Virginia reduces tax on menstrual products, diapers

The sales and use tax rate for essential personal hygiene products in Virginia drops to 2.5 percent of the gross sales price as of January 1, 2020. This reduced rate already applies to sales of food for human consumption.

According to Chapter 550 “Essential personal hygiene products” are:

• Nondurable incontinence products (e.g., diapers, disposable undergarments, pads, and bed sheets)
• Products used to absorb or contain menstrual flow (e.g., menstrual cups and pads, pantyliners, sanitary napkins, and tampons)
• The term doesn’t include “any item that is otherwise exempt pursuant to this chapter.”

These products are currently subject to the full state sales and use tax rate of 4.3 percent, plus varying local taxes; combined rates range from 5.3 to 7 percent. Once the reduced rate takes effect, the state will lose an estimated $1.86 million in fiscal year 2020. That figure will jump to between $4.61 million and $5.22 million over the following five fiscal years.

The Virginia General Assembly has considered exempting feminine hygiene products in the past, but couldn’t reach consensus on the issue. The most recent effort was successful in part because it benefits a broader swath of citizens. Delegate Kathy Bryon explains, “This legislation won widespread bipartisan support because it provides tax relief on necessities used by women and men, young and old.”

Virginia isn’t the only state moving in this direction:

• Diapers and feminine hygiene products will be exempt from sales tax in the District of Columbia effective October 1, 2019.
• Diapers and menstrual products will be exempt from California sales tax temporarily, from January 1, 2020, until January 1, 2022.
• Louisiana is considering an exemption for diapers and feminine hygiene products (SB4 and SB5).
• Maine is considering an exemption for menstrual products.

Lawmakers across the nation are facing mounting pressure to exempt diapers and feminine hygiene products from sales tax. Businesses that sell these products into multiple states need to be on the lookout for change, especially since most states now require many remote sellers to collect and remit sales tax.