Medical-Device Tax to Resume After 2-Year Suspension

While much of corporate America will enjoy a tax cut in 2018, one industry is getting a tax increase.

A 2.3-percent excise tax on medical device manufacturers is set for reinstatement Monday after a two-year hiatus. It was originally imposed in 2013 as one of several taxes and fees in the Affordable Care Act that pay for expanded health coverage.

The tax was unpopular with Republicans but also many Democrats from states like Massachusetts and Minnesota with large clusters of medical device firms.

Congress voted to suspend the tax for 2016 and 2017 and the industry fought to have it permanently eliminated by 2018. But that hasn’t happened yet and companies are warning the tax will cost $20 billion over the next 10 years, hurting jobs and product development.