STATEHOUSE - House Representative Kathy Heuer (R-Columbia City) authored House Concurrent Resolution 51, urging the United States Congress and President Obama to repeal the new federal excise tax on medical devices. The resolution passed out of the Senate today.
“It is important for us as a state to stand up against the excise tax on medical devices,” said Rep. Heuer. “Indiana’s medical device industry is one of our state’s most valuable economic assets, and we are recognized, nationally, as a leader in the health care sector.”
A new 2.3 percent federal excise tax on the sale of medical devices by manufacturers, producers and importers took effect on January 1, 2013. The Joint Committee on Taxation estimates that the tax will generate $29 billion in revenue in its first ten years.
“The negative repercussions of this tax are concerning,” said Rep. Heuer. “The impact on the medical device companies in our state is severe, but also in looking at the entire country, this tax will harm the United States’ global competitiveness, stunt medical innovation, restrict the ability of patients to receive medical devices and hinder the overall care to patients needing these devices.”
A study by the Manhattan Institute found that the medical device tax will nearly double the industry’s taxes and could lead to 43,000 people losing their jobs. In 2009, the year before the passage of the Affordable Care Act, which imposed the additional tax, the medical device industry employed 409,000 workers. In 2011, the latest year available, the industry employed 387,000 workers nationally.
The medical device industry employs over 26,000 Hoosiers and 35,000 people throughout Indiana have jobs that are indirectly attributed to the medical device industry. Indiana is the fifth largest employer in the medical technology industry with over $75 million being charged in excise taxes each year.
“Because Indiana is such a large contributor to this industry, we will be critically impacted if the medical device excise tax continues to remain in statute,” said Rep. Heuer. “The federal government should take a page from Indiana’s playbook for economic growth by lowering this tax burden, not increasing it.”