Two bills to repeal the medical device tax were introduced in Congress this month. The device tax was enacted as part of the Affordable Care Act and finalized in IRS regulations late last year. Representatives Erik Paulsen (R-MN) and Ron Kind (D-WI) introduced the “Protect Medical Innovation Act of 2013,” on February 6. The House bill (H.R. 523) currently has 187 bipartisan cosponsors. On February 7, Senator Orrin Hatch (R-UT) introduced companion legislation, the “Medical Device Access and Innovation Protection Act,” in the Senate (S. 232). The Senate bill currently has 28 bipartisan co-sponsors, including Senators Amy Klobuchar (D-MN), Al Franken (D-MN), Bob Casey (D-PA), and Joe Donnelly (D-IN).
This recent legislative activity coincides with state efforts to offset the impact of the tax on medical device manufacturers. For example, an Indiana state legislator has introduced a measure that would offset the federal tax with a state tax credit.
Previously, several Democratic Senators had sought to delay the tax’s effective date, which requires taxpayers with a tax liability greater than $2,500 per quarter to begin making bi-monthly tax deposits on January 29, 2013. However, the President has said that the tax would go into effect as scheduled.