Following discussion of several proposals to cut the Hall tax on stock dividends, state Sen. Sara Kyle and state Rep. Sherry Jones have introduced legislation to cut sales taxes on basic necessities.
"We have a $500 million budget surplus, and our colleagues have spent a lot of effort trying to cut taxes on investment income and stock dividends," Sen. Kyle said. "We are suggesting an alternative that would benefit every single Tennessean at every income level. We have some of the highest sales taxes in the nation, and it's wrong to take money out of people's pockets on the basic necessities of life."
SB 2285 and HB 2059 would reduce the sales tax on diapers, feminine hygiene products and nonexempt over-the–counter drugs from 7 percent to 5 percent, the same rate charged on food.
"We are shy to talk about periods, but they are a fact of life for 1 in 2 people, and feminine hygiene products are required for human dignity," Rep. Jones said. "We shouldn't tax a woman to have her dignity, especially considering the gender wage gap. With this bill, we at least recognize the necessity with a lower rate equal to the sales tax on food. At the same time, we can lower the tax rate on all necessities to help all families, rather than just the few who have investment income."
All but five states impose sales taxes on feminine hygiene, and similar legislation has been filed in other states.
Cutting the Hall tax would cost the state $166 million a year and only people who earn income from investments and dividends.
Compare that to the cost of $14 million a year, to benefit 1.7 million women between 15 and 55 who need feminine hygiene products and the families of the 240,000 children under 3 who need diapers.