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RTA “Pink Tax” Exemption
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DESCRIPTION: The resolution would authorize the RTA one percent (1%) Sales and Use Tax exemption on the purchase of feminine hygiene products, diapers, or both for personal use. |
AGENDA NO: Click or tap here to enter text. |
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ACTION REQUEST: ☒ Approval ☐ Review Comment ☐ Information Only ☐ Other |
RECOMMENDATION:
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In accordance with Act 138 of the State of Louisiana 2020 legislative session, staff recommends the adoption of a resolution that would authorize the RTA sales tax exemption on the purchase in Orleans Parish of feminine hygiene products, diapers, or both for personal use.
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ISSUE/BACKGROUND:
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The Louisiana Legislature enacted Act 138 during the 2020 regular session authorizing a political subdivision to exempt purchases of feminine hygiene products, diapers, or both for personal use from all or part of the sales and use tax levied by the political subdivision.
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DISCUSSION:
Orleans Parish voters approved the RTA to impose and collect a one percent (1%) sales and use tax effective June 1, 1985. The RTA one percent (1%) sales and use tax does not have an expiration date. Currently, RTA collects the one percent (1%) sales tax on the sale of diapers and feminine hygiene products, commonly known as the “Pink” tax.
Act 138 of the State of Louisiana 2020 legislative session allows local taxing authorities to exempt or end the pink tax collection. The New Orleans City Council (2.5%) and the Orleans Parish School Board (1.5%) have approved the pink tax exemption for their respective sales tax.
FINANCIAL IMPACT:
The local 5% sales tax is shared by the City of New Orleans (2.5%), the Orleans Parish School Board (1.5%) and the RTA (1%). The average annual cost of diapers for one child is $1460, according to Lift Louisiana. Exempting diapers from the local 5% sales tax would result in a savings of nearly $73.00 in sales tax per child per year. Lift also estimates that the average woman spends approximately $160.00 per year on feminine hygiene products; this exemption would save $7.95 in sales tax each year. According to Lift, this exemption could save New Orleans residents $2.5 million in sales tax. Therefore, the RTA’s 20% pro-rated share of the $2.5 million sales tax revenue exemption would be $500,000 annually.
NEXT STEPS:
Adoption of the Resolution.
ATTACHMENTS:
1. Resolution
2. RTA January 19,1985 Sales Tax Ballot
3. State of Louisiana Pink Tax Act No. 138
4. City of New Orleans Pink Tax Exemption Ordinance
5. OPSB Resolution 15-22 Pink Tax Exemption
Prepared By: Dacia D. Johnson
Title: Administrative Analyst
Reviewed By: Gizelle-Johnson Banks
Title: Chief Financial Officer
Reviewed By: Mark A. Major
Title: Deputy CEO Finance and Administration
9/13/2022
Alex Wiggins Date
Chief Executive Officer