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The medical device tax returns after a two-year suspension

por Lauren Dubinsky, Senior Reporter | January 08, 2018
Business Affairs Medical Devices
While the rest of corporate America will be basking in a tax cut this year due to President Trump’s sweeping tax bill, the 2.3 percent medical device tax is back after a two-year suspension, and manufacturers are not pleased.

AdvaMed President and CEO Scott Whitaker issued a statement on December 21, urging Congress and the Administration to repeal the tax “once and for all.” He also wrote President Trump a letter requesting “administrative relief” for the manufactures by pardoning them from biweekly deposit requirements to the IRS.

“This is a tax on innovation, a tax on jobs, and a tax on the health and well-being of millions of American patients,” Whitaker said. “It makes no sense from either a health care or a tax policy perspective, which is why bipartisan majorities for years in both the House and Senate have called for this tax to be repealed.”

Not everyone sees it that way. The Government Accountability Office published a report in June 2015 that found medical device sales had not declined — and actually continued to rise — after the medical device tax was introduced.

Supporters of the tax argue that manufacturers have overstated the harm suffered while the tax was in effect, according to the Los Angeles Times. They claim that the expansion of health coverage under the Affordable Care Act benefited them by boosting the potential market for their products.

Despite the blow, those against the tax are not giving up — lobbyists launched ads in Texas, New York, Pennsylvania and California last week, pressuring Congress to repeal the tax, according to The Washington Times. They hope Congress will suspend or repeal the tax as part of a budget deal that is to be approved by January 19.

But if that doesn’t happen, the manufacturers will need to make their first payment on January 29.

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