The 'Tampon Tax': Hidden Gender Bias in Medical Products Exemptions

Sex discrimination in the consumer marketplace is long-standing and pervasive. A December 2015 report by the New York City Department of Consumer Affairs studied 794 products in 35 categories and found that women pay more for identical, or substantially similar, products 42 percent of the time — far more often than the relatively few instances when men pay a higher price for consumer products.¹ From underarm deodorants to dry cleaning services to bicycle helmets, the price differential is often substantial and without apparent justification.

There may be no clear legal theory for challenging such gender-based discrimination in the private sector’s sale of consumer products. However, when state governments institutionalize sex discrimination in the design and operation of their sales tax systems, the 14th Amendment’s equal protection clause is directly implicated.

The so-called “tampon tax” is a shorthand reference to sales tax regimes in which feminine hygiene products are subject to tax while other personal care necessities are not. This issue is not insignificant. Unlike items that are purchased only occasionally, feminine hygiene products are a repetitive, non-discretionary purchase for women over a substantial segment of their lives. The average woman spends more than six years — 2,280 days — menstruating, and (assuming she relies on tampons as her product of choice) will incur nearly $1,775 in expenses over the course of her lifetime.² Of course, that number does not take into account other menstruation-relief-related products. In short, feminine hygiene products are a necessity; and the burden of a regressive sales tax on these goods is felt most severely by low-income women.

Social convention has discouraged public discussion of women’s menstrual cycles and the health-related function that tampons and sanitary pads serve in absorbing the flow of menstrual blood. Certainly, the sales tax treatment of these items has not been a topic at state and local tax conferences and in tax publications. Tampons are taxed in the majority (35, at last count) of states, although calls to exempt menstrual products from sales tax are getting louder, with five states having legislated exemptions between 2016 and 2018.³ In July The New York Times reported that 22 states had introduced bills that would have had the effect of exempting menstrual products from tax this year — none, however, were signed into law.⁴

Opponents of such exemptions do not believe, or at least do not acknowledge, that the tax on feminine hygiene products is gender-biased or discriminatory. They point to the fact that the nature of the sales tax regime is to tax universally, and exempt specifically. Consequently, they argue that feminine hygiene products are not singled out, but, rather, are simply subject to tax along with most tangible personal property. Any new exemption, they maintain, narrows the tax base and reduces revenue that state and local governments might put to good use elsewhere. They also express concern that granting an exemption for tampons and sanitary napkins is likely to lead to a clamor for other necessary hygiene items (soap and toothpaste, for example) to be afforded exemptions as well, so as not to create a hardship for low-income consumers. This is the classic “slippery slope” objection.

At one level, there may be a legitimate public policy debate, appropriate for legislative consideration, whether feminine hygiene products should be exempt from sales tax. However, there are several jurisdictions where the issue is not simply one of legislative discretion, but, instead, presents a constitutional issue appropriate for judicial determination.

Constitutional Objection

In those states where there are no exemptions for over-the-counter medicines, health-related goods, or personal care products for basic bodily functions, there may be little basis for constitutional objections. But in other states, medical and bodily-related care products are subject to a double standard. Those used exclusively by women (such as menstrual hygiene products) are subject to sales tax. Whereas those used by both sexes are not. Take, for example, North Dakota, which exempts such “medical equipment” as incontinence pads and pants and adult diapers, but imposes sales tax on feminine hygiene products.⁵ Under any standard of constitutional review, it would be difficult for North Dakota state legislators to articulate a reasonable explanation why products to control one form of sporadic involuntary discharge from the human body should be taxed, while those to control another should not.

Similarly, there are states where products to regulate birth control are treated as tax-free “necessities,” but products regulating the necessary byproduct of the female reproductive system are not. Washington, for example, exempts “devices used for family planning purposes,” but taxes menstrual products.⁶ Wisconsin has adopted a similarly dubious distinction, exempting a suite of products such as contraceptives, but, again, not exempting tampons and sanitary pads.⁷

Add in a number of states, including in some circumstances South Dakota, Texas, and Vermont,⁸ which exempt various forms of bandages, gauze, or wound dressings but not specially adapted bandages, gauze, and dressings in the form of menstrual hygiene products. Once again, state legislators would have a difficult time articulating a reasonable basis for distinguishing (for tax purposes) between different items all having the sole purpose of preventing infection and controlling blood flow.

Judicial Review

Until a recent legislative change, New York offered a broad “medical supplies” sales tax exemption, which covered a range of products that included Rogaine, condoms, adult diapers, dandruff shampoo, foot powder, lip balm, and bandages.⁹ In 2016 a class action complaint was filed in New York state court, alleging that the New York sales tax violated the equal protection clauses of both the U.S. and New York constitutions, and seeking a permanent injunction on state collection of sales tax on menstrual hygiene products.¹⁰

The argument in support of these equal protection claims goes as follows. While the sales tax systems discussed above do not explicitly use gender-based distinctions when treating menstrual products as taxable while exempting comparable personal care necessities, a tax on feminine hygiene products can only be understood as a tax on females. The decision to charge and collect sales tax on tampons and sanitary pads, and not comparable medical products also used by men, results in disparate treatment of women. A facially sex-based classification triggers intermediate scrutiny, a middle path of legal review that requires that the categorization by sex furthers important government objectives and is substantially related to the achievement of those objectives.¹¹

Skeptics of this legal theory may seek refuge in the questionable precedent of Geduldig,¹² an older U.S. Supreme Court decision concerning a California program that denied disability insurance benefits for pregnant workers. Finding that not every legislative classification concerning pregnancy is a sex-based classification,¹³ the Court upheld the decision on grounds that the statute was facially neutral, rather than a facial sex-based classification. Should a tax on tampons be subject to the same logic?

Geduldig predated by a couple of years the adoption of intermediate scrutiny as the standard for sex-based statutory classifications, and relied on a formalism that seems to require willful blindness to the inescapable fact that, barring medical breakthroughs beyond our current imagining, a classification based on pregnancy is inherently a classification based on sex. (A few years later, Congress amended Title VII of the Civil Rights Act of 1964 to make clear that the prohibition of discrimination based on sex includes pregnancy discrimination).¹⁴ Moreover, Geduldig is distinguishable on its facts regarding the underlying employment policy. That case involved the consideration of a government-administered disability benefit program with an overall nondiscriminatory effect — the Court found that women gained more overall from the disability benefits program than they contributed.¹⁵ Later, in Nashville Gas,¹⁶ the Supreme Court had the opportunity to consider another pregnancy-related policy, one in which an employer denied accumulated seniority to employees returning from pregnancy leave, while employees on leave for other nonoccupational disabilities retained their seniority. This policy plainly burdened women, rather than denying them a benefit that men did not technically receive either, and the Court responded by remanding the case for further proceedings. Seeking relief from a tax that is lopsidedly imposed on women is far more similar to the burden-related leave policy in Nashville Gas than the benefit-related policy in Geduldig.

A central issue is whether a tax on products used exclusively by women is, in fact, a tax on women. In this regard, it is worth pondering Justice Antonin Scalia’s words in Bray that a “tax on wearing yarmulkes is a tax on Jews.”¹⁷ Just as a hypothetical sales tax on yarmulkes must be understood as a tax on the only religious practitioners who wear them, so too must a tax on tampons be understood as a tax on the gender for which they were designed.

Given the broad discretion granted to state legislatures in setting the sales tax base, the failure to include feminine hygiene products within the definition of an exempt category such as “medical supplies” may not be considered by some courts as being discriminatory on its face. A court might view such facts as hugging the gray area between facially neutral and facially discriminatory. If the tampon tax is viewed as facially neutral, the burden is on the challenger to show that the tax has both a disparate impact on women and that there was discriminatory intent on the part of the legislature (or the department of revenue if the discriminatory impact resulted from the department’s interpretation of the tax code) in order to trigger intermediate scrutiny.¹⁸ Otherwise, mere rational basis review is required.

Evidence of disparate impact would seem easy to demonstrate — surely no state can seriously dispute that a tax on products used exclusively in service of the female reproductive system is a tax with a disproportionate effect on women. But the element of discriminatory intent presents a more difficult hurdle to overcome. As already noted, the nature of the sales tax is to tax universally, exempt specifically. As such, it is not a matter of the legislature having singled out feminine hygiene products to tax; rather, the issue concerns the legislature’s failure to exempt such products from a broad-based sales tax. It is likely that challengers will find little in the legislative record to support a showing of conscious discrimination. Indeed, legislators may have been ignorant of the health benefits of these items. The paucity of discussion in the legislative history may be particularly problematic when the issue of “intent” is whether feminine hygiene products should have been, but were not, included in the definition of a medical products exemption. However, as the discriminatory impact of the tampon tax becomes more apparent to state legislators and tax administrators, the failure to eliminate such discrimination in the face of uncontroverted evidence of discriminatory impact, especially as tax codes are amended and recodified, may provide the requisite element of intent.

With 22 state legislatures having recently considered — and rejected — exemption proposals, it may be easier to prove that some animus lurks below the surface. Commentators point to the long history of menstruation being considered “unclean” and a taboo topic.¹⁹ Indeed, state lawmakers may well have sought to treat these items separately and unequally, compared with other personal health products. As Scalia noted in raising his yarmulke example, “some activities may be such an irrational object of disfavor that, if they are targeted, and if they also happen to be engaged in exclusively or predominantly by a particular class of people, an intent to disfavor that class can readily be presumed.”²⁰

The irrationality of taxing feminine hygiene products while excluding similar non-gender healthcare items may mean that the applicable constitutional standard of review will not be determinative at the end of the day. In the New York class action suit, the plaintiffs’ complaint alleged that the classifications were neither substantially related to an important state interest nor rationally related to a legitimate state purpose.²¹ Even applying a rational state interest standard, what “legitimate state purpose” is served by treating, for tax purposes, gauze and adult diapers differently from tampons, when essentially the same function is performed by each product?

The New York Legislature read the writing on the wall, and corrected course by statutory exemption,²² resulting in the legal challenge being dropped. A parallel, and perhaps inspired-by, action in Florida followed closely on the heels of the New York lawsuit and met a similar end.²³ (There is a third suit in Ohio,²⁴ which was stayed pending administrative proceedings and appeal.) While these legal theories have not been rigorously battle-tested as a result, there is some indication of how a court might analyze the issue from a similar proceeding in California.

Upon consideration of cross-motions for summary judgment, a California Superior Court granted the California Department of Tax and Fee Administration’s motion that the matter be dismissed, as the lawsuit itself was procedurally improper — the California Constitution bars any court process to prevent or enjoin the collection of any tax, limiting a taxpayer to an action to recover an illegal tax paid. Perhaps acknowledging the frustration that this narrow avenue for relief posed to prospective constitutional challenges, the superior court judge proceeded to address, in dicta, his views on the equal protection clause argument.

The superior court first brushed off the argument that the tax was facially discriminatory toward women, on grounds that California’s sales tax is imposed on retailers, not consumers, and there was no gender discrimination in applying the tax to retailers. Moreover, as to consumers, “all purchasers are similarly situated in that they are individuals purchasing tangible personal property at retail.”²⁵ Choosing therefore to analyze the issue only through a disparate impact lens, the superior court noted that “at best the record here suggests a heavier tax burden on women than on men to the extent that (1) the Products are necessities, used by all women and rarely purchased for other uses; (2) Viagra is predominantly used by men; and (3) the Products are not exempt from sales tax whereas Viagra is exempt.”²⁶ But the court chose to focus more broadly than on a particular subset of products, noting that there was nothing in the record to indicate whether women faced a heavier tax burden overall when all products that are, and are not, exempt are considered collectively.²⁷ This calls to mind the Supreme Court’s determination in Geduldig that women fared proportionately better when California’s disability insurance system was considered in its entirety.

Finding no evidence of discriminatory intent,²⁸ the superior court went through the motions of a rational basis review, noting that a broad sales tax was a “reasonable and routine” way of generating government revenue by taxing retailers, who may then pass the cost along to purchasers. While the exemption for medicines served to lower the costs of obtaining treatment for medical conditions, the court concluded that feminine hygiene products could just as rationally be considered separate and apart from medicines.²⁹ The tax on such products was, therefore, viewed as constitutional in the eyes of the superior court.

A passing analysis in dicta is certainly not the most rigorous test of weighty constitutional theories, but it does provide a few meaningful take-aways. First, if the relevant affected party is deemed the retailer, rather than the consumer who must ultimately bear the cost, then the argument that the sales tax regime is facially discriminatory is more likely to fail. The reality in most states, however, is that both the sales tax and use tax fall upon the consumer, with the retailer having a collection obligation.

Second, the scope of the discriminatory analysis is likely to be significant. If the focus in considering disparate impact is limited to whether women are disproportionately affected by the failure to exempt tampons and sanitary pads when comparable bodily-related necessities used by both sexes are excluded from taxation, challengers will then have a relatively easy showing. However, if the lens is widened to examine whether a medical product exemption, or similar exemption not including feminine hygiene products, as a whole burdens women more than men, the playing board has changed to one much less favorable to a constitutional challenge.

The third take-away is the difficulty plaintiffs may have in demonstrating discriminatory intent, especially given the breadth of the sales tax base and the often arbitrary nature of statutory exemptions. However, as legislators are made increasingly aware of the discriminatory impact of their failing to exempt feminine hygiene products, the continued refusal to add such products to the list of exempt products could, arguably, provide the necessary proof of discriminatory intent — despite the traditional focus on evidence of contemporaneous discriminatory intent in assessing equal protection clause arguments. It could certainly be argued that the failure to repeal a discriminatory provision in a state tax code is, itself, an intentional reaffirmation of the original action with full knowledge of its impact.³⁰

The failure to exempt menstrual hygiene products, such as tampons and sanitary napkins, while excluding other types of personal hygiene items and health-related goods that are either gender-neutral or primarily used by men, is a clear example of gender bias still enshrined in various state tax codes. This vestige of statutory-based discrimination against women can easily be rectified by state legislatures; and, in the absence of legislative action, it is timely for courts to address the constitutional violation.