Tax, Benefits and Nonprofit Organizations Client Alert: Treasury Issues Binding Guidance on Medical Device Excise Tax

    View Authors 10 December 2012

    The Department of the Treasury and the Internal Revenue Service (IRS) published in the December 7, 2012 Federal Register final regulations and released other interim guidance on the implementation of the new excise tax on medical devices. The IRS also posted FAQs on the new excise tax. Effective January 1, 2013, section 4191 of the Internal Revenue Code imposes on manufacturers and importers of taxable medical devices a tax equal to 2.3 percent of the “price” at which a taxable medical device is sold. Congress provided exemptions for eyeglasses, hearing aids, contact lenses and “any other medical device determined … to be of a type which is generally purchased by the general public at retail for individual use” (the “retail exemption”).