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States consider 'vanity' taxation: N. Jersey first to pass law; Indiana unlikely to follow

December 12, 2005

Tummy tucks are costing a few more bucks in New Jersey, but don't look for a tax on cosmetic surgery procedures in Indiana anytime soon.

The Garden State passed the first cosmetic surgery tax law in 2004. Since then, legislators in Arkansas, Illinois, New York, Tennessee, Texas and Washington have introduced similar proposals, although none of the states has passed the taxes into law.

Cosmetic surgery is perceived by some lawmakers to be an easy target for additional tax revenue because it's often an elective procedure. New Jersey legislators dubbed their law a "vanity tax."

Here in Indiana, a tax seems unlikely, said Rep. Jeff Espich, R-Uniondale, who chairs the House Ways & Means Committee.

"That gets into taxing services, which we have tended to avoid in Indiana," he said. "I can't imagine that it's going to be entertained anytime soon."

In New Jersey, the 6-percent levy will help fund hospital care for the uninsured and poor. Illinois' proposed 6-percent tax would have been used to fund stem cell research.

Glamorized in reality television shows, plastic surgeries are no longer attracting just the wealthy. A survey conducted in December 2004 by the American Society of Plastic Surgeons found that roughly 60 percent of 700 people planning to have cosmetic surgery in the next two years reported an annual household income of $30,000 to $90,000.

That may help explain why doctors last year performed 9.2 million cosmetic surgery procedures, a 24-percent increase from 2000, according to the ASPS in Arlington Heights, Ill. Moreover, patients last year alone spent $8.4 billion to better their bodies.

Dr. Bruce Van Natta, who practices at the Perkins Van Natta Center for Cosmetic Surgery and Medical Skincare on the north side of Indianapolis, said many of his patients aren't seeking to uphold Hollywood lifestyles. They just want to feel better about themselves.

For example, he said, female patients whose stomach muscles are stretched by pregnancies often opt for a tummy tuck after workouts at the gym fail to make a difference.

"Because this is looked at as a luxury item, it's an easy target," Van Natta said. "People assume anyone who has money to spend frivolously on cosmetic surgery can afford the tax. I can assure you, a significant portion of the people I see have a real struggle coming up with the money."

Plastic surgeons further argue the tax is unfair to women, who account for 87 percent of cosmetic procedures, according to the ASPS.

And, because the line between cosmetic and reconstructive surgery often is unclear, they say critical decisions about medicine would be put in the hands of legislators and state tax auditors rather than medical professionals.

New Jersey's law and the other state proposals exempt medically necessary procedures or reconstructive work after disfiguring diseases, accidents or birth defects.

Patients last year forked over more than $1 billion to have their noses reshaped. The average national price tag for the procedure is $3,332, according to the ASPS. Using that figure, the procedure in New Jersey now costs an extra $199.

So far, though, the tax hasn't generated as much revenue as the state had hoped. Officials think it will raise only $7 million this year, significantly less than the $24 million originally projected.

The dismal showing prompted Joseph Cryan, the legislator who introduced the measure, to publicly renounce the tax as a mistake. He plans to present a bill to repeal the law when the Legislature reconvenes in January, a spokesman for the Democrat said.

Myriad problems collecting the tax from surgeons aided the legislator's decision to reconsider his position. Under the law, doctors are responsible for collecting, paying and tracking the payments.

The process has created headaches for Dr. Richard D'Amico and his fellow practitioners. D'Amico, who is vice president of the ASPS and a past president of the New Jersey Society of Plastic Surgeons, welcomes a reversal.

"It's an accounting nightmare for us," he said. "The doctor has become a tax collector. That's a very unpleasant place to be."

The tax might be deterring some patients from seeking procedures in New Jersey, which may have contributed to the shortfall. D'Amico is sure he has lost customers to surgeons in New York, some of whom he said are advertising their offerings as a no-tax alternative.
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