Taxable Medical Devices
Internal Revenue Service under the section 4191, imposes excise tax on certain medical
devices; a 2.3 percent excise tax on manufacturers, producers and importers of medical
devices.
On Dec. 5, 2012, the IRS issued final regulations on the new 2.3 percent medical
device excise tax that manufacturers and importers will pay on sales of certain
medical devices beginning Jan. 1, 2013. In addition, the IRS issued Notice 2012-77,
which provides interim guidance regarding the determination of sale price and other
issues related to the tax. The tax applies to sales of taxable medical devices after
Dec. 31, 2012.
The medical device excise tax is reported on Form 720, Quarterly Federal Excise Tax Return. Payment is
due with the return. Manufacturers and importers of taxable medical devices may
also pay the tax via Electronic
Federal Tax Payment System (EFTPS). Visit EFTPS to enroll or call 800-555-4477 for information.
Manufacturers and importers of taxable medical devices are generally required to
make semi-monthly deposits of tax. The first semimonthly deposit for the medical
device excise tax, which covers the first 15 days of January, is due Jan. 29, 2012.
In general, manufacturers and importers must use electronic funds transfer to make
excise tax deposits through EFTPS.
Generally, no action is required by individual consumers. Because the tax is imposed
upon the sale of a taxable medical device by the manufacturer or importer, the manufacturer
or importer is responsible for reporting and paying the tax.
Tax Law Change to the Medical Device Excise Tax
The Consolidated Appropriations Act, 2016 (Pub. L. 114-113), signed into law on
Dec. 18, 2015, includes a two year moratorium on the medical device excise tax imposed
by Internal Revenue Code section 4191. Thus, the medical device excise tax does
not apply to the sale of a taxable medical device by the manufacturer, producer,
or importer of the device during the period beginning on Jan. 1, 2020, and ending
on Dec. 31, 2020.
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