The New York Department of Taxation and Finance recently clarified the tax treatment of dermal fillers and botulinum toxin in the state (N.Y. Technical Service Bureau Memorandum No. TSB-M-12(5)S (Mar. 26. 2012)). Botulinum toxin, dermal fillers and other similar cosmetic products are generally used to reverse the signs of aging. When used for this purpose, these items will generally not qualify for an exemption from sales tax. Under New York tax law, drugs and medicines will be exempt from tax if their use is intended to cure, mitigate, treat, or prevent illness or disease in humans (N.Y. Tax Law sec. 1115(a)(3)). Cosmetic or toiletry items are specifically excluded from this exemption, even though they contain medicinal ingredients, because they are generally not used for medicinal purposes.
However, while botulinum toxin and other dermal fillers are mainly marketed for cosmetic purposes, they can be used by physicians in the treatment of medical conditions, illnesses or diseases in patients. These conditions include hyperhidrosis (excessive sweating), strabismus (misalignment of the eyes), and limb spasticity following a stroke. Therefore, where botulinum toxin and other dermal fillers are used in the treatment of medical conditions, illnesses or diseases, they will qualify as an exempt drug or medicine.
Those who had previously paid tax on the purchase of botulinum toxin or other dermal fillers used for non-cosmetic purposes may request a refund from the Tax Department if the purchase was made within the last three years from the issue date of Technical Service Bureau Memorandum No. TSB-M-12(5)S.