New York – Taxability of Botulinum Toxin and Dermal Fillers

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SALT Report 1452 – The New York Department of Taxation and Finance has issued a sales and use tax memorandum regarding the taxability of botulinum toxin, dermal fillers and other similar products. The Department determined that these products are primarily cosmetic in nature and generally do not qualify for an exemption from sales tax under Tax Law §1115(a)(3) which exempts drugs and medicines, but excludes cosmetics and toiletry articles, even if these products contain medicinal ingredients.

The Department determined that botulinum toxin (Botox) and dermal fillers are cosmetic products, as they are not used to cure, mitigate, treat or prevent illnesses or diseases in human beings.  Furthermore, under Tax Law §1115(a)(3), these products do not qualify as medical devices, equipment or prosthetic aids even when purchased for use in a medical or other such facility. Therefore, these products are subject to sales tax, without regard to who purchases them or where they will be used.

Section 1115(a)(4) of the Tax Law provides an exemption for prosthetic aids, artificial devices and component parts purchased to correct or alleviate physical incapacity in humans.  However, Section 528.5 specifically excludes items that are “generally useful in the absence of illness, injury or physical incapacity” from the exemption.

While these products are predominately used for cosmetic purposes, they are on occasion used by physicians to treat certain medical conditions, illnesses or diseases in patients.  The Department has provided guidance for those occasions when botulinum toxin and dermal fillers may be non-taxable.

Botulinum Toxins

Botulinum toxin compounds are used to temporarily paralyze a targeted muscle group and under certain FDA-approved guidelines, these products can be injected into a patient to temporarily minimize or reverse medical conditions such as:

  • Oromandibular dystonia: spasms of the face, jaw, neck, tongue, larynx and respiratory system
  • Hyperhidrosis: excessive sweating
  • Blepharospasm: involuntary closure of the eyelids
  • Strabismus: misalignment of the eyes
  • Hemifacial spasm: sudden contraction of the muscles on one side of the face
  • Spasmodic torticollis or cervical dystonia: muscle spasm in the neck
  • Urinary retention: an inability to urinate that requires catheterization
  • Spasmodic dysphonia: spasm of the vocal cords that causes a disruption of speech
  • Stuttering
  • Voice tremor, and
  • Limb spasticity following a stroke
Therefore, when used to treat the above medical conditions, illnesses or diseases in patients, the Department’s policy is that botulinum toxin compounds will be treated as drugs or medicines under Tax Law §1115(a)(3).  Therefore, under the above medical circumstances, the Department will allow a refund or credit of any sales tax paid on the original purchase price. Refunds or credits of sales tax paid will be provided to the original purchaser, typically a physician or medical professional.  To request a refund you must file Form AU-11, Application for Credit or Refund of Sales or Use Tax, within three years of the date the tax was payable to the Commissioner of Taxation and Finance.
Dermal Fillers
Dermal fillers such as collagen, gels, poly L lactic acid fillers and hyaluronic acid fillers fill in hollow or depressed areas in a person’s tissue that may be the result of an underlying medical condition. These conditions include, but are not limited to:
  • Facial lipoatrophy – a common occurrence in people suffering from HIV, and
  • Facial reconstructions
When used to treat specific medical conditions, illnesses or diseases in patients, rather than for cosmetic purposes, it is the Department’s policy that dermal fillers will be treated as medical supplies under Tax Law §1115(a)(3).  However, if purchased as a medical supply, these products remain subject to sales tax if purchased for use in medical or similar facilities for compensation.
Radiesse and Restylane
Further, it is the Department’s position, as stated in their memorandum, that dermal fillers, such as Radiesse and Restylane, are considered medical supply items. Since it is now the department’s policy that dermal fillers are primarily used for cosmetic reasons a previous advisory opinion, TSB-A-09(47)S, has been revoked and can no longer be relied upon.
Additionally, the decisions in this memorandum reflect the department’s current tax policies regarding Botulinum Toxin and Dermal Fillers, and any previous tax advice issued by the department regarding these items is superseded.
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