ROLLBACK OF THE NEW JERSEY COSMETIC TAX
Problem: AMG was approached in the back halls of the Statehouse, hearing from legislators and reporters that a tax on cosmetic medical procedures was being proposed as part of the budget deal. The 6% tax on the patients receiving the procedure would be the first in the nation.
Solution: June, 2004: AMG immediately rallied support, establishing a statewide coalition of pharmaceutical and health care leaders (various impacted specialties and dentists), and rolled out an extensive action plan to repeal the tax. Patient grassroots was engaged, and studies showing that for every dollar the tax brought in, four times was lost to out of state business. Legislators were fully educated on the ramifications, and support garnered. The original sponsor of the tax bill was turned into the sponsor of the repeal bill!
Numerous white papers were drafted and correspondence sent to every stakeholder.
The first legislative initiative generated 70 sponsors to the bill, and passed both houses unanimously, but was vetoed by then Gov. Corzine in January, 2007.
Following Gov. Christie’s inauguration, AMG sprung into action again, this time working a “rollback” tax bill – which would rollback the tax 2% each year over the course of three years. Again, sponsors were solicited, and physicians/ stakeholders were engaged. Former Division of Taxation officials were engaged to weigh in on the inconsistencies of the tax, the unrealized revenue, and the issues surrounding HIPAA compliance of tax audits.
On the final day of the 2010-2011 legislative session, the rollback legislation was passed, and signed by Gov. Christie on January 17, 2012.
In an environment fraught with new taxes and seemingly impossible-to-achieve tax repeals, AMG championed the dissolution of an onerous, discriminatory tax for its physician and pharmaceutical clients. Additionally, AMG’s expertise has been utilized around the country with other states battling similar “luxury” taxes.