In an unexpected decision, New Jersey Governor Chris Christie signed in legislation repealing the state’s tax on cosmetic surgery. The decision ends New Jersey’s distinction as the country’s only state to tax Botox, breast implants, and other elective cosmetic procedures.
The 6 percent tax was implemented in 2004 and brings in approximately $10 million annually. The tax is slated to end in July 2013, gradually decreasing each year. Starting next quarter, plastic surgeons will be taxed 4 percent, then 2 percent the next fiscal year.
“Since the gross receipts tax was imposed 1 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 and the State agencies charged with the administration and enforcement of the tax,” the bill states.
The decision was unexpected because Christie was responsible for cutting $7.5 million earmarked for women’s family planning centers. Many expected him to uphold the cosmetic surgery tax. When created, the tax was expected to bring in $23 million annually. Those projects proved to be far-fetched, as the taxation only brought in $6.8 million.
Other states have shown interest in creating a similar tax, including Arkansas, Illinois, New York and Tennessee. On the national level, Nevada Senator Harry Reid proposed a tax on elective surgeries at a 5.5 percent clip. The proposal, nicknamed “BoTax,” met great opposition from the American Medical Association, cosmetic surgery lobbyists, and many of Reid’s fellow Democrats.
Eventually, the tax was limited to indoor tanning services and signed into law in the 2009 healthcare bill. The tanning bed tax is expected to bring in approximately $2.7 billion in the next decade.