5 Things You Need To Know About the Medical Device Tax
Now that the nation's electioneers have taken a break, we can do away with a whole host of adjectives. Gone is the "job-killing raid" on "life-saving" technologies, putting American jobs "in danger of being shipped to China." With the ballots cast and counted, we can ditch those rhetorical flourishes and take a look at what's left: a 2.3% excise tax on medical device sales in the U.S.
The industry is doing its trench work to convince a lame-duck Congress to repeal the charge before it takes effect on Jan. 1, but history tells us that departing lawmakers are often more than willing to lay contentious issues forward to be dealt with by their successors. If the tax survives the winter, that leaves the repeal effort in the hands of Senate Republicans and a few Democrats who have pledged their support of the effort, though the chamber's leadership has thus far refused to bring the issue to vote.
Whether the tax stays on the books through 2013 and beyond is unknowable, and we're not exactly in the political prognostication business at FierceMedicalDevices. But it appears likely to stick around in some form long enough to warrant a deeper understanding of just how it works. And that means the industry has a number of valid questions that require answers. Which devices will be taxed? Who pays the charge? How much will it cost? Do we really have to do this?
The IRS has yet to issue a final regulation on the tax, but we pored through the agency's published guidance to answer those questions and bring you a brief guide to the medical device tax. -- Damian Garde (Twitter | email)
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