Bipartisan support, in today’s world of politics, might seem a little hard to believe. However, the U.S. Senate passed an amendment that repeals the medical device tax last month (Thursday, March 21, 2013). The bill was passed by a bipartisan vote of 79 to 20. 1 This impressive bipartisan support may suggest increasing support for industry.

This past February, two U.S. Senators, U.S. Senators Orrin Hatch (R-Utah) and Amy Klobuchar (D-Minn.), introduced a bill that would repeal the medical device tax from the Patient Protection and Affordable Care Act (PPACA), as a part of the Fiscal Year 2014 Budget Resolution. 1-4

The Hatch-Klobuchar amendment would repeal the 2.3 percent tax (estimated to be around $30 billion (yes, billion with a B) tax on medical device manufacturers, which are subject to the PPACA.1-5 This repeal aims to help promote innovation, encourage economic growth, and preserve jobs. The amendment hopes to help keep the U.S. as one of the largest medical device exporters, as well as preserve innovative industry jobs in the U.S.

It is important to distinguish this amendment would not actually repeal the tax.6 Right now it is more symbolic and represents the Senate's support for the repeal, if revenue can be generated elsewhere. Although this may be disappointing to some, there is no cause for despair, because Sen. Hatch and Sen. Klobuchar introduced the Medical Device Access and Innovation Protection Act earlier in 2013. This amendment, if passed, will fully repeal the medical device tax.7

Please, leave your thoughts and comments!

-RSpelich ^_^

 

References

1.) US Senate Committee on Finance. Newsroom. Hatch, Klobuchar Hail Senate Passage of Amendment Repealing Medical Device Tax. Available at: http://www.finance.senate.gov/newsroom/ranking/release/?id=b24a14c6-7360-4d97-8fe8-298f64e53c23. Accessed 22 March 2013.

 

2.) IRS. Affordable Care Act Tax Provisions. Available at: http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions. Accessed 22 March 2013.

3.) IRS. Medical Device Excise Tax: Frequently Asked Questions. Last Updated 20 Feb. 2013. Available at: http://www.irs.gov/uac/Medical-Device-Excise-Tax:-Frequently-Asked-Questions. Accessed 1 April 2013.

 

4.) IRS. Interim Guidance and Request for Comments; Medical Device Excise Tax; Manufacturers Excise Taxes; Constructive Sale Price; Deposit Penalties. Last Updated 29 Jan. 2013. Available at: http://www.irs.gov/pub/irs-drop/n-12-77.pdf. Accessed 22 March 2013.

5.) IRS. Medical Device Excise Tax. Available at: http://www.irs.gov/uac/Newsroom/Medical-Device-Excise-Tax. Accessed 1 April 2013.

 

6.) U.S. Senator Orrin Hatch. Press Releases. Hatch, Klobuchar Hail Senate Passage of Amendment Repealing Medical Device Tax. Available at: http://www.hatch.senate.gov/public/index.cfm/2013/3/hatch-klobuchar-hail-senate-passage-of-amendment-repealing-medical-device-tax. Accessed 1 April 2013.

7.) GovTrack. Medical Device Access and Innovation Protection Act (S.232). Available at: http://www.govtrack.us/congress/bills/113/s232. Accessed 1 April 2013.

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