HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 10/05/2021 - FIRST READING OF ORDINANCE NO. 126, 2021, AMENDING Agenda Item 9
Item # 9 Page 1
AGENDA ITEM SUMMARY October 5, 2021
City Council
STAFF
Jennifer Poznanovic, Project and Revenue Manager
Ryan Malarky, Legal
SUBJECT
First Reading of Ordinance No. 126, 2021, Amending Chapter 25 of the Code of the City of Fort Collins
Relating to Sales and Use Tax to Advance Gender Equity.
EXECUTIVE SUMMARY
The purpose of this item is to establish an exemption from the City’s sales and use tax for menstrual care
products, which is one of the 2021-2023 Council priorities to advance gender equity in the City’s Sales Tax
Code.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
In July 2021, Council formally adopted the 2021-2023 City Council Priorities. Within the High Performing
Government Strategic Outcome, Council identified as a priority to advance gender equity in the City’s Sales
Tax Code by establishing an exemption from sales and use tax for menstrual care products.
Other taxing entities provide a similar exemption. Effective January 2018, House Bill 17-1127 created a sales
and use tax exemption for “feminine hygiene products.” The State defines feminine hygiene products to mean
“tampons, menstrual pads and sanitary napkins, pantiliners, menstrual sponges, and men strual cups.” Below
are several examples of how these products are identified and defined in other municipalities.
• Denver -“Feminine hygiene products” means “products that are designed to absorb or contain menstrual
flow. Feminine hygiene products include, but are not limited to, tampons, menstrual pads and sanitary
napkins, pantiliners, menstrual sponges and menstrual cups .”
• Aurora - “Menstrual care products” means “tampons, panty liners, menstrual cups, sanitary napkins, and
other similar tangible personal property designed for hygiene in connection with the human menstrual
cycle, but does not include "grooming and hygiene products".
“Grooming and hygiene products” means “soaps and cleaning solutions, shampoo, toothpaste,
mouthwash, antiperspirants, and suntan lotions and screens, regardless of whether the items meet the
definition of ’over-the-counter-drugs."
After review of these other entities’ exemptions, staff is recommending the following terms be used to create
an exemption from sales and use tax:
Agenda Item 9
Item # 9 Page 2
“Menstrual care products” shall mean tampons, panty liners, menstrual cups, sanitary napkins, and other
similar tangible personal property designed for hygiene in connection with the human menstrual cycle but
does not include “grooming and hygiene products”.
“Grooming and hygiene products” shall mean soaps and cleaning solutions, shampoo, toothpaste,
mouthwash, antiperspirants, and suntan lotions and screens.
CITY FINANCIAL IMPACTS
According to the Final Fiscal Note for House Bill 17-1127, an estimated 27% of the state population is
menstruating. Applying that percentage to Fort Collins, that would be an estimated menstruating population of
47,479 (based on 2020 population). On average, $60 is spent on menstrual care products per menstruating
person per year. Based on those figures, the estimated revenue loss from this proposed exemption would be
$110,000 per year. (Attachments 1 and 2)
BOARD / COMMISSION RECOMMENDATION
Establishing an exemption from sales and use tax for menstrual care products was discussed by the Council
Finance Committee at its September 1, 2021, meeting. The Council Finance Committee recommended as next
steps that staff bring an ordinance to Council in October 2021.
PUBLIC OUTREACH
Staff plans to send letters to notify convenience stores, grocery stores, big box stores, and online retailers that
typically sell menstrual care products regarding the updated exemption. To give businesses time to update
their point of sales systems, staff is recommending the Ordinance be effective 60 days after second reading.
To notify residents, staff plans to send a press release.
ATTACHMENTS
1. House Bill 17-1127 - Fiscal Note (PDF)
2. House Bill 17-1127 (PDF)
HB17-1127Colorado
Legislative
Council
Staff
FINAL
FISCAL NOTE
FISCAL IMPACT: State Local Statutory Public Entity Conditional No Fiscal Impact
Drafting Number:
Prime Sponsor(s):
LLS 17-0023
Rep. Lontine
Sen. Martinez Humenik
Date:
Bill Status:
Fiscal Analyst:
May 16, 2017
Postponed Indefinitely
Greg Sobetski (303-866-4105)
BILL TOPIC:EXEMPT FEMININE HYGIENE PRODUCTS FROM SALES TAX
Fiscal Impact Summary FY 2017-2018 FY 2018-2019
State Revenue ($1.2 million)($2.4 million)
General Fund (1.2 million)(2.4 million)
State Expenditures
TABOR Impact ($1.2 million)($2.4 million)
Appropriation Required: None.
Future Year Impacts: Ongoing state revenue decrease.
NOTE: This bill was not enacted into law; therefore, the impacts identified in this analysis
do not take effect.
Summary of Legislation
Beginning January 1, 2018, this bill creates a state sales and use tax exemption for
feminine hygiene products, including tampons, menstrual pads, pantiliners, menstrual sponges,
and menstrual cups. The exemption is not extended by default to counties or municipalities that
levy sales taxes, though these local governments may choose to incorporate the exemption at any
time.
State Revenue
The bill is expected to reduce General Fund sales and use tax revenue by $1.2 million in
FY 2017-18 and $2.4 million in FY 2018-19, and by similar amounts in subsequent years. The
revenue reduction for FY 2017-18 represents a half-year impact based on the January 1, 2018,
effective date for the sales and use tax exemption in the bill.
Assumptions. According to the National Institute of Health, girls experience menarche,
or first menstruation, at age 12 on average, and women experience menopause at age 51 on
average. The State Demographer estimates that Colorado's population of women and girls
between ages 12 and 51 will average 1,523,000 in 2018 and 1,551,000 in 2019. These forecasts
were reduced to reflect the population of women expected to stop menstruating while pregnant or
nursing, but not to accommodate other factors that halt menstruation, including medical
ATTACHMENT 1
Page 2 HB17-1127
May 16, 2017
procedures, health conditions, or voluntary menstrual suppression. To the extent that these factors
reduce consumption of feminine hygiene products, the revenue reduction will be less than
estimated.
Based on estimates from the Centers for Disease Control and Prevention, this fiscal note
assumes that 59.6 percent of feminine hygiene product use is attributable to menstrual pads and
pantiliners, and that 40.4 percent of product use is attributable to tampons. Menstrual sponges and
menstrual cups are also exempted from sales tax in the bill but were not considered separately in
this fiscal analysis. It is assumed that women who menstruate for an average of 13 cycles annually
use about 235 menstrual pads or tampons, or some combination of these. Based on current retail
prices, pre-tax spending on the products exempted in the bill averages $60 per woman annually,
generating $1.71 in state sales tax after netting out the state's 3.33 percent vendor fee.
TABOR Impact
This bill reduces state revenue from sales and use taxes, which will reduce the amount of
money required to be refunded under TABOR. TABOR refunds are paid out of the General Fund.
Since the bill reduces both revenue to the General Fund and the refund obligation by equal
amounts, there is no net impact on the amount of money available in the General Fund for the
budget. However, the bill will reduce money available for the General Fund budget in the future
during years when the state does not collect money above the TABOR limit.
Local Government Impact
The sales tax exemption for feminine hygiene products is not by default extended to
counties or municipalities. However, the bill is expected to reduce revenue to special districts
collecting sales taxes on the same tax base as the state. Regional Transportation District (RTD)
sales tax revenue is expected to decrease by $240,000 in FY 2017-18 and $495,000 in
FY 2018-19. Scientific and Cultural Facilities District (SCFD) sales tax revenue is expected to
decrease by $24,000 in FY 2017-18 and $50,000 in FY 2018-19.
To the extent that other local governments choose to authorize the exemption at a local
level, sales tax revenue collected by these jurisdictions will be reduced. These impacts are not
estimated.
Effective Date
The bill was postponed indefinitely by the House Appropriations Committee on May 5, 2017.
State and Local Government Contacts
Counties Information Technology Municipalities
Regional Transportation District Revenue Special Districts
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: www.leg.colorado.gov/fiscalnotes/
First Regular Session
Seventy-first General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 17-0023.01 Kate Meyer x4348 HOUSE BILL 17-1127
House Committees Senate Committees
Finance
Appropriations
A BILL FOR AN ACT
CONCERNING A SALES TAX EXEMPTION FOR FEMININE HYGIENE101
PRODUCTS.102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov/.)
The bill creates a state sales tax exemption, commencing January
1, 2018, for all sales, storage, and use of feminine hygiene products. The
bill further specifies that local statutory taxing jurisdictions may choose
to adopt the same exemption by express inclusion in their sales and use
tax ordinance or resolution.
HOUSE SPONSORSHIP
Lontine, Danielson, Esgar, Arndt, Hooton, Mitsch Bush, Winter, Ginal, Michaelson Jenet,
Kraft-Tharp, Jackson, Herod, Pettersen
SENATE SPONSORSHIP
Martinez Humenik,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute.
ATTACHMENT 2
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. Legislative declaration. The general assembly2
hereby finds and declares that the intended purpose of the tax expenditure3
in this act is to increase the affordability of feminine hygiene products4
and to redress the inequitable burden that such tax places on the millions5
of women in Colorado for whom such products are medically essential. 6
SECTION 2. In Colorado Revised Statutes, 39-26-717, amend7
(1) introductory portion, (1)(k), and (1)(l); and add (1)(m) and (2)(a.5) as8
follows:9
39-26-717. Drugs and medical and therapeutic devices -10
definitions. (1) The following shall be ARE exempt from taxation under11
the provisions of part 1 of this article ARTICLE 26:12
(k) All sales of nonprescription drugs or materials when furnished13
by a licensed provider as part of professional services provided to a14
patient; and15
(l) All sales of corrective eyeglasses, contact lenses, or hearing16
aids; AND17
(m) ALL SALES OF FEMININE HYGIENE PRODUCTS PURCHASED ON18
AND AFTER JANUARY 1, 2018.19
(2) As used in this section, unless the context otherwise requires:20
(a.5) "FEMININE HYGIENE PRODUCTS" MEANS TAMPONS,21
MENSTRUAL PADS AND SANITARY NAPKINS, PANTILINERS, MENSTRUAL22
SPONGES, AND MENSTRUAL CUPS.23
SECTION 3. In Colorado Revised Statutes, 29-2-105, amend (1)24
introductory portion and (1)(d)(I) introductory portion; and add25
(1)(d)(I)(O) as follows:26
HB17-1127-2-
29-2-105. Contents of sales tax ordinances and proposals -1
repeal. (1) The sales tax ordinance or proposal of any incorporated town,2
city, or county adopted pursuant to this article shall MUST be imposed on3
the sale of tangible personal property at retail or the furnishing of4
services, as provided in paragraph (d) of this subsection (1) SUBSECTION5
(1)(d) OF THIS SECTION. Any countywide or incorporated town or city6
sales tax ordinance or proposal shall MUST include the following7
provisions:8
(d) (I) A provision that the sale of tangible personal property and9
services taxable pursuant to this article shall be IS the same as the sale of10
tangible personal property and services taxable pursuant to section11
39-26-104 C.R.S., except as otherwise provided in this paragraph (d)12
SUBSECTION (1)(d). The sale of tangible personal property and services13
taxable pursuant to this article shall be IS subject to the same sales tax14
exemptions as those specified in part 7 of article 26 of title 39; C.R.S.;15
except that the sale of the following may be exempted from a town, city,16
or county sales tax only by the express inclusion of the exemption either17
at the time of adoption of the initial sales tax ordinance or resolution or18
by amendment thereto:19
(O) THE EXEMPTION FOR SALES OF FEMININE HYGIENE PRODUCTS20
AS SPECIFIED IN SECTION 39-26-717 (1)(m).21
SECTION 4. Act subject to petition - effective date. This act22
takes effect at 12:01 a.m. on the day following the expiration of the23
ninety-day period after final adjournment of the general assembly (August24
9, 2017, if adjournment sine die is on May 10, 2017); except that, if a25
referendum petition is filed pursuant to section 1 (3) of article V of the26
state constitution against this act or an item, section, or part of this act27
HB17-1127-3-
within such period, then the act, item, section, or part will not take effect1
unless approved by the people at the general election to be held in2
November 2018 and, in such case, will take effect on the date of the3
official declaration of the vote thereon by the governor.4
HB17-1127-4-
-1-
ORDINANCE NO. 126, 2021
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING CHAPTER 25 OF THE CODE OF THE CITY OF FORT COLLINS
RELATING TO SALES AND USE TAX TO ADVANCE GENDER EQUITY
WHEREAS, on July 20, 2021, the City Council adopted Resolution 2021-077,
establishing the City Council’s priorities for action during the 2021-2023 Council term; and
WHEREAS, included in those priorities was the advancement of gender equity in the
City’s sales and use tax ordinances by establishing an exemption from sales and use tax for
certain menstrual care products; and
WHEREAS, Article XX, Section 6.g. of the Colorado Constitution grants to the City, as a
home rule municipality, all powers necessary to levy and collect taxes for municipal purposes,
subject to any limitations in the Colorado Constitution; and
WHEREAS, on November 16, 1967, the City Council, in the exercise of its home rule
taxing powers, adopted Ordinance No. 058, 1967, to levy, collect and enforce beginning on
January 1, 1968, a sales and use tax on the purchase of tangible personal property sold at retail in
the City and on certain taxable services provided in the City (the “Sales and Use Tax Code”);
and
WHEREAS, the Sales and Use Tax Code is currently found in Chapter 25, Article III of
the City Code, which has been significantly amended many times since its adoption in 1967; and
WHEREAS, City Council hereby finds that amending the City Code as proposed in this
Ordinance is in the best interest of the City and its taxpayers and promotes the health, safety and
welfare of the community by providing for gender equity in the imposition of tax on certain
menstrual care products.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That Section 25-71 of the Code of the City of Fort Collins is hereby
amended by the addition of two new definitions which read in their entirety as follows:
Sec. 25-71. Definitions
The following words, terms and phrases, as used in this Article, shall have the following
meanings:
. . .
-2-
Grooming and hygiene products shall mean soaps and cleaning solutions, shampoo, toothpaste
mouthwash, antiperspirants, and suntan lotions and screens.
. . .
Menstrual care products shall mean tampons, panty liners, menstrual cups, sanitary napkins, and
other tangible personal property designed for hygiene in connection with the human menstrual
cycle, but does not include grooming and hygiene products.
. . .
Section 3. That Section 25-73(c) of the Code of the City of Fort Collins is hereby
amended to add a new subsection 26, to read as follows:
Sec. 25-73. Imposition of the sales tax and exemptions.
. . .
(c) Transactions and items exempt from sales tax. The following shall be exempt from the
sales tax:
. . .
(26) All sales of menstrual care products.
Section 4. That Section 25-74(b) of the Code of the City of Fort Collins is hereby
amended to add a new subsection 22, to read as follows:
Sec. 25-74. Imposition of the use tax and exemptions.
. . .
(b) Transactions and items exempt from the use tax. The use, storage, distribution or
consumption in the City of the following are hereby exempted from the use tax:
. . .
(22) Menstrual care products; and
(2223) All other tangible personal property and taxable services that are exempt, as
provided in Sections 25-73(c) and 25-73(d), from the sales tax imposed in this Article.
Section 4. The provisions in this Ordinance shall become effective sixty (60) days
after final passage.
-3-
Introduced, considered favorably on first reading, and ordered published this 5th day of
October, A.D. 2021, and to be presented for final passage on the 19th day of October, A.D. 2021.
____________________________________
Mayor
ATTEST:
_____________________________
Interim City Clerk
Passed and adopted on final reading on this 19th day of October, A.D. 2021.
____________________________________
Mayor
ATTEST:
_____________________________
Interim City Clerk