Massachusetts Authorizes Study Panel on Medical Device Excise Tax Offset Credit
The Massachusetts State Legislature agreed to a few technical changes offered by Governor Patrick in authorizing a special panel to study the feasibility of a state tax credit to mitigate the impact of the federal medical device excise tax (MDET). The study panel was strongly supported by MassMEDIC and the Legislature adopted specific language offered by the organization as it was considered during the FY 2015 budget debate.
Fully operational since January 1, 2013, the MDET imposes a 2.3% tax on domestic sales of most medical devices. The funds are used to subsidize health care coverage under the Affordable Care Act (ACA) and, according to a recent MassDevice.com story, raised $1.4 billion in its first year.
The Commission will be comprised of: “the secretaries of Administration and Finance and of Housing and Economic Development, or their designees, who shall serve as co-chairs; the House and Senate chairs of the Joint Committee on Revenue; the House and Senate chairs of the Joint Committee on Economic Development and Emerging Technologies; one member of the Senate to be appointed by the minority leader; one member of the House of Representatives to be appointed by the minority leader; one representative of the Massachusetts Medical Society; one representative of the Massachusetts Medical Device Industry Council, Inc.; one representative of the Associated Industries of Massachusetts, Inc.; and one representative of the Donahue Institute at the University of Massachusetts.” The panel will consider policy options, with a final report and recommendations due by June 30, 2015.
“By authorizing this commission, Governor Patrick and the State Legislature recognize the serious effect the federal device tax has had on MedTech companies in Massachusetts,” said MassMEDIC President Tom Sommer. “Millions of dollars are leaving this state that might have been spent on research and development of technologies that improve the quality of health care delivery. MassMEDIC looks forward to participating in the panel’s work and will make the case for a meaningful tax credit that could help mitigate the impact of the device tax.”
MassMEDIC members will be notified of all of the panel’s meetings, and member input will be solicited and submitted to the panel as mitigating policies are sought.