The Affordable Care Act (ACA) imposed a 2.3 percent excise tax
on the sale of certain medical devices by the manufacturer or
importer of the device. Under the ACA, the excise tax was effective
for the sale of medical devices after December 31, 2012. The tax is
now under a two-year moratorium.
Medical Devices
The IRS has issued rules and regulations that describe what
constitutes a taxable medical device. The references are geared to
language in the federal Food and Drug Act. For individuals, it is
important to remember that many consumer medical devices are
excluded from the tax. Expressly excluded under the ACA are
eyeglasses, contact lenses and hearing aids. IRS rules and
regulations also create a "retail exemption" for medical
devices that are commonly purchased by consumers. These include
items such as crutches, bandages, wheelchairs and portable oxygen
machines.
