Repeal of medical-device tax urged

LOUISVILLE – An effort to repeal a national 2.3 percent tax on medical devices set to go into effect in 2013 is headed to the Senate following the U.S. House of Representatives’ vote to repeal the tax.

The medical-device tax is an element of the Affordable Care Act, which was passed by Congress and signed into law in March 2010. President Obama has threatened to veto the repeal if it comes to his desk.

Several national medical-device companies with local offices have complained that the new tax would hurt their bottom lines. Companies such as Covidien Plc (NYSE: COV), with about 1,400 workers in Boulder, have weighed in against the tax, as have Medtronic Navigation Inc. (NYSE: MDT) with about 300 workers in Louisville, and others.

SPONSORED CONTENT

Select your Republic Services residential cart now!

In preparation for Republic Services becoming the primary provider of residential recycling, yard trimmings, and trash, residents should now select the best cart size and service schedule for their household needs.

“There’s no question that this is a heavy burden on innovation and remains ill-advised tax policy,” Amy von Walter, a corporate Medtronic spokeswoman, said in an emailed response to a request for comment. “The economic challenges our nation faces demand reconsideration of the device tax.”

Medtronic’s office in Louisville conducts research on surgical imaging and navigation tools. It also has a surgeon-training center where doctors learn how to use the company’s tools.

“We hope that with (the) House vote to repeal the tax, that members of both parties step up their efforts to find common ground on this and other issues that are core to promoting jobs and innovation,” von Walter said.

When the Affordable Care Act was signed, it was estimated that the proposed tax cost on the medical-device industry would be $20 billion, von Walter said. In the last two years, she said, that cost estimate has gone up significantly to $29 billion.