House Passes Legislation that Both Repeals and Refunds the 2.3% Device Excise Tax (HealthPointCapital)
In the last action till after the mid-term elections in November, the U.S. House of Representatives voted in favor of legislation that repeals the 2.3% medical device excise tax, demonstrating that the campaign to rescind the device tax continues in Washington.
The House voted in favor of the “Jobs for America Act”, a package of bills that had already individually passed the lower chamber, with a vote of 253 to 163. Republicans mostly voted in favor of the bill, while the majority of Democrats voted against it.
In the last couple of years, Congress has passed a number of symbolic resolutions against the tax, but this most recent attempt is unique because it not only revokes the tax, but also would issue a refund for all levies paid by medical device manufacturers since the tax went into effect on January 1, 2013.
Towards the end of summer, it was reported that the IRS has had trouble instituting and collecting levies from device manufacturers. The Treasury Inspector General for Tax Administration (TIGTA) acknowledged that the IRS “cannot identify” all of the manufacturers required to pay the device tax. The IRS had initially projected the number of medical device firms to file 9,000 to 15,600 tax returns, yet only 5,107 returns have been filed according to TIGTA. Additionally, the amount the IRS eventually collected, was approximately 24% less than what was anticipated.