July 13, 2018

Medical Device Tax Reinstates

  • by AGD Washington Advocacy Representative
  • Jan 4, 2018

The 2.3 percent excise tax on medical devices was reinstated on Jan. 1, 2018. Congress had previously suspended the tax for 2016 and 2017, but efforts to permanently repeal the tax have not been successful. It was originally imposed in 2013 as one of several taxes and fees in the Affordable Care Act that pay for expanded health insurance under the law.

Companion legislation to amend the Internal Revenue Code to repeal the tax (H.R. 184/ S. 108, the Protect Medical Innovation Act) has been introduced. Despite broad support in both the House and the Senate, however, Congress has not taken action on repeal.  

Regardless of earlier failures, industry officials say congressional backing for repeal remains strong. The next attempt could come in connection with a spending bill needed by Jan. 19 to avert a government shutdown. In a Dec. 20 letter to the White House, the Advanced Medical Technology Association (AdvaMed) urged President Trump to support repeal of the tax and, in the interim, to direct the IRS to grant companies "administrative relief" from the tax. That could include such steps as waiving the bimonthly deposit requirement or any penalties resulting from late payments. "Retroactive action by Congress next year cannot fully undo the impact of allowing this tax to be triggered on Jan. 1," the companies wrote.

Impact on General Dentistry: The AGD opposes the excise tax on medical devices in its current form and will continue to push for its full repeal.