The medical technology industry has asked Congress to repeal a 2.3% excise tax on the sale of certain medical devices that is scheduled to take effect January 1, 2013. The tax, authorized by the 2010 Health Care and Education Reconciliation Act (P.L. 111-152), is estimated to cost the industry $20 billion over the next 10 years.
The 2.3% Medical device excise tax applies to sales after December 31, 2012. The excise tax could have an adverse impact on R&D investment and job creation. The tax comes at a time when the US capacity for medical technology innovation is declining ands start-up companies find it difficult to raise capital to bring new technologies to market.
This update provides details about the excise tax and suggests medical device manufacturers and importers should monitor the progress of the repeal initiative and watch for IRS guidance on the tax.