US Congress Suspends Medical Device Tax through 2019

February 2, 2018: By Joan McKenna

US lawmakers have suspended the medical device tax through 2019 in a short-term spending bill passed Jan. 8.

The medical device tax imposes a 2.3 percent sales tax on products such as pacemakers, artificial joints, surgical gloves, and dental instruments. It exempts eyeglasses, contact lenses, hearing aids, wheelchairs, and other devices the public generally buys for individual use. The tax applies to imported products, as well as those produced in the US.

Congress initially suspended the medical device tax in December 2015 for a two-year period.

The tax was created by the Affordable Care Act of 2010 and took effect in 2013.

US tax officials noted in 2013 that compliance was an issue. In the first half of 2013, collections were only 76.1 percent of projections.

Overall, the IRS collected $1.4 billion in medical device taxes in 2013 and $1.9 billion in 2014.

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