Medical Device Excise Tax Takes Effect
The 2.3 percent medical device excise tax is now a reality.
The “fiscal cliff” legislation passed by Congress in an extraordinary New Year’s Day session did not include a repeal of the measure, which had been fiercely opposed by the medical device industry. The tax, which went into effect on Jan. 1, 2013, is on the sale of certain medical devices by the manufacturer, producer, or importer of the device, and it is intended to help pay for the Affordable Care Act. Manufacturers say the tax will force them to cut jobs.
Opponents of the tax say they’ve not given up the fight to kill the tax.
“The effort to repeal the medical device tax will continue,” said Stephen J. Ubl, president and CEO of AdvaMed, an association for medical device companies. “The passage of a scaled-back fiscal cliff package that did not address the medical device tax does not diminish the need to repeal the tax.”
Ubl said the fiscal cliff deal also include cuts to imaging and diabetes-related services. “We believe these cuts will hurt access to important technologies that Medicare beneficiaries depend upon,” he said in a prepared statement.
The medical device excise tax does not apply to sales of items such as eyeglasses and hearing aids that are purchased by the general public for individual use.
According to the IRS, the excise tax is reported on Form 720, Quarterly Federal Excise Tax Return. The payment is due with the return. The first quarterly return for the tax is due April 30, 2013 for the month of January, February, and March.
More IRS information about the tax can be found at: http://www.irs.gov/uac/Newsroom/Medical-Device-Excise-Tax
Posted: January 2, 2013