Medical device tax timeline 'burdensome' for radiology vendors
The Internal Revenue Service has released final regulations on the 2.3 percent medical device tax manufacturers and importers will pay on certain devices starting January 1, 2013.
According to the IRS, manufacturers and importers of taxable medical devices will generally be required to make semi-monthly tax deposits, which means the first deposit, which will cover the first 15 days of January, is due January 29.
The short time frame--27 days from which the rule was issued until the day the tax takes effect--has device companies apprehensive.
"Because the final rule has come out today, there's a heavy compliance burden on our member companies and the shortness of time between this final rule and when the tax goes into effect Jan. 1 is pretty burdensome," David Cooling, director of state and federal policy with the Medical Imaging & Technology Alliance told DOTmed News. "Companies have to determine what products are taxed, have to update their compliance software [and] have to train people on collecting the tax."
The IRS has included a provision in its Notice 2012-77 that acknowledges that some medical device manufacturers are still preparing their systems to comply with the new excise tax and may have trouble meeting the deposit deadlines.
According to the notice, the IRS and the U.S. Treasure Department have decided to provide temporary relief from the deposit penalty for the first three calendar quarters of 2013, "[i]n consideration of the short time frame between the effective date of the tax and the due date of the first deposit, and in the interest of sound tax administration."
Cooling told DOTmed News that MITA is still analyzing the new IRS rules to determine what they mean for both manufacturers and consumers. "As you know it's complex, so we want to make sure we get everything right," he said.
Industry groups urge Congress to delay device tax
IRS pays little mind to industry feedback in final device tax regs
Device-makers urge Senate to repeal 2.3% tax; GlySure raises $13.6M for glucose monitors