Last week, 57 percent of Nevada voters backed an initiative to exempt feminine hygiene products from the state’s 6.85 percent sales tax. Joining nine other states and the District of Columbia, Nevada’s new amendment says that “feminine hygiene products should be treated like other medical products that are exempt.”
My first thought, as a woman and a consumer: “That’s fair.” These are necessary products, not luxury items, for goodness’ sake. Friends had the same thought. Of the 32 that I polled (27 women, 5 men), 80 percent (22 women, 4 men) said Nevada voters made the right decision.
But then I had second thoughts, as I often do when it comes to tax policy. I recalled what my TPC colleague Richard Auxier wrote just a few weeks ago: “Tax policy wonks could tell you why selectively shrinking your tax base like this is bad tax policy. Tax policy wonks also don’t typically win elections.”
I’m not trying to win an election and I certainly don’t want to antagonize my friends, but there are good reasons why a sales tax exemption for feminine hygiene products is the wrong call. Let me explain.
There’s the math.
By exempting, or “carving out” a segment of products from sales tax, Nevada and its companion jurisdictions stand to lose revenue. In Nevada’s case, an exemption for feminine hygiene products could cost between $4.96 million to $7.11 million a year. The state collected $346 million in sales tax in the fiscal year ending in July 2018.
It is not a huge amount of money, but it’s generally a bad idea to distort the marketplace with product-specific exemptions from sales tax. For example, the law specifically exempts only tampons and sanitary napkins. What about other products that do the same thing (menstrual cups or sponges) but don’t meet that definition? Is Nevada trying to favor one product over another?
How would Nevada make up that lost revenue? Would voters be okay if it raised sales taxes on the remaining eligible products? Or if it taxes additional goods or services? What if the choice is more money in consumers’ pockets but cuts to state spending? As one survey respondent told me, “Maybe they’ll cut funding for family planning services, or breast cancer screening, or domestic violence shelters.”
Where do we draw the line? What happens if we don’t?
Nevada’s new amendment says that feminine hygiene products are a medical product. Nevada’s now tax-exempt tampons and sanitary pads absolutely provide comfort and convenience for women who need them. But the exemption raises the question of where the state should draw the new line.
Other female-specific products assure not only comfort and convenience, but physical well-being—and states still levy sales tax on them. How about sports bras? As The New York Times recently reported, they may be one of the most important athletic inventions in the history of women’s sports—allowing more women to compete and excel without hurting themselves. Should sports bras be tax free?
And what about male-specific products, like the athletic cups I buy for our son? He has to wear one for his physical safety if he wants to play sports. Is it unfair to penalize men with a sales tax because of their body parts?
What about pain killers, often used while using feminine hygiene products or after playing a hard sport—like ibuprofen or acetaminophen? Nevadans (and most states’ residents) pay sales tax on those and other nonprescription drugs.
Then there are prescription drugs and many food items—no sales tax there, but Jennifer Weiss-Wolf, who works with lawmakers to advance “period equity” asks in a New York Times interview, “Are items like Viagra, Pop-Tarts, and Rogaine really necessities?”
One could make an argument either way about those products, and countless others. Should we then review each product currently taxed at the point of sale and vote on them? If that’s the case, maybe it’d be easier to levy no sales tax, like Alaska, Delaware, Montana, New Hampshire and Oregon. But, of course, no sales tax means no sales tax revenue to fund public goods and services.
What’s this really about?
A woman could spend about $1,773 in her lifetime on tampons--about $46.66 a year or just under $3.88 a month. The sales tax exemption will save a Nevadan consumer about 27 cents a month. Maybe this debate is less about cost and more about the perception of fairness between men and women.
Economic equity between men and women is vitally important, but are we going to come closer to achieving it through a sales tax exemption that affects a relatively small share of a woman’s budget or state’s annual sales and use tax revenues?
Symbolically maybe. Practically, I don’t think so. If equity is what voters want, maybe they could worry less about the sales tax and focus on more important consumer choices. Disposable plastic or paper feminine hygiene products are big business in the US, with nearly $6 billion in sales.
One of my friends didn’t vote in my poll. She just said: “Menstrual cups. That is all.” At about $38 for a cup that can be reused for a few years, a woman would reduce her feminine hygiene costs by three-quarters, vastly more than she’ll save with Nevada’s sales tax exemption on tampons or pads.
Maybe that is all.
The Tax Hound, publishing once a month, helps make sense of tax policy for those outside the tax world by connecting tax issues to everyday concerns. Have a question or an idea? Send Renu an email.
