Senate Bill: Tax on Cosmetic Prodedures, Docs May Be Responsible for Payment

The Senate yesterday unveiled its version of a complicated and sweeping overhaul of the health care system in the U.S.  The bill is a mammouth 2,074 pages and will likely be in debate for at least the remainder of this year.

We’ll have time to further dissect the bill in the coming days.  Meantime, upon quick review, some physicians — particularly cosmetic surgeons — might be interested to start reading from the back.  On page 2,045, the Senate outlines its plans to charge a 5% tax on certain elective cosmetic procedures.  The tax would be paid by the patient to the physician performing the procedure.  If the patient does not pay the tax, the physician is responsible the tax.

Here’s the provision:

Page 2045

SEC. 9017. EXCISE TAX ON ELECTIVE COSMETIC MEDICAL PROCEDURES.

(a) IN GENERAL.-Subtitle D of the Internal Revenue Code of 1986, as amended by this Act, is amended by adding at the end the following new chapter:

”CHAPTER 49-ELECTIVE COSMETIC MEDICAL PROCEDURES ”Sec. 5000B. Imposition of tax on elective cosmetic medical procedures.

”SEC. 5000B. IMPOSITION OF TAX ON ELECTIVE COSMETIC MEDICAL PROCEDURES.
”(a) IN GENERAL.-There is hereby imposed on any cosmetic surgery and medical procedure a tax equal to 5 percent of the amount paid for such procedure (determined without regard to this section), whether paid by insurance or otherwise.
”(b) COSMETIC SURGERY AND MEDICAL PROCEDURE.-For purposes of this section, the term ‘cosmetic surgery and medical procedure’ means any cosmetic surgery (as defined in section 213(d)(9)(B)) or other similar procedure which-
”(1) is performed by a licensed medical professional, and
”(2) is not necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease.
”(c) PAYMENT OF TAX.-
”(1) IN GENERAL.-The tax imposed by this section shall be paid by the individual on whom the procedure is performed.
”(2) COLLECTION.-Every person receiving a payment for procedures on which a tax is imposed under subsection (a) shall collect the amount of the
tax from the individual on whom the procedure is performed and remit such tax quarterly to the Secretary at such time and in such manner as provided
by the Secretary.
”(3) SECONDARY LIABILITY.-Where any tax imposed by subsection (a) is not paid at the time payments for cosmetic surgery and medical procedures are made, then to the extent that such tax is not collected, such tax shall be paid by the person who performs the procedure.”.

(b) CLERICAL AMENDMENT.-The table of chapters for subtitle D of the Internal Revenue Code of 1986, as amended by this Act, is amended by inserting after the item relating to chapter 48 the following new item:
”CHAPTER 49-ELECTIVE COSMETIC MEDICAL PROCEDURES”.

(c) EFFECTIVE DATE.-The amendments made by this section shall apply to procedures performed on or after January 1, 2010.

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