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Excise Tax on Medical Devices

Beginning January 1, 2013 a 2.3% excise tax on the sale price of taxable medical devices is imposed on the manufacturer, producer, or importer of the device. A taxable medical device is any device defined in Sec. 201(h) of the Federal Food, Drug, and Cosmetic Act (FFDCA) that is intended for humans. A device would include an instrument, apparatus, implement, machine, contrivance, implant, or similar device.

A taxable medical device does not include eyeglasses, contact lenses, hearing aids, or any other medical device purchased by the public for individual use. This retail exemption also applies to devices that are regularly available for purchase by individuals who are not medical professionals and devices that are not intended for use by a medical professional or at a medical institution. Individual consumers will not be taxed.

Certain sales are also exempt from the tax at the manufacturer level. If the purchaser buys the device for future manufacture, for resale to a second purchaser, for export, or for resale to a second purchaser for export, the manufacturer, producer or importer is exempt from paying the tax.

Additional information can be found on the IRS website: