Medical Device Tax Put on Hold for Two Years

January 11th, 2016

Medical Device Tax Put on Hold for Two Years

When President Obama signed the omnibus spending bill last month, he also approved two years of tax relief for medical device manufacturers.  The spending bill included certain tax measures, including the medical device excise tax created by the Affordable Care Act (Obamacare). The 2.3 percent tax became effective in 2013. Now, medical device manufactures will be exempt from paying the tax for any sales completed in 2016 and 2017.  The Joint Committee on Taxation estimates that the two years will save medical device manufacturers more than $3 billion.

The pharmaceutical industry had lobbied heavily to have the tax abolished.  The temporary relief period may open the door for the eventually repeal of the tax entirely.  The new provisions passed by Congress have been applauded by industry stakeholders.

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