News Feature | September 22, 2014

Industry Lauds Passing Of Bill To Repeal Device Tax

By Nick Otto


The House of Representatives recently voted to pass a bill that would repeal the hotly debated 2.3 percent medical device excise tax.

The repeal measure passed as part of an omnibus jobs bill, the Jobs for America Act (H.R. 4), that combines multiple bills already approved by the House. The bill passed by a vote of 253 to 163.

Lawmakers and industry leaders lauded House efforts to repeal the bill, pointing to evidence that the excise tax is already costing jobs and hurting innovation in the field.

“The medical device tax continues to eliminate thousands of good-paying jobs and stifle medical innovation,” said Rep. Erik Paulsen (R-Minn.), a sponsor of the tax repeal portion of the bill, in a press release. “The tax has already meant the loss of 33,000 jobs — equivalent to wiping out the entire Minnesota medical device industry — and will continue to harm our economy. Repealing this tax is the only answer for a bad idea that only gets worse.”

Paulsen also added that other federal agencies, such as the Internal Revenue Service (IRS), are having their own difficulties in enforcing the device tax. A recent Treasury Inspector General audit found the IRS issued 217 erroneous penalties to device companies over a six month period, according to Paulsen’s statement.

The Medical Imaging & Technology Alliance (MITA), Advanced Medical Technology Association (AdvaMed), and the Medical Device Manufacturers Association (MDMA) also threw their support behind the measure. According to an AdvaMed press release, the medical technology industry represents more than 400,000 employees in the U.S. and generates $25 billion in payroll.

“Repealing this tax will help ensure the U.S. maintains its global leadership in this high-tech manufacturing sector and advance the development of new cures and treatments,” said Stephen Ubl, president and CEO of AdvaMed, in the press release. “We greatly appreciate the ongoing support from both sides of the aisle on this important issue.”

Both MITA’s and MDMA’s leaders also praised lawmakers’ bipartisan efforts of repealing the tax, with MDMA’s president Mark Leahey adding that the repeal would both “empower patients and providers” as well as spark further innovation that “our communities desperately need,” according to AdvaMed.

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