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ACA's Medical Device Excise Tax Meets a Two-Year Suspension

by DMA Staff | Jan 28, 2016
ACA's Medical Device Excise Tax Meets a Two-Year Suspension

Beginning January 1, 2016, the federal excise tax on medical devices (the “medical device excise tax” or “MDET”) has been suspended for a period of two years, until the end of 2017. 

Since its inception as part of the Patient Protection and Affordable Care Act (ACA), and its effective date of January 1, 2013, the medical device excise tax has been extremely unpopular with medical device manufacturers and importers. During its first two years, the tax was projected to bring $20 billion in additional taxes; however, in 2014, the last year for which statistics are available, the tax was realizing only 75 percent of the expected tax. In December 2015, Congress enacted, and the president signed, the Consolidated Appropriations Act, which included the suspension of the tax. As a result, former medical device excise taxpayers need not pay additional taxes attributable to the suspension period.

Taxpayers may still be held responsible for tax that should have been paid during 2015–2016. Just as importantly, they may realize refunds for overpayments that may have arisen after quarterly reporting. For these reasons, the suspension period may provide the optimal time for testing the efficiency of your MDET compliance. For interested taxpayers, DMA offers a revolutionary MDET software solution that offers diagnostic and reverse audit services to assure proper compliance and identify refund opportunities.    

Please do not hesitate to contact your local DMA office should you have specific questions or requests.