SALT Report 1344 – New Jersey Governor Chris Christie recently signed legislation that will phase out the state’s 6% cosmetic medical procedure gross receipts tax. This tax is imposed on any procedure “directed at improving a patient’s appearance” and specifically names procedures like cosmetic surgery, chemical peels, hair transplants and cosmetic injections. The phase-out will start by reducing the tax rate to 4% on July 1, 2012, then to 2% on July 1, 2013, and finally, total elimination of the tax on July 1, 2014.
New Jersey is one of a few states that tax cosmetic procedures. The New Jersey Society of Plastic Surgeons commissioned a study and found that, due to the tax, New Jersey was losing revenue because patients were traveling to nearby states in order to save the 6%. Sponsors of the bill expect that by eliminating the tax and lowering the overall costs of the cosmetic procedures patients will likely stay in the state to have them performed. Additionally, the sponsors hope to lessen the burden imposed on medical offices charged with collecting and remitting the tax.
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