Orthopedic tax pains (Sherry Slater @ Journal Gazette)
With U.S. sales to grow costlier, one company looks abroad
Nick Deeter’s five-year-old company is growing, but he’s the one in pain.
The founder and chairman of OrthoPediatrics Corp. knows the financially responsible thing to do is market his products overseas. Not only do U.S. sales involve significant upfront costs, but they will soon be subject to a 2.3 percent medical device tax scheduled to take effect Jan. 1, 2013. International sales are exempt from the tax and upfront costs.
Across the medical devices industry, executives are bracing for a tax increase aimed at revenue – not profit – they say will unduly hurt new companies struggling to cover startup costs before they start turning a profit.
Strategies for dealing with the additional expense include cutting jobs and cutting back on research and innovation, they say.
The issue is critical in Kosciusko County, where the orthopedics industry employed 13,000 in 2009, according to a study by the Business Research Center at Indiana University. That was 43 percent of total county employment.
Jobs at risk?
A bill gaining traction in Congress would repeal the tax. T...
