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Thursday, August 04, 2016

“Tampon Tax” Highlights Need to Review All Tax Exemptions

By Robert Weissert, Esq., Florida TaxWatch Executive Vice President and Counsel to the President and CEO

The debate over the “tampon tax” has sparked a healthy discussion about our state’s tax system. We hope lawmakers take advantage of the public attention on this issue to review all of the quirks and loopholes in taxation.

The “tampon tax” refers to Floridians paying a sales tax on feminine hygiene products while items like bandages and some other medical supplies are not taxed. Florida taxes tampons because they are considered “hygiene products.”

Florida exempts numerous health care related items from the sales and use tax with the idea that consumers should not be burdened with extra costs for life’s necessities.

In the Sunshine State, sales taxes are collected on most retails sales, but many exemptions exist, including necessities such as prescription drugs and groceries. However, bureaucrats are left to make distinctions in grey areas. The results can be puzzling and our state’s tax exemptions are riddled with peculiarities.

For example, while chocolate and peanuts are not taxed, chocolate-covered peanuts are. A quart of ice cream is tax-exempt; a pint of ice cream is taxed because it is considered a one-time eating event rather than a larger grocery purchase.

This isn’t a question of revenue; the tax collected on tampons is minimal in the scope of the state’s $80 billion-plus budget. But a tax rate of up to 7.5 percent on this product can add up over time with more than $100 paid individually in taxes on this essential item.

The “tampon tax” has become a national cause and Florida lawmakers could consider the exemption during the 2017 Legislative Session. Other states have already addressed this issue. The New York legislature unanimously voted to exempt tampons and other feminine hygiene products from the state’s sales tax in May of this year. New York joins New Jersey, Massachusetts, Pennsylvania, Maryland and Minnesota in not imposing sales taxes on tampons. Additionally, the California Assembly passed a bill to exempt tampons and sanitary wipes.

For Floridians to have faith in their investments in state government, we must always work toward making sure that each dollar taken from taxpayers is fair and justified. Lawmakers owe it to Floridians to review this and other proposed exemptions to make sure our tax system is clear, logical and equitable.

Since 77 percent of our state revenue comes from the sales and use tax, it is essential that Floridians both understand and fundamentally support why and what items the Legislature chooses to exempt from taxation.

Robert Weissert, Esq. is the Executive Vice President and Counsel to the President and CEO at Florida TaxWatch

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