Opponents Intensify Effort to Kill Medical Device Tax
With the clock ticking before a medical device tax goes into effect, opponents are stepping up the pressure to delay its implementation, if not repeal it entirely.
Sixteen Democratic senators have joined the Republican-led effort to derail the tax, which is part of the Affordable Care Act, President Obama’s 2010 healthcare reform law. The 2.3% tax, scheduled to start Jan. 1, will be imposed on manufacturers’ gross sales of certain medical devices.
Congressional allies of the medical device industry are trying to tie either a delay or repeal of the tax to the ongoing negotiations over the “fiscal cliff” deadline of other taxes scheduled to kick in by year’s end.
“With this year quickly drawing to a close, the medical device industry has received little guidance about how to comply with the tax—causing significant uncertainty and confusion for businesses,” said the 16 Democratic senators in a letter to Senate Majority Leader Harry Reid, D-NV. “As we work together to develop a long-term solution to help move our economy forward, reduce our debt and reform our tax code, we urge you to support delaying enactment of this provision in a fiscally responsible manner.”
Opponents of the device tax say it will, if implemented, result in the loss of thousands of jobs and put U.S. manufacturers at a competitive disadvantage.
“There is strong bipartisan support for action,” said Stephen J. Ubl, the president and CEO of the Advanced Medical Technology Association. “While Washington talks about a fiscal cliff, this tax could push us off an innovation cliff, costing as many as 43,000 jobs and hurting the ability of medical technology companies to find tomorrow’s treatments and cures. It should be repealed.”
The Internal Revenue Service, meanwhile, is moving forward with plans for the tax, releasing the final rule. The agency also has posted a list of frequently asked questions related to the tax. To see those questions and answers, click here
Posted: December 11, 2012