The Senate today approved by a vote of 39-0 S1988, which phases out the cosmetic medical procedure gross receipts tax over three steps.
Under the bill, as amended, the six percent rate of tax currently imposed on the gross receipts from cosmetic medical procedures is reduced to a 4% rate starting with the first calendar quarter beginning after the date of enactment; reduced to a 2% rate from July 1, 2012 until July 1, 2013, and starting July 1, 2013 the rate of tax will be 0%, effectively ending the tax.
Senators made political points in the lead-up to the vote, with Republicans emphasizing what they felt was the long-overdue nature of such legislation, arguing such a tax increase should never have been implemented in the first place.
“We did discourage business in New Jersey because of this tax,’’ said Sen. Kevin O’Toole, driving business out of state. He wanted to repeal it in one shot instead of phasing it out.
Sen. Paul Sarlo said they are opting for the phasing out because it does represent a loss of millions of dollars.
He said “We wasted a year,’’ and wished that similar bills had not drawn vetoes from the governor earlier. “Let’s pass the bill.’’
The Office of Legislative Services reported that there will be an estimated revenue loss of $1.8 million during fiscal year 2012, and an accumulated revenue loss of $7.2 million during fiscal year 2013, with the elimination of the tax resulting in lost revenue of $10.8 million.