Sales Tax Slice: States Near Unanimous in Not Exempting Nonprescription Shaving Products as Drugs


ChesterAArthur

It’s November, the month when bristly bros dubiously attempt to raise awareness of any one or combination of a number of man issues by growing a moustache. Formally begun in 2014 to raise funds for the Prostate Cancer Foundation of Australia, the Movember movement has grown into a global campaign addressing prostate and testicular cancer, mental health, and suicide prevention. Perhaps it will be persuaded to add tax exemptions for shaving products to the list next year.

Most states that have addressed the issue do not exempt nonprescription shaving products from sales and use tax. For instance, Connecticut specifically excludes shaving products from its exemption for nonprescription drugs and medicines. Florida excludes shaving products from its medical products exemption. Likewise, Maryland excludes shaving products from its definition of exempt medicine.

Minnesota and New Jersey both exempt over-the-counter drugs other than grooming and hygiene products and both provide that shaving products are taxable as grooming and hygiene products. These are Streamlined Sales Tax states and conform to the Streamlined Sales and Use Tax Agreement’s definition of “grooming and hygiene products” as “soaps and cleaning solutions, shampoo, toothpaste, mouthwash, antiperspirants, and sun tan lotions and screens.” It is not clear how shaving products fit into this definition. As cleaning solutions, perhaps? While Virginia is not a member state, its definition of “drug” substantially conforms to the definition under the agreement. Virginia has determined that nonprescription medicated shaving cream qualifies for exemption in the state as a drug. 

Movemberists getting shaved professionally will not be taxed on these services in most states. In states that do not tax shaving services, barbers are instead required to pay tax on the shaving products they purchase.

To what extent have the Streamlined Sales and Use Tax Agreement’s standardized definitions simplified taxation within member states? Continue the discussion on Bloomberg Tax’s State Tax Group on LinkedIn

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