The cosmetic medical procedures gross receipts tax is 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.
The bill — A-3646 (S1988) — would reduce the 6 percent tax rate currently imposed on the gross receipts from cosmetic medical procedures to a 4 percent rate with the first calendar quarter beginning after the date of enactment; to 2 percent from July 1, 2012, until July 1, 2013, and to 0 percent on and after July 1, 2013, effectively ending the imposition of the tax.
According to a copy of the bill, the phase-out provided by the bill would gradually alleviate the financial and administrative burdens associated with the tax. Since the gross receipts tax was imposed in 2004, the tax has increased overall costs for recipients of cosmetic medical procedures, and imposed an administrative burden on the medical offices billing the procedures.
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.
“We fully support this legislation,” says Jeffrey Shanton, chair, advocacy and legislative affairs committee, for the New Jersey Association of Ambulatory Surgery Centers. “Cosmetic procedures are performed in many ambulatory surgery centers in the state. Anytime you can roll-back a contentious tax like this, it is a good thing. Unlike
some other taxes/assessments imposed upon healthcare providers, this tax was for no specific purpose — the funds generated were classified as unanticipated revenue and put into the Healthcare Subsidy Fund.”
The bill was originally introduced in the Senate in May 2010 and in the Assembly in Jan. 2011. It passed out of the Senate in Sept. 2011 and was moved out of the Assembly Appropriations Committee on Dec 1, 2011.
It now awaits a decision for it to be included for an Assembly vote on Jan. 9, 2012.
Learn more about NJAASC.
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