LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6602 NOTE PREPARED: Dec 15, 2020
BILL NUMBER: HB 1273 BILL AMENDED:
SUBJECT: Sales Tax Exemption for Feminine Hygiene Products.
FIRST AUTHOR: Rep. Hamilton BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: X GENERAL IMPACT: State
X DEDICATED
FEDERAL
Summary of Legislation: This bill provides that sales of feminine hygiene products are exempt from the
state Gross Retail Tax.
Effective Date: July 1, 2021.
Explanation of State Expenditures: The workload of the Department of State Revenue (DOR) could
increase to administer the Sales Tax exemption provided by the bill. The bill’s requirements are within the
DOR’s routine administrative functions and should be able to be implemented with no additional
appropriations, assuming near customary agency staffing and resource levels.
Explanation of State Revenues: The bill provides a Sales Tax exemption for feminine hygiene products.
The exemption could reduce revenue by a significant amount. The potential revenue loss is indeterminable
and would depend on several factors. However, it is possible to set a benchmark. Indiana’s population of
females between the ages of 10 and 54 is approximately 1.95 million. If this population spends an average
of $30 each year on exempt items, the annual revenue loss could be $4.1 M. The fiscal impact would begin
in FY 2022. Sales Tax revenue is deposited in the General Fund (99.838%), Commuter Rail Service Fund
(0.131%), and Industrial Rail Service Fund (0.031%).
Additional Information - Minnesota and New Jersey both exempt feminine hygiene products from their state
sales taxes. Minnesota estimates that this exemption from its 6.875% sales tax costs the state $3.4 M
annually. New Jersey estimates that the cost of this exemption from its 6.625% sales tax is approximately
$6.5 M.
HB 1273 1
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Department of State Revenue.
Local Agencies Affected:
Information Sources: U.S. Census Bureau, American Community Survey, 5-Year Estimates, 2019.
Minnesota Department of Revenue, State of Minnesota Tax Expenditure Budget, Fiscal Years 2020-2023.
New Jersey Division of Taxation, Fiscal Year 2021 Tax Expenditure Report.
Fiscal Analyst: Lauren Tanselle, 317-232-9586.
HB 1273 2