Further Clarification Needed to Comply on Medical Device Tax

Devicemakers have been doing their best to comply with the government’s 2.3% medical device excise tax, which took effect in January, but many aspects of the law are still unclear, AdvaMed says in a recent letter to the IRS.

For example, the group says, it is unreasonable to require manufacturers to obtain a purchaser statement listing each device sold tax-free for export or as a component to be used in further manufacture in order to exempt these devices from the tax.

“It is extremely burdensome for each manufacturer, some of which regularly sell hundreds or thousands of different device products to thousands of purchasers, to obtain statements from purchasers” of this sort, AdvaMed President and CEO Stephen Ubl writes.

Instead, the association recommends that the IRS accept an annual statement from each purchaser swearing its intention to buy a certain amount of product from a given device maker for export or use in further manufacturing. The manufacturer would be liable for the tax if the purchaser did not prove the items were exported or used within six months.

AdvaMed also continues to object to the IRS’s constructive price rules, saying they pose a significant administrative burden and require information manufacturers and importers may not have.

Want to learn more? Don’t worry if you missed the original event – the video and transcript is available. Medical Device Excise Tax: Practical Answers to Eligibility, Exemptions, Pricing and Compliance Tax Answers for Non-Tax Professionals. Figure out what your obligations are under the new healthcare law. Order your copy.