Medical device tax and the iPhone: Grover Norquist’s anti-tax group jumps on new argument for repeal

MassDevice.com coverage of the medical device tax

Conservative tax-reform activist Grover Norquist is putting some of his organization’s muscle behind a mostly GOP-fueled effort to paint the medical device excise tax as a danger to smartphones and tablets.

In an op-ed for The Hill, Katie McAuliffe wrote that there is legitimate concern that smartphones, tablets and other hand-held devices could be unnecessarily taxed under the new 2.3% medical device excise tax because the FDA has not clearly stated whether or not mobile devices that run health apps could be interpreted as medical devices themselves.

"This is a legitimate question for clarifying tax authority, and a clear consequence of passing a monolithic bill without a thorough reading," McAuliffe wrote.

McAuliffe is the executive director for Digital Liberty, a sister organization of Norquist’s Americans for Tax Reform, which also shares the same address and telephone number as the conservative advocacy center,

Late last week, 6 GOP lawmakers from the House Committee on Energy and Commerce wrote a letter to FDA commissioner Margaret Hamburg to clarify the agency’s position on mobile apps and whether or not the technology would be considered medical devices subject to the new 2.3% excise tax. The agency has said in previous guidance on mobile health apps that mobile platforms such as smartphones and tablets would be considered medical devices based on whether or not the device was being marketed for medical use.

The lawmakers wrote that they were concerned about the "potential of ‘actual use’ becoming a factor in the future."

Further, they asked "Has the FDA discussed, prepared, or analyzed the effect of the medical device tax on smartphones (as well as tablets or similar devices) or the creators or distributors of applications for those products?"

In her piece for The Hill, McAuliffe wrote that the IRS decision to defer the taxation question onto the FDA was tantamount to turning the agency into a "a tax-collecting arm of the government rather than an agency focused on science and consumer welfare."

"Intellectually one would think that since the IRS says ‘The new tax also does not apply to the sale of any other devices that are of a type generally purchased by the general public at retail for individual use (the retail exemption)’ then apps would not be taxed. However, the FDA made it clear that they need to make a determination, so developers beware," she wrote.

The medical device tax has long been a target for Norquist, one of the most visible anti-tax activists in American politics. In March of last year, he framed the tax as a direct attack on senior citizens in an article for the Daily Caller.

"Who buys medical devices? Who buys pacemakers, wheelchairs and other costly medical devices? Seniors do," he wrote.

He was back at it in July, penning an op-ed for the Washington Times where he dubbed the landmark Affordable Care Act the "Obamatax," adding that "a vote for Mr. Obama is a vote for more than $5.5 trillion in higher taxes over the next 10 years."

"What medical devices?" Norquist asked. "Braces for your kids. A stent for your heart. A wheelchair. All the cool stuff you see in hospitals will now cost more in order to pay Mr. Obama’s tax on medical devices," he added.

RSS From Medical Design & Outsourcing

  • Athermal laser machining cuts bioabsorbable polymers and more
    A the recent MD&M East trade show in New York, Norman Noble, discussed the capability of athermal laser manufacturer. The company has developed the Noble S.T.E.A.L.T.H. (System To Enable Ablation Laser Technology Haz-free). The athermal laser machining process was developed to create precise features in any material, including bioabsorbable polymers, shape memory metals and other […]
  • Exciting possibilities for metallic glass in the medical device world
    Researchers are exploring the potential of metallic glass as a versatile, pliable material that is stronger than steel, with a bevy of possible medical device applications. Yale University engineers have discovered a unique method for designing metallic glass nanostructures across a wide range of chemicals, a technique that could have applications for everything from watch […]
  • Strong Precision Technologies’ medical divisions to unify under MedTorque brand
    Strong Precision Technologies announced on July 2, 2015, that its two medical divisions will now go to market under a single brand, MedTorque. The move reflects the increasing integration of the division formerly known as Inland Midwest with MedTorque, its sister division in Kenosha, WI. “We will continue providing our customers with the personalized level of service […]
  • Olympus offers next-day product replacement guarantee for medical devices
    Olympus, a medical and surgical procedures solutions company, announced that it is guaranteeing next-day replacements for surgical equipment at no additional charge. Olympus is the first surgical product manufacturer to offer this type of guarantee. The service became available to customers with an Olympus Full Service Agreement earlier this year. “Canceled procedures can be costly for healthcare facilities […]
  • More accurate prediction on prognosis in multiple myeloma from SkylineDx
    SkylineDx, a biotechnology company specializing in the development and commercialization of genetic tests, is launching its MMprofiler assay. This test enables clinicians to more accurately predict the prognosis of patients with multiple myeloma (bone marrow cancer) than traditional methods. The MMprofiler measures the activity of 92 genes which are directly or indirectly related to the […]
  • Flint Mobile swaps card reader for camera, accept mobile payments anywhere
    Flint Mobile, the swipe-free mobile payments app, has significantly expanded its payment management and loyalty capabilities for small, service-centric businesses, like the ones run by on-the-go medical equipment professionals. The toggle-free mobile technology makes the process quite simple for both parties, as all transactions are conducted through the mobile device’s camera without the need of any external […]
  • Should scientists be allowed to genetically alter human embryos?
    Scientists have at their disposal, a way to explore the possible prevention of genetic diseases before birth. But should they? Currently, the most promising path forward involves editing the genes of human embryos, a procedure threaded with controversy. An article in “Chemical & Engineering News” (C&EN), the weekly newsmagazine of the American Chemical Society (ACS), parses […]
  • Tackling chronic sinusitis by addressing underlying factors
    The stuffy noses and sinus pressure of head colds are uncomfortable, but for most people, they go away within days. For those with chronic sinusitis, however, those symptoms and others drag on for weeks. Now scientists are onto a potential new therapy that could address one of the underlying factors associated with the condition. They […]
  • Implantable “artificial pancreas” could help diabetes patients control their blood sugar
    Living with Type 1 diabetes requires constant monitoring of blood sugar levels and injecting insulin daily. Now scientists are reporting in the American Chemical Society (ACS) journal, “Industrial & Engineering Chemistry Research,” the development of an implantable “artificial pancreas” that continuously measures a person’s blood sugar or glucose level and can automatically release insulin as […]
  • Drug Deactivation program roll out to all facilities for safe disposal of unused prescription medications
    Verde Technologies announced that New Brighton-based Meridian Behavioral Health, the largest for-profit substance abuse and addiction treatment group in Minnesota, has become its most recent partner in the deactivation and safe disposal of prescription medications including methadone. Meridian is the first behavioral health group to roll out the Deterra Drug Deactivation System to all 17 […]
  • Lophius Biosciences introduces T-activated ImmunoScan Cocktail
    Lophius Biosciences announced the commercial launch of T-Track ImmunoScan and T-activated ImmunoScan Cocktail. Based on a proprietary and very specific cocktail of stimulants in combination with the Company’s T-activation technology, T-Track ImmunoScan and T-activated ImmunoScan Cocktail specifically target different cell types involved in both the adaptive and innate immune system. T-Track ImmunoScan and the T-activated […]

Leave a Reply