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Compliance In Focus
Posted by John Lehmann on Fri, Feb 22, 2013

A Call to Eliminate Tax on Certain Medical Devices

A Call to Eliminate Tax on Certain Medical DevicesEarlier this month Congressman Mike Turner of Ohio reintroduced the First Responder Medical Device Tax Relief Act. According to the press release on the Congressman’s website, this legislation is to repeal the2.3% excise tax on the sale of medical devices by manufactures, providers, and importers.

It’s important to note the bill would not lift the tax from all medical devices; the exemption would only apply to medical equipment used by first responders. As stated in the bill, “The term ‘qualified emergency medical device’ means any medical device of a type furnished by first responders or ambulance services in providing out-of-hospital or pre-hospital care, or transport to a medical care facility, for individuals--

(A) with illnesses, injuries, or other medical emergencies, or

(B) in need of medical transport, extrication, or evacuation.’.”

The reason the act is being reintroduced is the belief that President Obama’s health care law and tax “will place yet another burden on American businesses, stifling development of innovative life-saving products and costing jobs when our economy is struggling to recover, and will result in higher costs and inferior care for patients.”

How is the industry responding to this piece of legislation? Anthony J. Dennis, Ph.D., President and CEO of BioOhio (the state bioscience industry association) released a letter in support of the bill. The letter states that currently the medical device industry is in a “delicate balance”, and the letter notes:

  • The demand for innovative medical devices is high
  • But, the costs of domestic manufacturing is “daunting”
  • In fact, many are turning to outsourcing because of the less expensive alternative

In the Congressman’s press-release, Ohio is singled out in regard to lifting the tax burden. Congressman Turner states, “Southwest Ohio has long been known as an incubator for advanced manufacturing. The gains and jobs medical device manufacturers have made in our state will not continue with the implementation of this tax. This tax is prohibitive to the type of growth Ohio and the nation needs in these difficult economic times.”

What are your thoughts on the bill being reintroduced? Do you believe certain medical devices should be exempt from the 2.3% tax? Please let us know what you think, and comment below.

Photo Credit: Scootie

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Topics: BioOhio, Medical Device Tax, Congressman Mike Turner


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