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Taxes

Taking Down The Tampon Tax

Within the last five years, the voices calling for the repeal of sales and use taxes on menstrual hygiene products (MHPs) have grown louder and more insistent. And they are being heard.

Since 2016, of the 45 states and the District of Columbia that levy sales and use taxes, 15 (including the District) have exempted MHP from tax. In 2019 22 state legislatures considered eliminating the tax. Although a good start, as of February, 30 states continue to subject these products to sales and use taxes.

A few sales tax states have exempted MHPs for decades. Minnesota dropped its tax in 1981, Pennsylvania did so in 1991, and New Jersey followed suit in 2005. 

Since 2016, in what may be a coincidence, the legislative activity to exempt MHPs has come on the heels of a class action lawsuit filed against the New York State Department of Taxation and Finance, a move that persuaded the State Legislature to repeal the tax the same year. Class action suits were filed in CaliforniaFlorida, and Ohio, all of which resulted in the repeal of sales and use taxes on MHPs.

The most recent class action suit was filed in August 2020 in Michigan. The suit, as with the others filed, argues that subjecting MHPs to sales and use taxes violates the 14th Amendment’s equal protection clause.

The question is what level of scrutiny should the courts apply in analyzing whether the statutes imposing sales and use tax on MHPs unconstitutionally discriminate against women?

Why Not Strict Scrutiny?

When determining whether a state statute, tax or otherwise, falls afoul of the equal protection clause, Supreme Court jurisprudence instructs a court to examine the statute through one of three analytic lenses — strict, intermediate, or heightened scrutiny — and rational basis.

Strict scrutiny analysis is warranted when a statute makes classifications based on a suspect class (that is, race, national origin, alienage, or religion) or materially affects a fundamental constitutional right such as the right to vote or marry. Statutes requiring heightened or intermediate scrutiny include those that make classifications based on a quasi-suspect class, such as age or gender.

To be upheld, the legislation must then establish an “exceedingly persuasive justification” for the classification, in that the legislation must “serve important governmental objectives and the discriminatory means employed are related to the achievement of those objectives.” 

The most lenient test is rational basis, for which the legislation need only be shown to have a legitimate government purpose, and that it is rationally related to the legislative objective.

In Rodriguez the Court ruled that access to education is not a fundamental right, and it defined a suspect class as one “saddled with such disabilities, or subjected to such a history of purposeful unequal treatment, or relegated to such a position of political powerlessness as to command extraordinary protection from the majoritarian political process.” 

If one examines U.S. history from its founding until today, it is difficult to see how or why the definition of suspect class does not apply to women. Like people of color, married women had no civil rights, and an unmarried woman was not much better off.

Indeed, during the 19th and 20th centuries, the fights for equality by people of color and women were parallel, and they were allies in their respective causes until 1870 when Congress passed the 15th Amendment, which states that voting rights cannot be “denied or abridged by the United States or by any state on account of race, color, or previous condition of servitude.” As a result, men of any race were now eligible to vote. 

Fifty years later, in 1920, women were finally granted the right to vote under the 19th Amendment. Women were just as powerless in the political process as people of color. And, like people of color, women were legally discriminated against in almost every aspect of American life until Congress passed laws prohibiting such treatment, and even then, it took the Court to rule that these laws applied to women too.

Making the Case for Heightened Scrutiny Discrimination

Despite this strikingly similar history, sex-based classifications, as opposed to race-based classifications, are only entitled to heightened scrutiny.

Regarding sales and use taxes on MHPs, where does this leave us? Can a case be made that the tax on MHPs is a facial sex-based classification? Or is it facially neutral, and thus passes the heightened scrutiny test?

An argument can be made that it is both, and moreover would fail the facially neutral test. As a facial sex-based classification, it is plausible to say that MHPs are a proxy for women, since only women need MHPs.

This differs from pregnancy, which the Court has said cannot serve as a proxy for women because even though only women become pregnant, pregnancy is an “objectively identifiable physical condition with unique characteristics” that not all women share. 

That is not true of menstruation. A woman can choose to become pregnant or not. But menstruation is a monthly occurrence that no woman can avoid during the decades between puberty and menopause, absent a drastic surgical procedure or other physical condition that prevents menstruation.

To paraphrase an observation made by Justice Antonin G. Scalia, taxing yarmulkes while exempting other religious clothing amounts to an unconstitutional tax on Jews; taxing MHPs while excluding various other necessity-based products is an unconstitutional tax on women.

Concerning facial neutrality, it is beyond dispute that a sales tax on MHPs is neutral in that all persons who purchase MHPs are charged the tax, and thus heightened scrutiny should not be triggered. The issue, however, goes deeper.

Heightened scrutiny under the facially neutral model requires a plaintiff to show that the tax has a disparate impact, and there must have been discriminatory intent on the part of the legislature. The disparate impact part of the examination is easily satisfied, since it is only women who purchase MHPs for the most part.

As for discriminatory intent, while it would be difficult, if not impossible, to show that legislators intended to discriminate against women by imposing the tax, it would not be illogical to infer that “the tax treatment of [MHPs] as non-necessities is the result of a combination of indifference, lack of understanding, and discomfort with discussions or consideration of a women’s biological processes.” 

To quote former President Barack Obama during an interview, “I have to tell you, I have no idea why states would tax these as luxury items. I suspect it’s because men were making the laws when those laws were passed.” 

More important, in recent years, the Court has retreated from focusing on the formal language of a facially neutral, discriminatory statute and its intent, focusing instead on a statute’s effects. In Obergefell, the Court struck down the Defense of Marriage Act, which banned same-sex marriage, thus preventing the plaintiff from claiming the federal estate tax deduction on her deceased wife’s estate.

Likewise, Justice Sandra Day O’Connor did not examine the motive behind Texas’s criminalization of same-sex sodomy, even though it applied to everyone and did not mention sexual orientation. The equal protection violation lay in that engaging in same-sex sodomy is “closely correlated to being homosexual,” and thus the law is discriminatory. 

Given that the Court has moved away from proving intent and instead has focused on effects, it is not unlikely that a plaintiff protesting the sales tax on MHPs could meet the heightened scrutiny test for a facially neutral, yet discriminatory, tax statute.

Conclusion

In recent years, the movement to repeal sales and use taxes on MHPs has been gaining steam. Several class action lawsuits have been filed, resulting in the legislative amendment of the tax law before the suits progressed further in the state court system.

Other states repealed their tax laws without the pressure of litigation. Yet, to date, more than half the states continue to tax MHPs.

There are very good arguments that taxing MHPs violates the equal protection clause because it discriminates against women.

As the tax is sex-based, it is entitled to heightened scrutiny in the courts, under both the facially discriminatory and facially neutral tests. It has been suggested that the MHP tax is facially discriminatory and discriminatory though facially neutral.

In any event, there is no doubt that unless and until state legislatures change their tax laws, these class action lawsuits will continue, and will force their hand.

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