Industry groups commit to war against medical device tax as 1st due date arrives

January 29, 2013 by MassDevice staff

The 1st payments on the 2.3% medical device tax are due today, but medtech lobbying groups aren't fading in their drive for repeal. coverage of the medical device tax

Medical device lobbying groups are remobilizing efforts to repeal a 2.3% sales tax as the industry scrambles to meet the 1st payment deadline this month.

A trio of industry advocates banded together to urge Congress to take action on the tax, which they estimate will cost medical device makers about $194 million per month.

The 1st payments are due today and should represent 2.3% of applicable sales from January 1 to January 15, according to IRS regulations released last month. The federal tax agency agreed to waive late fees for companies who miss early due dates.

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"Instead of investing in new medical technologies or creating new jobs, innovators across the U.S. wrote a check to the IRS this month," Medical Device Manufacturers Assn. president Mark Leahey said in prepared remarks.

"Every dollar spent on this tax is a dollar taken away from medical innovation and job creation," lobbying group AdvaMed's president & CEO Stephen Ubl added. "This tax is already resulting in layoffs, reduced investments in R&D and delays in significant capital improvements. We urge Congress to act swiftly and repeal this job-killing, innovation destroying, anti-competitive tax."

The tax took effect at the start of the year over the objections of the largest lobbying organizations in the medtech industry, but the fight is not over, the groups vowed.