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Orr proposal would remove sales tax from feminine hygiene products, diapers

Menstrual hygiene products, baby wipes and diapers would not be subject to state and local sales taxes under a bill planned for the 2024 legislative session.

Sen. Arthur Orr’s proposal would also remove the taxes from baby bottles, breast pumps and related equipment and maternity clothing, according to a draft shared with Alabama Daily News.

Orr, R-Decatur, said he was first interested in untaxing feminine hygiene products like several other states have.

“Thinking about the issue, it makes no sense that the state or cities and counties should be taxing a necessity like this that’s visited on one gender,” Orr told ADN.

As for the baby supplies, Orr said Alabama touts itself as a pro-life state.

“We need to support families and those having children,” he said. 

The state’s sales tax on most items is 4%, but with city and county taxes added the total can be as high as 11% in some parts of the state. 

“To tax those items in some parts of the state at 9%, 10%, 11% is certainly not supportive of those raising small children,” Orr said.

Rep. Neil Rafferty, D-Birmingham, sponsored a similar bill in this year’s session. It did not advance out of the House education budget committee.

The fiscal impact of Orr’s proposal would be nearly $10 million a year in sales tax revenue from the state’s Education Trust Fund. Cities and counties would lose about $13.1 million. 

The draft bill says the tax cut would take effect Oct. 1 of next year, but Orr said it may have to be phased in.

“It’s important to put these tax policy decisions before the Legislature, however, given our declining revenues year-over-year, we may have to phase in some of these reductions to reach a total exemption,” he said. “We’ll just have to see what we can absorb.” 

In October, revenues to the Education Trust Fund were down 13.8% from the year prior. 

Orr, chair of the Senate education budget committee, said he expects in the upcoming legislative session multiple tax credit bills that could help various areas of the economy but would also pull from education revenues.

“But I believe this bill should receive a high priority,” he said.

Currently, Alabama and 20 other states collect sales tax on feminine hygiene items, according to the Alliance for Period Supplies.

In 2022, Rep. Rolanda Hollis, D-Birmingham, successfully advocated for legislation to dedicate $200,000 in the education budget to supply free feminine hygiene products to students in low-income schools. 

As for diapers, 26 states collect sales tax, according to the National Diaper Bank Network, a non-profit that advocates to end diaper needs. It says 50% of families struggle to supply diapers to their babies. 

The session starts Feb. 7. 

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