Index for HR3962: Affordable Health Care for America Act

To provide affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes.

Mr. Dingell (for himself, Mr. Rangel, Mr. Waxman, Mr. George Miller of California, Mr. Stark, Mr. Pallone, and Mr. Andrews) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Education and Labor, Oversight and Government Reform, and the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

(a) In general.—Chapter 31 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subchapter:

“subchapter D—Medical devices

“(a) In general.—There is hereby imposed on the first taxable sale of any medical device a tax equal to 2.5 percent of the price for which so sold.

“(b) First taxable sale.—For purposes of this section—

“(1) IN GENERAL.—The term ‘first taxable sale’ means the first sale, for a purpose other than for resale, after production, manufacture, or importation.

“(2) EXCEPTION FOR SALES AT RETAIL ESTABLISHMENTS.—Such term shall not include the sale of any medical device if—

“(A) such sale is made at a retail establishment on terms which are available to the general public, and

“(B) such medical device is of a type (and purchased in a quantity) which is purchased by the general public.

“(3) EXCEPTION FOR EXPORTS, ETC.—Rules similar to the rules of sections 4221 (other than paragraphs (3), (4), (5), and (6) of subsection (a) thereof) and 4222 shall apply for purposes of this section. To the extent provided by the Secretary, section 4222 may be extended to, and made applicable with respect to, the exemption provided by paragraph (2).

“(4) SALES TO PATIENTS NOT TREATED AS RESALES.—If a medical device is sold for use in connection with providing any health care service to an individual, such sale shall not be treated as being for the purpose of resale (even if such device is sold to such individual).

“(c) Other definitions and special rules.—For purposes of this section—

“(1) MEDICAL DEVICE.—The term ‘medical device’ means any device (as defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act) intended for humans.

“(2) LEASE TREATED AS SALE.—Rules similar to the rules of section 4217 shall apply.

“(3) USE TREATED AS SALE.—

“(A) IN GENERAL.—If any person uses a medical device before the first taxable sale of such device, then such person shall be liable for tax under such subsection in the same manner as if such use were the first taxable sale of such device.

“(B) EXCEPTIONS.—The preceding sentence shall not apply to—

“(i) use of a medical device as material in the manufacture or production of, or as a component part of, another medical device to be manufactured or produced by such person, or

“(ii) use of a medical device after a sale described in subsection (b)(2).

“(4) DETERMINATION OF PRICE.—

“(A) IN GENERAL.—Rules similar to the rules of subsections (a), (c), and (d) of section 4216 shall apply for purposes of this section.

“(B) CONSTRUCTIVE SALE PRICE.—If—

“(i) a medical device is sold (otherwise than through an arm’s length transaction) at less than the fair market price, or

“(ii) a person is liable for tax for a use described in paragraph (3),

the tax under this section shall be computed on the price for which such or similar devices are sold in the ordinary course of trade as determined by the Secretary.

“(5) RESALES PURSUANT TO CERTAIN CONTRACT ARRANGEMENTS.—

“(A) IN GENERAL.—In the case of a specified contract sale of a medical device, the seller referred to in subparagraph (B)(i) shall be entitled to recover from the producer, manufacturer, or importer referred to in subparagraph (B)(ii) the amount of the tax paid by such seller under this section with respect to such sale.

“(B) SPECIFIED CONTRACT SALE.—For purposes of this paragraph, the term ‘specified contract sale’ means, with respect to any medical device, the first taxable sale of such device if—

“(i) the seller is not the producer, manufacturer, or importer of such device,

“(ii) the price at which such device is so sold is determined in accordance with a contract between the producer, manufacturer, or importer of such device and the person to whom such device is so sold.

“(C) SPECIAL RULES RELATED TO CREDITS AND REFUNDS.—In the case of any credit or refund under section 6416 of the tax imposed under this section on a specified contract sale of a medical device—

“(i) such credit or refund shall be allowed or made only if the seller has filed with the Secretary the written consent of the producer, manufacturer, or importer referred to in subparagraph (B)(ii) to the allowance of such credit or the making of such refund, and

“(ii) the amount of tax taken into account under subparagraph (A) shall be reduced by the amount of such credit or refund.”.

(b) Conforming amendments.—

(1) Paragraph (2) of section 6416(b) of such Code is amended—

(A) by inserting “or 4061” after “under section 4051”, and

(B) by adding at the end the following: “In the case of the tax imposed by section 4061, subparagraphs (B), (C), (D), and (E) shall not apply.”.

(2) The table of subchapters for chapter 31 of such Code is amended by adding at the end the following new item:

(c) Effective date.—The amendments made by this section shall apply to sales (and leases and uses treated as sales) after December 31, 2012.