The Louisiana Legislature passed the so-called “pink tax” exemption bill on Thursday, proposing a state sales tax exemption on feminine hygiene products and diapers. The bill heads to Gov. John Bel Edwards for consideration.
The final passage of House Bill 7, authored by Rep. Aimee Freeman (D-New Orleans), marks a new step for pink tax legislation, which Democratic lawmakers have tried to advance for several years.
The bill defines feminine hygiene products as “tampons, menstrual pads, sanitary napkins, panty liners, menstrual sponges, and menstrual cups, including disposable and washable versions of these items.” It defines a diaper as “any absorbent diaper or undergarment used for incontinence in adults and any absorbent diaper or undergarment designed to be worn by a child who cannot yet control bladder or bowel movements.”
Last year, the legislature passed a related measure, also introduced by Freeman, authorizing municipal and parish governments to enact pink tax policies that exempt such products from local sales taxes. The local option is scheduled to sunset at the end of this year, but House Bill 7 would make the local option permanent.
Louisiana levies sales tax at a rate of 4.45% in addition to the sales taxes levied by local governments, which set their own rates. Consumers pay the combined total rate at the time of purchase as if it were a single tax.
For instance, a typical purchase of a non-food item in New Orleans would carry a total sales tax of 9.45%, which includes the state rate of 4.45% plus the combined Orleans Parish rate of 5% — which, itself, is comprised of 2.5% levied by the city, 1.5% levied by the Orleans Parish School Board and 1% levied by the Regional Transit Authority (RTA).
If Freeman’s bill becomes law, consumers in New Orleans would pay a total of 2.5% in sales taxes on “pink” products because the New Orleans City Council has already enacted the local pink tax exemption on its portion of sales tax. The sales taxes from the School Board and RTA remain.
A New Orleans shopper buying a $10 pack of sanitary pads would see the current applied sales tax drop from $0.69 to $0.25; a shopper buying a $50 box of disposable diapers would see the sales tax drop from $3.47 to $1.25.
In jurisdictions that choose not to exempt their local sales tax, only the 4.45% state portion of the sales tax would be exempted.
The state exemption would go into effect on July 1, 2022 and is estimated to cost Louisiana $11 million in annual tax revenue, according to its legislative fiscal note.