TAX NEWS - JUNE 2010

Boston Tax: Medical device makers: New tax will cost jobs

BOSTON — Medical device manufacturers are bristling over a key provision in the nation's new health care law which they say forces them to shoulder an unfair cost of expanded insurance coverage.

The companies say a 2.3 percent excise tax on medical devices like heart defibrillators and surgical tools for hospitals, health centers and ambulance services will cost them an estimated $20 billion in new taxes over the next decade.

They say it will also will force them to lay off workers and curb the research and development of new medical tools.

The tax, which doesn't kick in until 2013, has also pitted the state's two senators against each other.

Sen. John Kerry, a Democrat, helped cut the original proposed tax hike in half, while Republican Sen. Scott Brown has proposed repealing it.