President Obama's Affordable Care Act's ("ACA") tax on medical devices may apply to your smart phone and tablet. Members of Congress are just now questioning whether the public's actual use of these devices could trigger the imposition of a new and unexpected federal tax on users. The Act was passed in March, 2010, and the Food & Drug Administration ("FDA") has since updated its device-listing regulations, which could broaden the definition of "taxable medical devices" under the Act significantly. But, how could this possibly impact those of us who don't manufacture, buy or sell medical devices?
"Mobile medical applications" are made for smartphones and tablets. These "apps" range in use from monitoring the user's caloric intake to allowing doctors to view patient x-rays on their phones. It's likely you already have something of this nature on your phone or tablet. The medical apps' range of use and broad application across devices has made them a target of the FDA. Those in Washington objecting to this increased regulation by the FDA of these apps are citing the ACA's vagueness on this subject as the basis for their concerns.
Members of the medical device community have already called for a repeal of the tax on their products, and claim the tax will force them to move their operations overseas. This new issue of whether or not smartphone and tablet app users will be taxed raises a similar concern: a new, additional tax could stiffle the market for them, hamper creativity and innovation in that industry, and eventually affect the economic benefits of that industry to the U.S.
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