With the federal medical device tax causing mass layoffs at many medical device manufacturers, many are looking to state-level governments for relief. One state, Indiana, may become a tax haven for companies experiencing hard times from the 2.3 percent tax.
According to a report by Indystar, the medical device industry employs an estimated 20,000 workers in Indiana. If state legislators don’t find an effective way to curb the 2.3 percent excise tax, industry experts estimate that up to 2,000 jobs could be terminated. The medical device tax was created as part of President Obama’s health reform package.
In a meeting with medical device trade groups last week, industry leaders announced that a “state-based competitiveness agenda” would be created to offset the damaging impact of the excise tax.
Stephen Ubl is the CEO and president of the Advanced Medical Technology Association. In prepared remarks, he said, "It is an acknowledgment of the difficulty of moving some of these issues at the federal level, but I think they complement one another." He continued, "A lot of these issues have particular resonance at the state level, where so many jobs are created in this industry."
A new measure by Kathy Heuer, a republican representative from Columbia City, would counter the federal medical device tax with a state-level tax credit. This measure will cost the state an estimated $3.9 to $9.7 million every year. It could benefit companies like DePuy, Biomet, Zimmer and Cook Medical.