ASSEMBLY, No. 3125




DATED: JUNE 22, 2004


      The Assembly Budget Committee reports favorably Assembly Bill No. 3125.

      Assembly Bill No. 3125 imposes a 6% gross receipts tax on certain cosmetic medical procedures.

      The bill defines the taxable cosmetic medical procedures as any medical procedure performed on a individual which is directed at improving the procedure subject's appearance and which does not meaningfully promote the proper function of the body or prevent or treat illness or disease. That means that cosmetic medical procedure includes but is not limited to cosmetic surgery, hair transplants, cosmetic injections, cosmetic soft tissue fillers, dermabrasion and chemical peel, laser hair removal, laser skin resurfacing, laser treatment of leg veins, sclerotherapy, and cosmetic dentistry.

      However, cosmetic medical procedures do not include reconstructive surgery or dentistry. The bill defines reconstructive surgery or dentistry to include any surgery or dentistry performed on abnormal structures caused by or related to congenital defects, developmental abnormalities, trauma, infection, tumors or disease, including procedures to improve function or give a more normal appearance.

      The gross receipts tax will be paid by the subject of the cosmetic medical procedure, and will be collected from the procedure subject by the person billing the gross receipts from the cosmetic medical procedure when collecting the payment for the cosmetic medical procedure. The bill defines the gross receipts from a cosmetic medical procedure to mean all amounts paid for services, property or occupancy required for or associated with the performance of a cosmetic medical procedure and billed to the procedure subject's account. If more than one person bills gross receipts from a single cosmetic medical procedure, each person doing billing shall be responsible for the collection of the gross receipts tax on the portion of the gross receipts billed. That means, for example, that if the anesthesiologist, radiologist, testing services, and admissions service bill separately from the medical specialist directly performing the procedure, each must bill the procedure subject for the separate cosmetic medical procedure expenses it has charged.



      This bill has been estimated to increase State revenues by $26 million annually.