Texas currently has what some folks call a diaper tax and a tampon tax, meaning Texas sales and use tax applies to diapers and tampons. Starting September 1, 2023, there will be no tax on tampons, diapers, or a number of other family care products in the Lone Star State.
Senate Bill 379, signed into law in June 2023, establishes a permanent Texas sales and use tax exemption for the following “family care items”:
- Baby bottles
- Baby wipes
- Breast milk pumping products
- Diapers (adult and children)
- Feminine hygiene products (menstrual cups, pads, and sponges; sanitary napkins, tampons, and similar products “sold for the principal purpose of feminine hygiene in connection with the menstrual cycle or postpartum care”)
- Maternity clothing
- Wound care dressings (e.g., sterile adhesive bandages, rolls or pads of gauze, and surgical and medical tape used to secure a wound care dressing to a patient)
Governor Greg Abbott shared this message via Twitter (now known as X) shortly thereafter:
The Texas Comptroller has yet to publicize the tax changes, but likely will soon.
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.
