Medical Device Tax Repeal’s Support
The York County Economic Alliance supports the repeal of the Medical Device tax as was contained in and enacted as part of the Patient Protection and Affordable Care Act (PPACA). Furthermore, the Economic Alliance has been actively supporting its repeal since March 2013. The medical device tax is a 2.3 percent excise tax based on the price for which the medical device is sold, to be paid by either the U.S. importer (foreign manufactured) or the U.S. manufacturer (U.S. manufactured medical device) effective since January 1, 2013.
The York County Economic Alliance thanks Senator Bob Casey and Senator Pat Toomey, who are co-sponsoring Senate Bill 149 or the Medical Device Access and Innovation Protection Act, which would amend the Internal Revenue Code to repeal the excise tax.
The York County Economic Alliance thanks Representative Scott Perry who is a co-sponsor of House Resolution 160, known as the Protect Medical Innovation Act of 2015, which would also repeal the excise tax by amending the Internal Revenue Code
The York County Economic Alliance has provided information and a resolution in support of the repeal to Senators Casey and Toomey as well as to members of the regional delegation to the U.S. House.
Since the U.S. is a leader in medical device innovation, it is one of the few major industries that both boasts a net trade surplus and is a job-creator. Small businesses are the backbone of the U.S. economy and the medical device industry is primarily comprised of small business, as 80 percent of its companies have 50 or fewer employees.
The Economic Alliance resolves that the tax threatens the national medical device industry which employs more than 400,000 workers nationwide (indirectly responsible for almost 2 million more to supply and support the highly-skilled workforce). The Medical Device industry generates approximately $25 billion in payroll, pays out salaries that are 40 percent higher than the national average ($58,000 vs. $42,000) and invests nearly $10 billion in research and development annually.
According to the Senators, a recent study by the Advanced Medical Technology Association found that the tax impacted approximately 33,000 American jobs in its first year, either through layoffs or forgone jobs that would have been created. In addition to the national impact, the manufacturing of medical devices is an important cluster of business in York, PA and the tax threatens these local medical device companies.
The tax also hampers the Economic Alliance’s ability to attract that growing segment of business, who may otherwise locate in York, as our metro area is the least costly location for medical technology manufacturing in the New England and Mid-Atlantic regions. According to a study by The Boyd Company Inc. in April 2011, in a survey of 55 locations across the US, York, PA ranks among the 25 lowest cost locations.
“I’m hopeful that this new Congress can come together in a bipartisan way to repeal the medical device tax,” Senator Bob Casey’s press release stated, “The current tax on medical devices presents significant challenges for businesses in Pennsylvania who innovate and create jobs.”