U.S. Medical Device Tax Delayed Until 2020January 22, 2018
Attention manufacturers and importers of medical devices....the unpopular 2.3% medical device tax has been delayed for another two years.
Do you manufacture or sell medical devices? You’re in luck—Congress has delayed implementation of a 2.3 percent tax on the sale of medical devices. It went back into effect on January 1st, 2018 after a two-year suspension, but Congress has since changed this legislation.
A little more on the U.S. medical device excise tax
The excise tax is a 2.3% levy enforced on the sale of catheters, pacemakers and other healthcare products. It started in January 2013 to help fund Obamacare and was projected to raise roughly $30 billion over ten years, before its repeal in 2015.
Why was it repealed?
The U.S. Congress approved the levy’s suspension in 2015 after the tax drew harsh criticism from both political parties as well as medical industry lobbying groups.
The first suspension of the tax expired on New Year's Day 2018 after unsuccessful last-ditch efforts by Republicans, Democrats and medical device manufacturers to keep it around.
The first payment would’ve been due to the Treasury Department on January 29, but the spending deal language passed Monday, January 22nd 2018 retroactively delayed the tax beginning on December 31, 2017.
The tax will now go into effect January 1st, 2020.
Interested in learning more about how this tax will affect your business? Contact us.