Medical Device Excise Tax Moratorium Expires This Year!

This is one of the Affordable Care Act (ObamaCare) provisions that just does not make sense. Does anyone really believe that manufacturers are NOT going to pass this 2.3% tax on medical devices on to consumers? The Consolidated Appropriations Act, 2016 (Pub. L. 114-113), signed into law on Dec. 18, 2015, included a two year moratorium on the medical device excise tax. That moratorium ends December 31, 2017.

Bills have been introduced in both the House of Representatives (HR 184) and Senate (S 108) to repeal this provision of the Affordable Care Act (ObanmaCare). Really, who is normally buying, "Durable Medical Equipment"? It is the infirmed, the Senior Citizens, the disabled, the parents of the children with special needs and tragically those facing End-Of-Life needs to improve their comfort. Ultimately who is going to pay the tax? It is not the manufacturer, it is not the buying power of that huge, "Insurance Pool" that will shell out the cash. It is the least able-bodied, those with the least disposable income that will bear this burden.

The Affordable Care Act remains the law of the land! Until that changes we need to impress on our Members of Congress the fact that the Medical Device Excise Tax must be repealed! Ask your Senators to cosponsor and support S. 108 and ask your U.S. Representative to cosponsor and support HR 184.

A little history of the Medical Device Excise tax:   

Section 4191 of the Internal Revenue Code imposes an excise tax on the sale of certain medical devices by the manufacturer or importer of the device.

On Dec. 5, 2012, the IRS and the Department of the Treasury issued final regulations on the new 2.3-percent medical device excise tax (IRC §4191) that manufacturers and importers began to pay on their sales of certain medical devices starting in 2013. On Dec. 5, 2012, the IRS and the Department of the Treasury also issued Notice 2012-77, which provides interim guidance on certain issues related 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, 2016, and ending on Dec. 31, 2017. See Q & As 21 through 30 for further information related to the two-year moratorium on the medical device excise tax.