Posted in Medical Device Business by Qmed Staff on September 23, 2014
The House of Representatives has passed a bill that would repeal the medical device tax. The repeal was included within H.R. 4: Jobs for America Act, which the website http://govtrack.us says has a 17% chance of being enacted. The House passed that legislation in a vote of 253 to 163. Republicans overwhelmingly voted in favor of the bill, while the majority of Democrats voted against it.
In the past couple of years, politicians have passed a number of symbolic resolutions against the tax. This most recent attempt to repeal the tax is unique in that it would issue a refund to manufacturers that have already paid the tax since it went into effect on January 1, 2013.
The medical device tax has also been in the news in September as reports suggest that IRS has had trouble collecting it. The IRS projected medical device firms to file 9,000 to 15,000 tax returns when it first made plans to collect paperwork for the tax last year, according to the Star Tribune. In the end, 5107 returns were filed.
Unspurprisingly, IRS has also experienced a shortfall when it comes to revenue from the tax. In the first six months of 2013, the amount the IRS collected clocked in at 24% less than was anticipated.
The IRS acknowledged that it “cannot identify” all of the manufacturers required to pay the device tax.
It is possible that manufacturers are confused as well. In the aforementioned Star Tribune article, AdvaMed’s general counsel Chris White said he has “no knowledge of a tax revolt.” He continued: AdvaMed is “pressing for guidance” from the IRS regarding who should pay the tax.
The trade organization AdvaMed voiced its support for the recent push to repeal the tax. “Repealing this tax will help ensure the U.S. maintains its global leadership in this high-tech manufacturing sector and advance the development of new cures and treatments,” explained Stephen J. Ubl, president and CEO of AdvaMed in a statement. “We greatly appreciate the ongoing support from both sides of the aisle on this important issue.”
