To view the medical taxes legislation ASDSA is tracking, click here.
The American Society for Dermatologic Surgery Association opposes taxes on cosmetic medical procedures, because they:
Violate patient privacy. Cosmetic medical procedure taxes invite tax auditors into the exam room. Enforcement will include tax audits of medical practices to determine whether procedures were elective and/or cosmetic. To date, enforcement of whether these procedures are deductible medical expenses has focused on individuals, and the burden of proof has been on the patients. However, cosmetic medical procedures taxes make the physician a tax collector and hold him/her liable for the taxable amount. Thus, audits would be directed at physicians who would need to prove whether or not procedures meet the definition. Presumably patient medical records, including photographs, would be involved in proving whether a procedure met the definition or not. Tax auditors are not medical professionals, and any review of patient charts, which contain personal information and sensitive photographs, is a breach of patient privacy, patient record confidentiality, and undermines the trust which is the cornerstone of the physician-patient relationship.
Cost more revenue than they generate. In 2012, New Jersey passed a law to repeal the tax on cosmetic medical procedures. In 2004, New Jersey passed a 6% tax on elective medical procedures, and after that, the NJ Department of Taxation experienced a 59% shortfall based on projected revenue estimates. In fact, according to independent studies, for every $1 NJ collected on the tax, the state lost $3.39 in total revenue. The state lost millions in corporate income tax, in additional to “surgical flight” losses. When cosmetic procedures were completed out of state, indirect state revenues – such as taxes on personal income, gas, hotel stays, food, and surgical center or hospital fees – were paid to neighboring states. As a result, NJ Assemblyman Joseph Cryan, the sponsor of the 2004 bill, led efforts to repeal the tax in his state and communicated this experience to elected officials all over the country.
Are arbitrary and difficult to administer. As evidenced with the recent experience in New Jersey, the line between “cosmetic” and “reconstructive” surgery is not always clear and leaves the decision of medical necessity up to tax auditors—a completely inappropriate proposition.
Examples of dermatologic procedures which may be taxed may include, but are not limited to:
Send patients and physicians outside the state. Just as these taxes provided New Jersey cosmetic surgery patients with a great deal of incentive to bring their business to neighboring states, it made conducting business more expensive and burdensome for physicians.
Negatively impact jobs. As the expense of obtaining procedures increases, some patients will be priced out of the market and this may force medical offices to eliminate additional staff to reduce expenses. Also, many individuals have found cosmetic medical procedures are necessary to remain competitive in the workforce.
Make physicians into tax collectors. Cosmetic medical procedures taxes require physicians to collect the tax and then hold physicians liable should an individual fail or refuse to pay the tax.
Discriminate against women. Taxes on cosmetic medical procedures discriminate against women. The American Society for Dermatologic Surgery’s 2009 Procedure Survey demonstrates that 83% of our members' minimally invasive cosmetic medical procedure patients are women.
The ASDSA opposes all taxes on physicians, in any and all forms, due to their harmful effects on health care costs and access to patient care. Taxes on medical care should not be used as a tool to fix broken finances.
To download the ASDSA tax opposition letter, click here.