Obama signs medical device excise tax delay into law

President Obama has recently signed into law the $1.1 trillion omnibus spending bill and $650 million tax break package that includes a 2-year suspension of the 2.3% medical device excise tax.

Under the terms of the agreement, known as the Consolidated Appropriations Act 2016, the medical device excise tax will now not be eligible for reinstatement until the 2018 fiscal year. The tax was originally approved as part of the Affordable Care Act.

“America’s medical technology companies, including our nearly 2 million employees and the countless patients we serve, appreciate the broad bipartisan effort to suspend the medical device tax,” Vincent A. Forlenza, board chairman of AdvaMed and chairman, chief executive officer and president of BD, said in an AdvaMed press release. “This critical relief would not be possible without the tireless efforts by a large group of champions in Congress as well as among the patient, provider and research communities. Congress and the administration have demonstrated that they recognize the negative effects of this tax. We urge policymakers to continue their work to eliminate the device tax and address other factors that are threatening the health care innovation ecosystem.”

The entire package was approved by a vote of 65 to 33 in the Senate. The House of Representatives approved the tax package by a vote of 318 to 109 and the omnibus spending bill by a vote of 316 to 113.

According to a recent estimate from the Non-Partisan Joint Committee on Taxation the suspension of the medical device excise tax is estimated to subtract $3.4 billion from the federal budget between 2016 and 2017.

Reference:

http://thomas.loc.gov/cgi-bin/query/z?c114%3AH.R.2029%3A