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Mon January 16, 2012

Botox Tax Goes Under The Knife In New Jersey

Originally published on Mon January 16, 2012 8:09 pm

If you watch much TV, you probably know that the Real Housewives of New Jersey are no strangers to the surgeon's knife. And if the state's plastic surgeons get their way, those housewives may be able to save a few dollars on their next procedure.

New Jersey's legislature has voted to phase out the so-called "Botax" — a 6 percent tax on cosmetic surgery and elective procedures like Botox — and the bill is currently on Gov. Chris Christie's desk for approval.

Dr. Christopher Godek of the Personal Enhancement Center in Toms River, N.J., is one plastic surgeon who has been working hard to eliminate the tax.

Because New Jersey is one of the only states in the Northeast with the tax, Godek says patients go into other states without the tax to have their procedures performed to save that 6 percent.

Godek is also president of the New Jersey Society of Plastic Surgeons, which commissioned an economic study that suggests New Jersey is actually losing revenues because of the tax, not gaining them.

"When someone has plastic surgery, they're not only coming to a plastic surgeon," Godek says, "they're utilizing a hospital or a surgery center; they're staying in local hotels; their family is eating in local restaurants; they're utilizing pharmacies to fill their prescriptions. So all of that revenue is lost."

But that's not how the tax was supposed to work. Back in 2005, New Jersey Assemblyman Joseph Cryan explained the rationale for the tax on CBS's The Early Show.

"This is an income situation where people are able to afford elective surgery, they're not medical necessities," Cryan said. "Clearly, reconstructive surgery would not be part of it. So it's optional surgery designed to enhance one's appearance, as opposed to the necessity or quality of one's life."

Cosmetic surgery was a big quality of life improvement for Jenni Farley, better known as JWoww of MTV's Jersey Shore, who got breast implants when she was 20. In an interview with Access Hollywood, Farley declared, "I would do it every year if I had to. I would regret not doing them. I recommend them for anybody."

Despite that endorsement, New Jersey's tax on cosmetic surgery is only bringing in about $10 million a year, less than half of what was projected. Those revenues, however modest, go into a special fund that reimburses hospitals for charity care — a fund in which state contributions are matched with federal dollars. Suzanne Ianni of the Hospital Alliance of New Jersey is worried about losing those contributions.

"This is actually bringing in dollars to New Jersey that otherwise we wouldn't be able to get," Ianni says. "Reversing these assessments that draw down federal monies, I feel, is going in the wrong direction."

Former Democratic Gov. Jon Corzine felt the same way. In 2007, he vetoed a similar bill that would have snipped New Jersey's tax on cosmetic surgery. But on Jan. 9, lawmakers voted to completely phase the tax out over the next few years. Current Republican Gov. Chris Christie has until Tuesday to decide if he'll do the same.

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Transcript

ROBERT SIEGEL, HOST:

A tax on tummy tucks and facelifts is itself under the knife in New Jersey. Lawmakers there have voted to phase out the so-called Botax, a 6 percent tax on cosmetic surgery and elective procedures like Botox.

As NPR's Joel Rose reports, New Jersey is one of just a few states with such a tax, a distinction that plastic surgeons have been working hard to erase.

JOEL ROSE, BYLINE: If you watch much TV, you probably know that the "Real Housewives of New Jersey" are no strangers to the surgeon's knife.

(SOUNDBITE OF TV SERIES, "REAL HOUSEWIVES OF NEW JERSEY")

UNIDENTIFIED WOMAN #1: I'm sure she's had a nose job. She's gotten Botox galore.

UNIDENTIFIED WOMAN #2: I'm trying to think of something that is real. Her hair is not. Her lips are not. Her nose is not. I'm not sure about her nose, maybe her nose is real.

ROSE: Those housewives may be able to save a few dollars next season, if plastic surgeons in New Jersey get their way. They're urging state lawmakers to phase out a 6 percent tax on cosmetic surgery and similar elective procedures.

DR. CHRISTOPHER GODEK: Patients go into other states without the tax to have their procedures performed to save that 6 percent.

ROSE: Dr. Christopher Godek runs the Personal Enhancement Center in Toms River, near the Jersey Shore. He's also president of the New Jersey Society of Plastic Surgeons. The organization commissioned an economic study which suggests that New Jersey is actually losing revenues because of the tax on cosmetic surgery, not gaining them.

GODEK: When someone has plastic surgery, they're not only coming to a plastic surgeon, they're utilizing a hospital or a surgery center. They're staying in local hotels, their family is eating in local restaurants. They're utilizing pharmacies to fill their prescriptions, so all of that revenue is lost.

ROSE: This is not how New Jersey's tax on cosmetic surgery was supposed to work. Here's State Assemblyman Joseph Cryan explaining the rationale on CBS' "The Early Show" back in 2005.

ASSEMBLYMAN JOSEPH CRYAN: This is an income situation where people are able to afford elective surgery. They're not medical necessities. Clearly, reconstructive surgery would not be part of it. So, it's optional surgery designed to enhance someone's appearance, as opposed to the necessity or quality of one's life.

ROSE: Cosmetic surgery was a big quality of life improvement for Jennifer Farley, better known as JWoww on the show "Jersey Shore." She sounded like an advertisement for breast implants in this interview with "Access Hollywood."

(SOUNDBITE OF SHOW, "ACCESS HOLLYWOOD")

UNIDENTIFIED MAN: When did you get them? When did they come you're your life?

JENNI FARLEY: Twenty, I was 20. It's my 21st birthday present.

UNIDENTIFIED MAN: You bought them for yourself?

FARLEY: Yeah.

UNIDENTIFIED WOMAN #3: Any regrets?

FARLEY: No, I would do it every year if I had to. I would regret not doing them. I recommend them for anybody...

ROSE: Even with that endorsement, New Jersey's tax on cosmetic surgery is only bringing in about $10 million a year, less than half of what was projected. Lawmakers voted last week to phase it out completely over the next few years. But those revenues, however modest, go into a special fund that reimburses hospitals for charity care, where they're matched by federal dollars.

And that what makes Suzanne Ianni, at the Hospital Alliance of New Jersey, concerned.

SUZANNE IANNI: This is actually bringing in dollars to New Jersey that otherwise we won't be able to get. You know, reversing these assessments that draw down federal monies, I feel, is going in the wrong direction.

ROSE: So did former Governor Jon Corzine, a Democrat. In 2007, he vetoed a similar bill that would have snipped New Jersey's tax on cosmetic surgery. The current governor, Republican Chris Christie, has until tomorrow to decide if he'll do the same.

Joel Rose, NPR News.

(SOUNDBITE OF MUSIC)

SIEGEL: You're listening to ALL THINGS CONSIDERED from NPR News. Transcript provided by NPR, Copyright NPR.