Dental Trade Alliance (DTA) monitors legislation and addresses pressing issues on Capitol Hill that affect the dental trade. DTA member companies are actively involved in meeting with members of Congress in their own districts and visiting Washington DC once a year at the DTA Washington Conference to speak with their representatives on Capitol Hill.
Physicians Payment Sunshine Act (PPSA)
The Physicians Payment Sunshine Act (PPSA), a provision of The Patient Protection and Affordable Care Act, requires medical device manufacturers to report payments or transfers of value to dentists that exceed $10. While dentists are covered under the definition of physician, only about 25 percent of dentists participate in CMS programs. According to CMS, in its National Health Expenditures report, total expenditures for dental services in Medicare and Medicaid programs covered by this provision totaled $7.98 billion in 2013. That amounts to less than one percent of total expenditures for these programs. Equipment and supply costs in dental practices (which translate into the dental industry share) amount to less than 8 percent of the total practice income according to the American Dental Association. In general we believe that the burden of reporting costs for dental manufacturers far exceeds any intended benefit of transparency in relationships with providers. Position: DTA urges Congress to amend the Physician Payments Sunshine Act (PPSA) to increase the threshold for reporting from every $10 transaction to $200 and eliminate the requirement to aggregate payments.
Medical Device Excise Tax
The Dental Trade Alliance opposes the medical device excise tax because it disproportionately affects dental companies. The Congressional Joint Committee on Taxation estimated that the medical device tax on dental would be $80 million in 2014. In addition, because the tax is applied to sales instead of profits, application of the excise tax is equivalent to increasing the corporate income tax rate above 50 percent for many companies. The tax is totally disproportionate to the revenues and profits generated by the dental device market from the legislation. In fact, the tax is almost 40 times the benefit to the industry. Position: While the two year suspension was a good first step, DTA urges Congress to repeal the tax.
Medical Device Excise Tax Suspended: The Medical Device Excise Tax is suspended for sales in 2016 and 2017.
Research and Experimentation Credit Made Permanent: For taxable years beginning after 2015, the credit is modified to allow an eligible small business (as defined in section 38(c)(5)(C)) to claim the credit against both its regular tax and alternative minimum tax (AMT) liabilities. Beginning in 2016, certain small businesses also may claim the credit against the employer portion of their payroll tax liability, rather than against their income tax liability.
Increased Expensing Limits Under Section 179 Made Permanent: The increased expensing limit and phase-out threshold under section 179, $500,000 and $2 million, are now permanent. Those amounts had fallen to $25,000 and $200,000, respectively. Additionally, the extension bill permanently allows taxpayers to expense off-the-shelf computer software and qualified real property (i.e., qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property) under section 179, provisions that also lapsed at the end of 2014.
Bonus Depreciation For Qualified Property: The act extends bonus depreciation for qualified property placed in service over the next five years, subject to a phase-out schedule:
- 50 percent bonus depreciation in 2015, 2016, and 2017
- 40 percent in 2018
- 30 percent in 2019
After 2015, the bill allows bonus depreciation to be claimed on qualified improvement property regardless of whether the property is subject to a lease, and removes the requirement that an improvement be placed in service more than three years after the building was placed in service.