Medical device manufacturers aren't the only ones dreading the implementation of the much reviled 2.3% medical device excise tax, which will take effect on January 1, 2013.
The US Internal Revenue Service (IRS) has a pretty monumental task ahead of them, facing more than 40 changes
to the tax code as part of the Affordable Care Act. Although some have speculated that the IRS doesn't have the resources to take on this task, the IRS recently defied this by issuing a 58-page ruling
on the tax. The first payments will be collected four weeks into 2013.
Although it's looking pretty likely now that the medical device industry won't win the battle to repeal the tax in 2012, they're not expected to give up the fight in 2013. According to Clinica
, it's possible that discussions surrounding the medical device excise tax will be rolled into discussions surrounding the impending fiscal cliff. Other tax measures will also be up for congressional debate in 2013, and the medical device industry might have some hope of fighting to repeal the tax at that time.
Nonetheless, medical device manufacturers should definitely gear themselves up for the implementation of this tax and make sure that they're as prepared as they can be.
For some background on the tax for those of you who don't know (although there has been so much uproar about this I'm guessing this isn't very many people), the 2.3% medical device excise tax is going to be put in place as part of the Affordable Care Act to help pay for health insurance to cover more Americans. The medical device industry argues that this could hinder innovation and cost as many as 43,000 jobs in the US. See our previous discussions on the topic here.