Medical Device Tax Suspension Expires, Companies Want Repeal

Indiana’s large life sciences industry will once again pay a tax on medical devices after legislators failed to continue a suspension of the measure.

The 2.3 percent tax first took effect in 2013 as part of the Affordable Care Act. Lawmakers passed a two-year suspension on the tax in 2015, but it expired at the end of last year.

In a last minute bid, U.S. Repr. Jackie Walorski introduced a bill in late December to continue the suspension for another five years. But, legislators didn’t act in time.

Greg Crist is the Executive Vice President of Public Affairs for Advamed, a trade association for medical device manufacturers. He says just suspending the tax for another year isn’t enough, because companies are often working years in advance. This means the tax could have long-ranging effects.

“We’re not an annual type industry where we set out agendas in January, and we complete them by December. Our innovations cycles are much longer, 8-10, 5-10 years,” he says.

Crist says companies are advocating for the repeal of the tax to be included in a government-funding bill from Congress.

Legislators have until Jan. 19 to pass that bill. Manufacturers would be required to pay the tax for the first time on Jan. 29.