Sales of Certain Medical Devices Now Subject To The Medical Device Excise Tax


Effective January 1, 2013, manufacturers, importers and producers of certain medical devices are subject to an excise tax equal to 2.3 percent of the price at which the medical device is sold. You should note that this excise tax is not imposed on the consumer, but instead imposed on a manufacturer, importer and producer of medical devices subject to the tax. There are certain exemptions to the excise tax that may be available, including medical devices sold for further manufacture and medical devices that can be purchased by the general public at retail. A filing obligation is also imposed on the manufacturer, importer and producer of a medical device subject to the excise tax.

The medical device excise tax was imposed as part of the Patient Protection and Affordable Care Act and is codified at Section 4191 of the Internal Revenue Code. Recently, the U.S. Internal Revenue Service and Department of Treasury issued final regulations providing additional guidance with respect to the excise tax and available exemptions.

IRS Circular 230 Notice
Internal Revenue Service regulations state that only a formal opinion that meets specific requirements can be used to avoid tax penalties. Any tax advice in this communication is not intended or written to be used, and cannot be used by a taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer, because it does not meet the requirements of a formal opinion.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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