Medical technology trade association Advanced Medical Technology Association (AdvaMed) is urging Congress to pass a tax provision to change how small businesses deduct their research and development expenses.
In a letter to Senate Majority Leader Chuck Schumer, AdvaMed President and CEO Scott Whitaker underscored the critical importance of passing such a provision.
“If Congress considers a tax package, we urge the inclusion of a provision allowing companies to deduct their research and development expenses in the year the expense was incurred,” Whitaker wrote.
Prior to 2022, the tax code allowed medical technology and other industries to deduct their R&D expenses in the year they were incurred. In January 2022, however, the policy changed and now requires a deduction over five years. This makes it harder for companies to make critical investments in developing the latest medtech, Whitaker noted.
The five-year deduction requirement is especially hard for small and emerging companies, which account for more than 80% of the medtech industry and are critical to driving innovation and improving patient outcomes, he added.
AdvaMed is the world’s largest trade association representing medical technology companies.
