New Jersey repeals cosmetic tax
New Jersey Gov. Chris Christie (pictured at right) signed legislation on Jan. 17 calling for the elimination of the state's 6 percent tax on cosmetic surgery procedures, which was enacted in 2004. Assembly Bill 3646/Senate Bill 1988 requires the tax to be reduced to 4 percent on July 1; to 2 percent on July 1, 2013; and rescinded completely on July 1, 2014.
"This is great news - we're all thrilled," says New Jersey Society of Plastic Surgeons (NJSPS) President Chris Godek, MD. "All ASPS members should be ecstatic to learn this tax has been rescinded – not just NJSPS members, but all ABPS-certified plastic surgeons in our country."
Dr. Godek says ASPS, as well as Bev Lynch and A.J. Sabath of the Advocacy Management Group, were instrumental in reversing the onerous tax.
"The NJSPS should be congratulated for its tenacity in fighting to repeal the New Jersey cosmetic tax," says ASPS President Malcolm Roth, MD. "In addition, this repeal has been a top priority for the national Stop Medical Taxes Coalition, which includes several national medical specialty groups and industry partners - they've committed significant time and resources to fight alongside us on this issue over the past several years. In particular, we want to acknowledge our industry partners for their support and leadership in seeking the repeal."
"This tax does not have a good record for generating revenue," says Allergan CEO David Pyott. "In New Jersey, actual revenues have never matched projections. This tax fosters 'surgical flight,' where patients go to neighboring states for procedures - with surgeons often following their patient base. According to medical society estimations, in New Jersey surgical flight to neighboring states is nearly four times greater than before the tax was in place. In fact, according to independent reports, for every $1 collected from the cosmetic procedures tax, nearly $3 was lost in net state tax revenue from 2005 to 2008. Today's signed legislation is an important step in making sure we don't lose sight of protecting patients while looking for incremental tax revenue."
The New Jersey Assembly in 2006 had passed similar legislation to rescind the tax, but then-Gov. Jon Corzine vetoed the measure.
"We're happy to finally have erased a tax that was unfair on several different levels – including bias against women – and which caused major unforeseen problems, such as the flight of residents across state borders for procedures," adds Dr. Godek.
"We're pleased with New Jersey's decision to rescind its state tax on cosmetic procedures," says David Wilson, president of Mentor Worldwide LLC. "At Mentor, we are committed to innovation, quality and helping our patients transform how they wish to look and how they feel. Taxing procedures that might improve appearance but not 'meaningfully promote' the functions of the body or treat illness was a very narrow view of the benefits our products and our customers can deliver."
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