New York State Can Enact $200 Million Tax on Opioid Industry, Court Rules

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New York State Can Enact $200 Million Tax on Opioid Industry, Court Rules
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New York state won court permission to collect $200 million from the makers and distributors of opioid painkillers to help combat the costs of opioid addiction

A federal judge in 2018 struck down the law, known asciting the unconstitutionality of a provision that would have prevented companies from passing on the surcharge to customers in New York.

In its ruling Monday, the Second U.S. Circuit Court of Appeals reversed the decision, finding the payments are a legal tax that New York can collect. The court didn’t reach a conclusion on whether the tax could be passed on to customers, because New York didn’t appeal that issue and has since created a new tax without that provision that captures sales from 2019 onward.

The original New York law planned to collect $100 million a year for six years starting in 2017, with the amounts owed by each company decided by market share. Monday’s decision clears the way for the 2017 and 2018 payments to be imposed.

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