Final Regulation Published
The Internal Revenue Service (IRS) issued final regulations to
implement the medical device excise tax that takes effect Jan. 1,
2013. As part of the funding for the Affordable Care Act, Congress
included a 2.3 percent excise tax on the sale of medical devices by
the manufacturer, producer or importer of a medical device. The tax
is calculated based on gross sales. It is anticipated that the tax
will raise $29 billion over 10 years. The statute included explicit
exemptions for eyeglasses, contact lenses and hearing aids and also
exempts devices purchased by the general public at retail for
individual use. Proposed regulations were issued by the IRS
concerning how the excise tax would be applied in February
(REG-113770-10). The IRS also held a hearing on May 16, 2012, after
the comment period had closed. The final rule does request further
comment on several issues.
