Paulsen and Republican colleague Jackie Walorski of Indiana on Tuesday introduced a bill to keep the tax from being collected through 2022. The proposal comes as time runs out on the current two-year moratorium that stopped device companies from having to pay a 2.3 percent sales tax on gross receipts in 2016 and 2017.
“Full repeal is my top priority,” Paulsen said.
But for now, he said, a five-year moratorium seemed like the best available vehicle to keep the tax from coming back Jan. 1. Paulsen believes his proposal can be attached to any of a number of year-end spending measures.
Going forward, Paulsen thinks he makes “a good selling argument” for permanent repeal based on the device companies’ willingness to expand operations by investing tax savings realized during the current moratorium.
The device tax was part of the Affordable Care Act. Collected from 2013 to 2015, it produced more than $5 billion in federal revenue. But it has long been targeted for repeal by the medical device industry, including hundreds of Minnesota medical technology businesses.