Taxable Medical Devices
Internal Revenue Service, under section 4191, imposes an 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 specific 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 enrol, 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 semi-monthly deposit for the medical device excise tax, which covers the first 15 days of January, is due Jan. 29, 2012. 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.
E-file Form 720 for Taxable Medical Devices at TaxExcise.com
TaxExcise.com offers you a convenient online platform to e-file form 720 online directly to the IRS. You can complete your form 720 e-filing in a few steps in just a few seconds and get the proper acknowledgment of your tax payment from the IRS to your registered email ID. You will not face any complications while e-filing federal excise taxes at TaxExcise.com. You simply choose the taxable medical devices category in our application and e-file form 720 smoothly. Please contact our customer support desk if you run into any obstacles in your form 720 e-filing steps. They will assist you in your process and ensure smooth form 720 e-filing at TaxExcise.com.
FAQs
What is the Form 720 medical devices tax?
Section 4191 of the Internal Revenue Code imposes an excise tax on the sale of specific medical devices by the manufacturer or importer. The concerned taxpayers should report and pay the taxes for the medical devices using the federal excise tax form 720 every quarter of the tax year.
What is a taxable medical device?
A taxable medical device is a device that is listed as a device with the Food and Drug Administration under section 510(j) of the Federal Food, Drug, and Cosmetic Act and 21 CFR part 807 unless the device falls within an exemption from the tax, such as the retail exemption.
How much tax should I pay for my taxable medical devices?
The manufacturer and importer should pay 2.3 percent of the sale price of the taxable medical device as a federal excise tax to the IRS using the quarterly federal excise tax form 720.
Are there any tax deposits required for form 720 medical devices tax?
Semi-monthly deposits will be required if tax liability exceeds $2,500 for the quarter. The first deposit of the medical device excise tax, covering the first 15 days of January 2013, will be due on Jan. 29, 2013. Notice 2012-77PDF provides transition relief from deposit penalties during the first three calendar quarters of 2013.
What are all the exemptions to the medical devices excise tax?
There are specific statutory exemptions for eyeglasses, contact lenses, and hearing aids. There is also an exemption for other devices that are of a type that are generally purchased by the general public at retail for individual use.