With End to Government Shutdown, Device Tax Delayed Two Years

By MedTech Intelligence Staff

It’s good news for device companies, but industry associations and stakeholders are still seeking a permanent solution.

This week as Congress passed legislation to reopen the government, with it came another two-year suspension of the medical device tax. Just three weeks ago the tax was reinstated after a previous two-year delay, and fears about its impact on research, product development and jobs had already been quickly mounting. The Continuing Resolution, passed on Monday, retroactively delays the tax from January 1. Although device companies and industry groups are happy about the delay, the push for a permanent solution continues.

“This delay is of paramount importance to the numerous companies in our state, both large and small, that produce critical medical technologies to help patients live longer, healthier lives,” said Kelly Slone, President and CEO of BioUtah in a statement. “Now, instead of preparing to pay the IRS, these companies can continue to focus on innovation and investment. Longer-term, the tax must be fully repealed to provide the certainty this industry needs to expand in Utah, deliver cutting edge breakthroughs and further advance health care worldwide.”

Other industry groups shared a similar sentiment.

“Suspending the tax will ensure that the more than 2,000 medtech establishments in California will continue to have the resources to develop the breakthrough products and technologies that are needed by millions of patients around the world,” said Joe Panetta, president and CEO of California life sciences industry association Biocom. “Nevertheless, Biocom continues to support permanent repeal of the tax and looks forward to working with Congress to provide permanent relief.”

“Congress’ action – just days before medical technology innovators were set to start cutting checks to the IRS – means funds will not be diverted from current investments in jobs, capital improvements and research into new treatments & cures,” said AdvaMed President and CEO Scott Whitaker in the association’s statement. “While the two-year suspension is welcome, it is only an interim step toward the truly needed action by Congress to fully repeal this tax and unleash the promise of medtech innovation. We look forward to continuing to work with the Hill on a bipartisan basis to drive towards permanent relief.”

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