Who Benefits from Repealing Tampon Taxes? Empirical Evidence from New Jersey

• Author: Christopher Cotropia,Kyle Rozema
• DOI: http://doi.org/10.1111/jels.12188
• Date: 01 September 2018
• Published date: 01 September 2018

Journal of Empirical Legal Studies

Volume 15, Issue 3, 620–647, September 2018

Who Benefits from Repealing Tampon

Taxes? Empirical Evidence from

New Jersey

Christopher Cotropia, and Kyle Rozema*

Many state and local governments exclude some medical products from the sales tax base,

including some that are primarily used by men such as hair growth products. However,

tampons and other menstrual hygiene products are subject to sales taxes in most states. A

recent social movement advocates for the repeal of these “tampon taxes” and several class

action lawsuits have been filed against states citing equal protection violations. In this arti-

cle, we use the 2005 elimination of menstrual hygiene products from the sales tax base in

New Jersey as a natural experiment to study who benefits from the repeal of tampon taxes.

We find that the tax break is fully shifted to consumers, but that the tax break is not dis-

tributed equally. Low-income consumers enjoy a benefit from the repeal of the tax by

more than the size of the repealed tax. For high-income consumers, the tax break is

shared equally with producers. The results suggest that repealing tampon taxes removes

an unequal tax burden and could make menstrual hygiene products more accessible for

low-income consumers.

I. INTRODUCTION

On March 3, 2016, actress Margo Seibert and others filed a class action lawsuit against

the New York State Department of Taxation and Finance to “eliminate the ‘Tampon Tax’

imposed … on women in New York State” on the grounds that it violates the Equal Pro-

tection Clause.

1

The “tampon tax” referenced in the lawsuit refers to the inclusion of

*Direct correspondence to Kyle Rozema; email: kylerozema@uchicago.edu. Cotropia is Professor of Law and Aus-

tin Owen Research Fellow, University of Richmond School of Law; Rozema is Wachtell Lipton Fellow, University of

Chicago Law School; email: kylerozema@uchicago.edu, website: www.kylerozema.com.

For helpful comments, we are grateful to Mirit Eyal-Cohen, Daniel Hemel, Don Kenkel, Doug Miller, Adam

Picker, Eleanor Wilking, and seminar participants at Midwestern Law and Economics Conference and University

of Richmond School of Law Colloquy series.

1

See Compl., Siebert v. N.Y. St. Dep’t of Tax. & Finance, No. 151800/2016 (N.Y. Sup. Ct. Mar. 3, 2016). The lawsuit

frames the tampon tax as a tax on “women.” The authors understand that there are individuals who do not identify

as a “woman” or “female” and menstruate. Furthermore, there are those who may identify as a “man” or “male”

and menstruate. We will mostly use the term consumer to identify those purchasing menstrual hygiene products,

but at times use the language “female” and “woman” because that is used in the relevant lawsuits and most aca-

demic and popular press discussions surrounding recent efforts to eliminate tampon taxes.

620

menstrual hygiene products, such as tampons and sanitary pads,

2

in the sales tax base.

3

Given that almost all menstruating women essentially must use menstrual hygiene prod-

ucts in today’s society, the main argument is that the tax is akin to imposing a tax on

women.

4

The lawsuit notes that many medical products used primarily by men, including

Rogaine, are not subject to sales taxes. The lawsuit is an illustration of a movement to

exclude menstrual hygiene products from sales taxes.

5

In 2017, 15 states introduced legis-

lation targeting the tampon tax.

6

If passed, these states would join 13 other states and the

District of Columbia that do not tax menstrual hygiene products.

The emphasis on women bearing the burden of tampon taxes is a crucial point for

the movement. To our knowledge, however, no empirical evidence has documented the

extent that the tax break from repealing tampon taxes is shifted to consumers. The empirical

question of who bears the burden of tampon taxes is important because tax laws only dictate

how much a tax is and who remits the tax, but who bears the burden of a tax is not necessar-

ily who remits the tax. Social scientists distinguish the legal incidence of the tax (how much

a tax is and who remits the tax) from the economic incidence of the tax (who bears the bur-

den of the tax), and emphasize that the behavior of buyers and sellers in markets—not

laws—determines who bears the burden of the tax (the economic incidence). To see the dis-

tinction, consider the following example. Suppose that Margo Seibert purchases a menstrual

hygiene product with a retail price of $5.00 and the product is subject to a 5 percent sales

tax. The after-tax price of the product is $5.25, and the store collects the $0.25 tax and remits

the collected tax to the government. Does this mean that Margo would be better off by $0.25

if there was no sales tax on the menstrual hygiene product?

Not necessarily. To see why, we must assess what happens to consumer prices in the

counterfactual world in which menstrual hygiene products are no longer taxed. Now sup-

pose that a law is passed that excludes menstrual hygiene products from the sales tax

base, and that the retail price of the product Margo purchased increases from $5.00 to

$5.25. Because retail price fully adjusted after the product was not subject to the tax,

Margo enjoyed no benefit from the tax repeal: Margo paid $5.25 for the same product

2

We will collectively refer to these products as menstrual hygiene for menstrual hygiene products. Menstrual

hygiene products are also commonly referred to as feminine hygiene products. Some have argued that the use of

the term “feminine” when describing these products needs to be stopped because of the implicit information it

conveys about the user of the products and because it “perpetuates the fear of body parts and fluids”

(Licorish 2017).

3

Unlike excise taxes that are specific to some goods like alcohol and cigarettes, this tampon tax instead refers to

the application of the general state sales tax to menstrual hygiene products.

4

The tampon tax in New York, the complaint argues, “denies women equal protection and discriminates against

women, because a tax on [menstrual hygiene] products is on its face a tax on women, and because it results in the

disparate treatment of women.” “A tax on wearing yarmulkes is a tax on Jews.” quoting Bray v. Alexandria Women’s

Health Clinic, 506 U.S. 263, 270 (1993) (Scalia, J., dissenting).

5

Jennifer Weiss-Wolf of the Brennan Justice Center at New York University School of Law identifies this movement

as part of the “mainstream policy agenda” promoting “[m]enstural equality” (Weiss-Wolf 2016).

6

See the Appendix for more details.

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