NCPA - National Center for Policy Analysis

BOTAXES

June 6, 2005

A number of states are considering taxing certain cosmetic surgery procedures, including face-lifts, tummy-tucks and Botox injections. The idea behind the taxes -- dubbed "vanity taxes" or "Botaxes" by some -- is to boost state coffers and raise revenue for government initiatives such as health care for poor children. The proposals have stoked the ire of plastic surgeons and their patients, who have been lobbying hard to keep their procedures tax-free.

New Jersey passed the first cosmetic surgery tax law last summer. Since then, lawmakers in states including Texas, Illinois, Washington, Arkansas, Tennessee and New York have introduced bills or budget proposals to install similar taxes, although none of those states has passed the taxes into law.

  • New Jersey's law levies a 6 percent tax on a litany of procedures including hair transplants, chemical peels and liposuction.
  • So a tummy tuck, which has an average national price tag of $4,505, now costs an extra $270; a $376 Botox injection now costs nearly $23 more.
  • The tax proposals that have been introduced in other states vary, but they typically impose a sales tax ranging from 6 to 7.5 percent on the cost of the procedure.
  • New Jersey's law and all of the other state proposals exempt medically necessary procedures or reconstructive work after disfiguring diseases, accidents or birth defects.

The New Jersey law already is spurring a backlash. No one knows for sure how many New Jersey patients are declining surgery or are going out of state for treatment since the law was passed. The tax hasn't generated as much revenue as New Jersey originally hoped. When the tax was signed into law last June it was expected to generate $24 million this fiscal year. The state now thinks the tax will only generate $7 million this year.

Source: Rachel Emma Silverman, "The Nose-Job Tax," Wall Street Journal, June 1, 2005; based upon: "9.2 Million Cosmetic Plastic Surgery Procedures in 2004 -- Up 5% Growth Paces U.S. Economy Despite Reality TV Fad," American Society of Plastic Surgeons, March 16, 2005.

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