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Phillips Leads on Repealing the Medical Device Tax for Minnesota Innovators

After years of extensions, Phillips advocated for a budget deal that includes full repeal of the medical device tax

Rep. Dean Phillips (MN-03) announced today that he successfully pushed for a permanent repeal of the medical device tax to be included in Congress’s end-of-year funding deal, which passed the House today. Minnesota is the birthplace and epicenter of the medical device industry, which leaves Minnesota medical device companies paying 25% of the total national medical device tax burden. Small and medium sized medical device businesses in the early innovation stage, which make up 80% of the industry in Minnesota, are particularly harmed because the tax is placed on revenue, not profit.

“The medical device tax has overstayed its welcome,” said Phillips. “Too many jobs have been lost and too much innovation has been stifled due to this tax, which disproportionately impacts Minnesota. Right now, Minnesota ranks second to last in the difference between the money we send to Washington and what we get back. Tax revenue should not come at the expense of Minnesota workers and Minnesota companies, and I am on a mission to make the tax code more equitable for our State.”

In Minnesota, the medical device industry supports more than 34,000 jobs and adds more than $23 billion to the state’s economy every year. Phillips’s Third District has the highest concentration of medical device businesses in Minnesota.

The spending agreement also blocks efforts to undermine the Affordable Care Act, stopping the Trump Administration from preventing automatic re-enrollment in plans purchased on the exchanges, even if the customer does not select a new plan during open enrollment.