales tax earlier this year. Both bills exempt similar products (i.e., pads, tampons, menstrual cups and sponges, and sanitary liners), but Louisiana also included panty liners in its exemption.
Other states have introduced bills choosing either similar or broader exemptions on menstrual products. For example, Hawaii introduced a bill specifically naming many more menstrual items, like feminine hygiene syringes, and vaginal creams, foams, ointments, jellies, powders and sprays. However, Alaska, Iowa and South Carolina are opting for a more open-ended approach, accounting for all products used in connection with the menstrual cycle.
Regarding breastfeeding, New Jersey, Maryland, Louisiana and Pennsylvania currently have taken a first step to easing this burden. As with menstrual products, each has taken a slightly different approach. For example, New Jersey focuses solely on exempting breast pumps and related parts, whereas Maryland takes a much broader approach of exempting all tangible personal property “manufactured for the purpose of initiating, supporting, or sustaining breast–feeding.” Following in their footsteps are Illinois (HB 154; HB 2387; HB 4234), New York (AB 1127; SB 2754), Washington, and Wisconsin (AB 700, SB 666), which each have introduced similar bills varying in scope.
As with all legislative efforts, there is no one-size-fits-all approach. Differing opinions, public influences and priorities affect the rules that legislatures pass. Many other states are yet to introduce or pass similar bills, perhaps wanting to gauge the results of these initial experiments before deciding on their optimal approach. Regardless of approach, what states consider necessities is slowly but surely changing with the times.
Take Action
Stay up to date on the latest sales tax laws, including potential changes to the pink tax, by registering for our regulatory feed.
[1] State of the Period: The widespread impact of period poverty on US students, The Policy Project. https://www.thepolicyproject.org/wp-content/uploads/2019/10/State-of-the-Period-white-paper_Thinx_PERIOD.pdf
How access to period products removes a barrier to education, PBS News Hour, Jun. 2019. https://www.pbs.org/newshour/amp/show/how-access-to-period-products-removes-a-barrier-to-education
New Study by U by Kotex® Shows 35% Increase in Period Poverty Since 2018, Cision PR Newswire, May 2021. https://www.prnewswire.com/news-releases/new-study-by-u-by-kotex-shows-35-increase-in-period-poverty-since-2018-301297210.html
Period poverty and mental health implications among college-aged women in the United States, BMC Women’s Health, Jan. 2021. https://bmcwomenshealth.biomedcentral.com/articles/10.1186/s12905-020-01149-5
[2]The Pink Tax: How Gender-Based Pricing Hurts Women’s Buying Power, Joint Economic Committee, Dec. 2016. < https://www.jec.senate.gov/public/_cache/files/8a42df04-8b6d-4949-b20b-6f40a326db9e/the-pink-tax—how-gender-based-pricing-hurts-women-s-buying-power.pdf>
The Problem with the Pink Tax, NPR: The Indicator from Planet Money, Nov. 2018. https://www.npr.org/transcripts/667539604
‘Pink Tax’ forces women to pay more than men, USA Today, Mar. 2017. https://www.usatoday.com/story/money/business/2017/03/27/pink-tax-forces-women-pay-more-than-men/99462846/
Repairing the Damage: The Effect of Price Expectations on Auto-Repair Price Quotes, Nat’l Bureau of Economic Research, Jun. 2013. https://www.nber.org/system/files/working_papers/w19154/w19154.pdf
