Medically related sales tax exemption bills receive nod from state panel

TRENTON – Two bills that would exclude sales taxes for certain medical services cleared the Sales and Use Tax Review Commission today.

The bills, which now go on to be considered by the Legislature, would abolish sales taxes in similar situations:

* From permanent cosmetic make-up services that are provided pursuant to a doctor’s prescription in conjunction with reconstructive breast surgery;

* And from other medically appropriate tattooing services such as restoring pigmentation.

Bill S2921, sponsored by Sen. James Beach, (D-6), Voorhees, would bring the field of cosmetic make-up into line with laws regarding other services for which a doctor has issued a prescription.

Beach’s bill addresses a loophole in the law in which health insurers cover the costs of reconstructive breast surgery but won’t cover the sales tax charged.

This bill would relieve patients of that expense.

S2953, sponsored by Sen. Diane Allen, (R-7), Edgewater Park, would exempt from the sales tax tattooing done under a doctor’s prescription that helps restore a patient’s normal appearance.

The Commission reported that according to the reviews of the bills’ estimated financial impact, S2921 would cost the state less than $1 million a year, and S2953 would cost the state about $115,000 annually in lost tax revenue.

Regarding the bill proposed by Beach, the Commission recommended that it not be made retroactive to July 1 as the language originally proposed.

The Commission recommended that if the bill becomes law, it not take effect for approximately one month so that there is time to notify businesses.

Medically related sales tax exemption bills receive nod from state panel