Johnson Bill to Eliminate Cosmetic Surgery Tax Advanced by Assembly Panel

(Trenton) - Legislation sponsored by Assemblyman Gordon Johnson to phase out a cosmetic medical procedures tax that has proven burdensome and ineffective was released Thursday by an Assembly panel.

The bill (A-3646) phases out the tax implemented in 2004.

"This tax has proven ineffective and an economic hardship to New Jersey residents and businesses," said Johnson (D-Bergen).  "This phase-out will gradually alleviate the financial and administrative burdens associated with the tax.  Since it was imposed, the tax has increased overall costs for recipients of cosmetic medical procedures, and imposed an administrative burden on the medical offices billing the procedures and the state agencies charged with the administration and enforcement of the tax.  It's time to get rid of it."

Under the bill, the 6 percent rate of tax currently imposed on the gross receipts from cosmetic medical procedures is reduced by two percent per year over a three-year period:

• On or after July 1, 2011 but before July 1, 2012 the rate of tax imposed will be 4 percent;
• On or after July 1, 2012 but before July 1, 2013 the rate of tax will be percent; and
• On or after July 1, 2013 the rate of tax will be eliminated.

The cosmetic medical procedures gross receipts tax is a state tax imposed on the purchase of cosmetic medical procedures.  The tax applies to amounts paid for services and for any property or occupancy required for, or associated with, the performance of a cosmetic medical procedure, and is paid by the subject of the procedure and collected by persons responsible for billing the services.

Examples of taxable procedures include cosmetic surgery, hair transplants, cosmetic injections, cosmetic soft tissue fillers, dermabrasion and chemical peel, laser hair removal, laser skin resurfacing, laser treatment of leg veins, sclerotherapy and cosmetic dentistry.

"As we're looking to create jobs and economic development, an ineffective tax like this that very likely is chasing jobs and medical work to other states quite simply needs to go," Johnson said.

The bill was released 12-0 by the Assembly Appropriations Committee.