Democratic senators request delay for medical device tax
In a letter sent to Senate Majority Leader Harry Reid last week, 18 Democratic senators and senators-elect requested a delay in the medical device tax, a 2.3 percent tax that is slated to go into effect on Jan. 1, 2013 as part of the Affordable Care Act.
Amy Klobuchar (D-Minn.) and Kay R. Hagan (D-N.C.) authored the letter to express concern over the negative impact the tax could potentially have on the medical device industry and the U.S. economy as a whole. The letter was signed by 16 of their Democratic colleagues, including John Kerry (D-Mass.), Joe Lieberman (D-Conn.), Charles Schumer (D-N.Y.) and Al Franken (D-Minn.).
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“The medical technology industry directly employs over 400,000 people in the United States and is responsible for a total of two million high-skilled manufacturing jobs," the lawmakers wrote in their letter. "Additionally, this industry is also one of the few that enjoys a net trade surplus, significantly boosting U.S. exports around the globe.”
The IRS released its final regulations for the tax on Dec. 5, which is not enough time for the medical device industry to comply, according to the letter.
“With this year quickly drawing to a close, the medical device industry has received little guidance about how to comply with a tax – causing significant uncertainty and confusion for businesses. As we work together to develop a long-term solution to help move our economy forward, reduce our debt and reform our tax code, we urge you to support delaying enactment of this provision in a fiscally responsible manner,” the senators wrote.
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The medical device community has long been vocal in its opposition to the tax.
Steve Ferguson, chairman of the board of Cook Group, parent of medical device firm Cook Medical, believes that the tax will hurt the industry.
"The industry is having to work to adjust to the rules. It's an international marketplace with international competitors. Companies have to adjust to remain competitive with people based in foreign nations," he told Healthcare Finance News in September. "I'm hopeful (lawmakers) will reconsider what they did. I'm hopeful they will correct the mistake.”