IRS Issues Final Rule Implementing Medical Device Excise Tax

The Internal Revenue Service released a

implementing a Patient Protection and Affordable Care Act provision that imposes on certain medical devices made after 2012 an excise tax equal to 2.3% of their sales price. In submitted on the proposed rule AHRMM, the American Hospital Association and others urged the IRS to explicitly prohibit device companies from passing the tax on to customers, and to clarify that hospitals and other healthcare providers who package and sterilize devices for use in surgery kits should not be treated as device manufacturers or importers under the rule. The final rule does not address AHRMM’s recommendation that manufacturers certify that the tax has not been passed on to customers, but provides that current rules apply in determining the sales price of items. Also, of importance, the final rule states that a kit produced by a hospital or medical institution for its own use would not be a taxable medical device.

Related Resources

e-Learning
The fundamentals of health care supply chain management are the glue that holds the entire health care organization together. Whether you are new or…
On-Demand Educational Webinars
Consider how the four emerging themes on purchased services and their leading practices can deliver improved margins.
e-Learning
Updated for 2020! Begin your studies of the Supply Chain Management and Finance relationship portion within the CMRP examination with a new…
On-Demand Educational Webinars
Health care supply chain leaders discuss methods to reduce the impact of demand surges and supply shortages due to unexpected events. A three-part…
Press Releases
CHICAGO, July 23, 2020 — In partnership with the Association for Health Care Resource & Materials Management (AHRMM) of the American Hospital A