New Jersey governor expected to veto cosmetic surgery tax repeal

All signs point to New Jersey Gov. Chris Christie axing a bill that would end the state’s 8-year-old taxation of cosmetic surgeries.

Gov Chris Christie Signs2 New Jersey governor expected to veto cosmetic surgery tax repeal

New Jersey, the only state with such a tax, brings in more than $10 million each year, according to a report by the New Jersey Office of Legislative Services. Elective cosmetic procedures like liposuction, breast enhancement and Botox treatments, are currently taxed at a 6 percent clip.

Repeal supporters claim the tax has elevated costs for physicians who must collect and account for the taxes, while state money is spent on enforcing it. The legislative bill was sent to Christie late Monday evening.

Christie, however, is expected to veto the bill, experts said, based on his previous history. Last year, he vetoed a much smaller item, cutting $7.6 million out of the state budget earmarked for women’s clinics. Christie said the reduction was in response to the state’s economic woes.

Considering the current economy, few expect Christie to reverse course on elective surgical taxation. If he decides to sign the bill into law, the New Jersey tax will decrease to 4 percent in the next quarter, then to 2 percent in the next fiscal year. After July 1, 2013, the entire tax would no longer exist.

Other states lawmakers have shown interest in a similar tax plan, including those from Arkansas, Illinois, New York, Tennessee, and Washington. The original projections for the tax were approximately $23 million a year. In its first year, the tax brought in approximately $6.8 million, although those funds were not officially collected by the state until well into the second year.

According to New Jersey Assemblyman Joseph Cryan (D), who helped bring the tax into existence, the bill served as a “creative” way to find additional revenue streams. He and other supporters thought they were targeting the wealthy citizens of the state.

It turned out, as Cryan has lamented numerous times, the demographic most affected are middle-class working women. Additional bureaucratic red tape and patients fleeing to physicians in other states further doomed the original potential of the tax.

“Creatively taxing the public to raise revenue for other health care expenses does not work,” said Cryan.