The next Massachusetts governor won’t be spending any political capital defending the medical device tax, a 2.3% excise tax on U.S. medtech sales. Both of the leading candidates told MassDevice.com yesterday that they would push for a federal appeal and consider a tax credit to offset the levy.
The Democratic nominee, Massachusetts attorney general Martha Coakley, told MassDevice.com in an interview yesterday that as governor she would urge the Bay State’s congressional delegation to push for a repeal of the medical device tax and would be willing to consider a tax credit for medtech companies in the Commonwealth.
"I would like to see it changed at the federal level, because it’s been a great burden for our [medtech] industry," Coakley told us. "I certainly would consider [an offset] because it’s an important industry for the state, but I really think we need to push on a federal level."
A spokesman for her Republican rival, former Harvard Pilgrim Health Care CEO Charlie Baker, said via email that Baker would also "urge the congressional delegation to repeal the medical device tax to protect Massachusetts’ economy."
Baker would also support a tax credit for Mass.-based medical device companies, according to spokesman Tim Buckley. The tax, which went into effect on the 1st day of 2013, was enacted as part of Obamacare in 2010. It puts a 2.3% excise tax on all U.S. sales of prescribed medical devices. Projected to raise some $30 billion over 10 years, the tax has proven difficult to collect and generated much less revenue than expected.
Deval Patrick, the current occupant of the corner office on Beacon Hill, pledged over the summer to establish a special commission to study the tax credit idea. The panel is slated to examine the potential cost of an offset, its potential benefit for medtech makers and the credit’s economic impact on the state budget. But there has been grumbling among medtech players in the state that the Patrick administration is moving too slowly in setting up the panel. The commission has until June 30, 2015, to issue its report, according to the Massachusetts budget approved by Patrick July 11.
Baker’s campaign said the commission would be a priority of his administration.
"If the committee is not yet formed when he takes office, Charlie will act to form the committee because he believes medical device companies are essential to growing the Massachusetts economy," Baker told us in an email.