Frequently Asked Questions on Medical Device Excise Tax (Part-II)

Greetings from, in our previous blog we discussed about the Frequently Asked Questions raised by our Medical Device Excise Tax Filers and here, we are posting the second set of questions for your understanding.

Keep reading to enrich your knowledge about Medical Device Excise tax

Q. Are there any special tax deposits to be made for medical device excise tax?

A. In simple words, yes. Semi- monthly deposits will be generated if the liability is exceeding $2,500 for the quarter. The first deposit for the calendar year on the device tax covering the first 15 days of Jan, was supposed to be due by Jan 29.

Q. Has IRS issued any guidance on the Medical Device Excise Tax?

Yes, the IRS and the Treasury Department issued final regulations on Dec. 5 2013 and issued Notice 2012-77 to provide interim guidance on certain issues related to the medical device excise tax.

Q. What are Taxable Medical Device?

Taxable devices are the devices that are listed with the Food and Drug Administration under section 510(j) of the Federal Food, Drug, and Cosmetic Act and 21 CFR Part 807. However, if the device falls within an exemption from the tax are known as retail exemption.

Q. Are there any exemptions to report Medical Device Excise Tax?

Yes, there is a specific statutory exemption for eyeglasses, contact lenses, and hearing aids. This exemption also applies for other devices, which are generally purchased by the public at retail for individual use.

Q. On what basis, does a manufacturer determine if a particular device qualifies for retail exemption?

The regulation provides facts and circumstances approach to determine whether the device meets the retail exemption. There are regulations enumerated on the factors that seem to be relevant, however, there would be additional factors other than what are mentioned.

The determination is evaluated on the overall balance of the factors relevant to a particular type of device. In addition, these regulations would provide a safe harbor for certain devices that will be considered to be a part that falls under retail exemption.

Q. Do these regulations illustrate retail exemption facts and circumstances that need to be applied?

Yes, the regulations do include examples. Non-sterile absorbent tipped applicators, adhesive bandages, snakebite suction kits, denture adhesives, mechanical and powered wheelchairs, portable oxygen concentrators, and therapeutic AC powered adjustable home use beds are devices that fall within the retail exemption. Although, these are some examples provided in the regulation, which includes mobile x-ray systems, non-absorb able silk sutures, and nuclear magnetic resonance imaging systems are not devices that fall within the retail exemption.

Q. Are there any circumstances under which a taxable medical device can be sold tax-free?

Well, you can. If the manufacturer or the importer of the taxable medical device may in certain circumstances sell a taxable medical device tax-free to a purchaser for further manufacture (or for resale by the purchaser to a second purchaser for further manufacture), or for export (or for resale for export). However, it is important that both the parties should be registered with IRS. For more details, check through 637 Registration Program for in-depth understanding.

Q. I’m not familiar with manufacturers excise taxes. Where can I learn more?

A20. For more information about manufacturers excise taxes in general, see Chapter 5 of IRS Publication 510.

Well, these were some basic questions on Medical device excise tax, however, if you have any other questions related the topic, do call us @ 866-245–3918 or simply shoot an Email to We exist to serve you, provide you the finest.