Under House Bill, Indiana would no longer tax diapers.

2022-07-29 22:00:06 By : Mr. Fisher he

A bill from Indiana House Republicans would do away with the state’s 7% sales tax on diapers, reflecting a push by lawmakers to provide inflation relief for families in need. 

House Bill 1001 – the House’s answer to Senate Bill 3 which does not cut the diaper tax – proposes an automatic taxpayer refund for Hoosiers in addition to greater tax exemptions for adoptive families. This proposal could still be changed during the legislative session. 

The proposed House bill also details millions of dollars in funding for programs for families and children, including $30 million for Medicaid assistance.  The exemption for diapers could reduce sales tax revenue by as much as $6.2 million in the fiscal year 2023, depending on when the exemption goes into effect.

Legislation to axe Indiana's diaper tax never made it through committees in 2019 and 2020 with Democratic lawmakers penning the bills. According to the National Diaper Bank Network, 31 states tax diapers with Indiana being among the higher tax rates.

During the 2020 legislative session, Rep. B. Patrick Bauer, D-South Bend, proposed that the General Assembly do away with the tax, but it never passed out of the Ways and Means Committee. 

In theregular 2022session, Rep. Carey Hamilton, D-Indianapolis, proposed an amendment to tax-related House Bill 1002, that called for tampons, children’s diapers, products used by adults to manage incontinence and over-the-counter drugs to be exempt from the state’s sales tax. 

This proposal did not pass, with the vast majority of Republicans voting against the measure.

During the House’s Ways and Means committee meeting Tuesday, the Indiana Community Action Poverty Institute expressed support for the diaper tax measure in the proposed bill. 

“We know how expensive diapers are for low-income families. Sometimes they can eat up a large chunk of their budget so this will be a help to them,” Jessica Fraser, director of ICAPI, said. 

A pack of size one Pampers Swaddlers 96-count diapers costs $27.49 at Target in Indiana. Tax on this item would total $1.92.

In a statement ahead of session, House Speaker Todd Huston, R-Fishers, reiterated that House leadership would pair this bill with whatever abortion-related proposal passes. 

"In anticipation of a bill protecting life passing during the special session, House Republicans will also pursue making significant investments to support moms, babies and families,” Huston said. 

Other states, including Florida and Maryland, have moved to cut their own diaper taxes as a means to aid needy families and elderly people who use the products. 

House Bill 1001 closely aligns with Gov. Eric Holcomb’s $1 billion tax relief plan that would give every Hoosier a $225 tax refund.

That refund would be in addition to the $125 automatic refund taxpayers received upon filing their 2022 taxes, from swelled revenues last fiscal year.

If passed, Senate Bill 3 would place a cap on the state's sales tax on gas and not exceed $0.295 per gallon. The proposed legislation would also suspend sales tax on utilities. 

Contact IndyStar's general assignment reporter Rachel Fradette at rfradette@gannett.com or follow her on Twitter: @Rachel_Fradette.