House Introduces Legislation to Give Tax Relief to MedTech Manufacturers
Last week U.S. Representative Jackie Walorski (R-IN) and Dean Phillips (D-MN) introduced a bill that offers tax relief to high-tech and medical device manufacturers. The IGNITE American Innovation Act (H.R. 7917) would give liquidity to small- and mid-size companies and allow them to monetize $100 million in accumulated net operating loses from the past five years (at a 21% corporate rate). It would also allow companies covered under the bill to double the value of net operating losses generated by products that are used to prevent, diagnose or treat COVID-19; monetize R&D credits and double the value of R&D credits generated by research into products that prevent, diagnose or treat COVID-19.
“American medtech innovation is driven by small companies and start-ups on the cutting edge of improving patient care. In the best of times, these heavily R&D-focused firms struggle to find the financing and resources they need to navigate tough regulatory and reimbursement pathways in order to bring a new device or diagnostic to market, and that challenge has been magnified by the pandemic,” said Ashley Wittorf, executive director, AdvaMed Accel & Global Head, Investor Relations in a press release.
The bipartisan bill was praised by MDMA President and CEO Mark Leahey as well: “The COVID-19 pandemic continues to cause severe disruptions for countless innovators who are simply trying to keep their doors open and retain their workforce, and this legislation would provide some of the liquidity that is needed to help the medtech ecosystem. While we appreciate Congress’ unprecedented efforts to stabilize the economy, the existing liquidity programs are inaccessible for many emerging, fast growing companies. The top priorities in the United States today are to save lives, and to save jobs, and the ‘IGNITE American Innovation Act’ would go a long way towards accomplishing these critical goals.”
Other industry supporters of the bill include Medical Alley, the Center for American Entrepreneurship, TechNet, the Biotechnology Innovation Organization (BIO), and the National Venture Capital Association.
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