Nevada voters: Should tampons be sales tax exempt?

Update 11.28.2018: Close to 57 percent of Nevadans voted to exempt sanitary napkins and tampons from sales tax. The exemption will go into effect January 1, 2019.

In 2017, the Nevada Legislature approved a sales tax exemption for feminine hygiene products. However, it must be approved by a majority of Nevada voters in order to become law.

Ballot measure 2 asks: Shall the Sales and Use Tax Act of 1955 be amended to provide an exemption from the taxes imposed by this Act on the gross receipts from the sale and the storage, use or other consumption of feminine hygiene products?

If adopted, feminine hygiene products would become exempt from Nevada sales and use tax starting January 1, 2019, the same day a similar exemption takes effect in Australia. Nevada’s exemption would expire on December 1, 2028.

Argument for the exemption

Proponents of the so-called tampon tax exemption argue that feminine hygiene products “are not a luxury but a basic necessity of life.” Thus, they should be “treated like other medical products that are exempt from Nevada’s sales and use taxes, such as splints, bandages, and prosthetic devices.”

Taxing feminine hygiene is “discriminatory,” say advocates of the exemption, as a growing number of states are recognizing: Nine states and the District of Columbia already exempt these products.

Argument against the exemption

Those calling for a no vote point out that exempting feminine hygiene products will reduce state and local sales and use tax revenue. They note that though California lawmakers approved a similar exemption in 2016, Governor Brown vetoed it “because of concerns about lost revenue.” He did — however, California lawmakers haven’t given up on the idea.

Opponents also argue that Nevada’s sales and use tax isn’t discriminatory: “Products sold in Nevada are generally subject to [sales and use] taxes regardless of who buys or uses them. As a result, many products that are considered necessities, such as soap, toothbrushes, and toilet paper, are not exempt from sales and use taxes.”

Fiscal impact

If approved by voters, the sales and use tax exemption is expected to reduce statewide sales and use tax revenue by approximately $4.96 million to $7.11 million per year.

Nevada voters will decide the fate of the proposed sales and use tax exemption for feminine hygiene products on November 6, 2018.

Changing product taxability rules complicate sales tax compliance

Whenever product taxability rules change, as could soon happen in Nevada, sellers of affected products must update point-of-sale systems and ecommerce shopping carts. For businesses that handle sales tax manually and sell into multiple jurisdictions, this can be a real hassle.

Automating sales tax helps tame the complexity.