UPDATE: The Medical Device Tax was REPEALED with the 2020 Federal budget agreement passed by Congress on December 17th. The President is expected to sign this legislation.

UPDATE: The Medical Device Tax was REPEALED with the 2020 Federal budget agreement passed by Congress on December 17th. The President is expected to sign this legislation.

Medical Device Tax Expires 12/31/2019
Rödl & Partner Tax Matters Vol 2019 – 7, published in November 2019

Businesses importing or manufacturing certain medical devices will be subject to a 2.3% excise tax on gross sales effective January 1, 2020.

The unpopular excise tax initiated as a revenue raiser from the Affordable Care Act in 2013. The tax was placed on a moratorium that initially expired at the end of 2017 until it was extended for two additional years at the end of that year.

Without Congressional action, the current moratorium will expire at the end of 2019. Despite heavy lobbying, the current landscape does not see a further extension in the near future. Businesses that import or manufacture medical devices should consider the impact of this tax on their pricing and costs effective January 1, 2020. If you are not certain how your business may be impacted by the tax, please refer to your Rödl & Partner advisor.

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