Washington, D.C. — U.S. Senator Joe Donnelly welcomed the inclusion of a two-year suspension of the medical device tax in the proposed bipartisan tax relief agreement, which was released last night. Congress is expected to begin considering the tax relief package later this week.
Donnelly said, “I am pleased there is bipartisan consensus to suspend the medical device tax for two years, and that it has been included in the proposed tax relief package. It’s important to encourage job growth and innovation in our life sciences and manufacturing sectors, including the medical device industry. Suspending the device tax would make a difference for Hoosier businesses and workers, as well as patients who use these medical products.”
Donnelly is a longtime supporter of repealing the medical device tax, and earlier this year joined a bipartisan group of senators inreintroducing bipartisan legislation to repeal the medical device tax.
Indiana is home to many innovative medical device companies, which together employ about 20,000 Hoosiers. The medical device industry accounts for more than 40 percent of the jobs in Indiana’s life sciences industry, making Indiana the fifth-largest state in the country in percentage of medical technology sector jobs, according to a 2012 BioCrossroads report. The same report found that the state’s medical device industry generated more than $10 billion of annual economic output. BioCrossroads announced in February 2014 that Indiana ranked second in the nation in export of life science products, which include medical device products.
A 2.3 percent medical device tax went into effect on January 1, 2013, under the Affordable Care Act. Currently, the tax is levied on the sale price of any medical device as defined by the Food and Drug Administration. Products subject to the tax include items ranging from surgical drapes and catheters to advanced imaging equipment.
