June 29, 2012
We think about basic needs and their availability to people struggling to make ends meet. But there is not a universal definition of what constitutes a basic need, or agreement on whether such needs should be taxed. That is apparent when considering the sales tax policies of each state. For the most part, each state has its own approach to sales tax–whether there is one, what rate it will be, and what it applies to. Some states, like Alaska, Delaware, New Hampshire, Montana, and Oregon, opt not to have a sales tax at all. (Hawaii does not officially have a sales tax, but it has an excise tax which business can pass on to the consumer, so it is essentially a sales tax.) Many states exempt certain basic necessities from tax, but each state has its own approach to what is considered a basic necessity. For example, several states exempt food, but they often have individual definitions of what counts as food. Likewise, some state exempt medical supplies, which for some states include all diapers (as in Massachusetts), adult diapers and incontinence supplies only (as in Connecticut, Maryland, and Nebraska), and in other states explicitly do not include diapers. In other states, diapers are not taxed because they fall under a general exemption for clothing (as in Minnesota, New Jersey, New York, Pennsylvania, and Vermont). Still other states have annual sales tax holidays on certain items (generally during the first week of August or so as families are doing “back to school” shopping), often including diapers.
We have a Sales Tax Survey identifying the specific sales tax policies as they relate to diapers for each state . Thanks to the Yale Law School Arthur Liman Research Project Students, Matthew Smith, Irina Vaynerman, and Tara Rice for their legal research assistance.
You can find more interesting research related to diaper need on our website here.