Medical Device Tax Is Permanently Repealed

The medical device industry rejoiced that a last minute bipartisan federal spending package brought an end to the tax the medical technology industry has been fighting for a decade.

The 2.3% tax on medical device sales that was part of the Affordable Care Act was on temporary hiatus since 2016, but was scheduled to return at the end of 2019 if Congress didn’t eliminate the tax or put it on hiatus once again. The tax was part of the Affordable Care Act of 2010 and was one of a number of funding mechanisms meant to help pay for the health reform.

The med-tech industry long argued that the tax limited jobs and innovation. Medical device makers feared a major hit to their bottom lines, research budgets and jobs if Congress didn’t end the tax before the end of the year. A report from the Tax Foundation showed a return of the medical device tax “…would result in a decline of 21,390 full-time equivalent jobs and a reduction in GDP of $1.7 billion.”

With the end of this burdensome tax, the U.S. medtech industry can continue to develop innovations that save and improve patients’ lives, and create high-paying, high-tech jobs. “This is a great day for American patients, American jobs, and American innovation: The medical device tax is officially history,” Scott Whitaker CEO of AdvaMed declared. AdvaMed represents hundreds of medical device makers, including small firms and startups as well. The repeal of the medical device tax is wonderful news for New York and Florida biotech and life sciences companies which can now compete more easily with corporations overseas, expand at home, and invest more in their community.

The diagnostics industry now expects R&D spending to increase. There are approximately 9,000 U.S.-based medical device manufacturers which provide about 520,000 U.S. jobs and produce $150 billion in direct sales, according to industry advocacy groups. A report released in October 2018 found that the tax violated many core tax principles including tax neutrality and transparency. That same report also suggested eliminating the tax would encourage medical innovation and improve the quality of care.

CONTACT US: 2020 will bring many changes for pharmaceutical, biotech, medical device and diagnostic companies. Contact our accounting professionals and R&D tax experts so that you are making tax efficient decisions and have the advantage in a rapidly evolving environment. We can assist with your assurance and audit needs, in addition to providing tax services, and can help with your insurance, investment, and commercial banking needs as well. Call toll free 855-534-2727.
 

In The News

The New York Real Estate Journal recently featured a "Ones To Watch" Spotlight, focusing on both up and coming professionals as well as industry veterans across all areas of real estate. Congratulations to Lou Fuoco CPA, CEPA, for being included in this prestigious group of “OTW” for 2019!
Read more...

Press and Events

Fuoco Group and TFG Related Entities are proud to announce that Fuoco Group’s Hauppauge Office, was voted #2 overall in the category of “Accounting Firm Less Than 100 Employees” in the 2019 Long Island Business News Reader Rankings. The Firm was also honored to be recognized as a “top three” Best Accounting Firm Finalist.
Read more...
 
Scott Small, CPA, has  joined the Fuoco Group accounting and business advisory firm as Audit and Accounting Senior Manager in the Hauppauge office. Scott will assist the Directors in New York and Florida with expanding the Firm’s accounting and assurance practice. 
Read more...