Possible Revival of US Medical Device Excise Tax

In 2013, Congress passed the Medical Device Excise Tax (MDET). It applied (at the rate of 2.3%) on the first sale of qualifying medical devices in the United States by manufacturers or importers. The MDET was the closest thing to a federal-level sales tax in the United States.

The Consolidated Appropriations Act of 2016 contained a “Moratorium on Medical Device Excise Tax” which suspended the MDET from January 1, 2016 through December 31, 2017. This means the MDET is slated to return on January 1, 2018 absent any further legislative action.

The revival of MDET might only be short-lived or might not even happen. Federal legislation was recently introduced on December 12, 2017, which provides for another temporary moratorium on the MDET, reportedly for five years.   Sovos recommends Tax Managers closely monitor the possible return of the MDET on January 1, 2018 and the legislative effort to continue to suspend the MDET.

Author

Yujin Weng

Yujin Weng is Manager of Regulatory Analysis & Design at Sovos. She leads a team of attorneys that focus on global VAT determination, leveraging her ten-plus years’ experience with indirect taxes at Sovos. Yujin is a member of the Massachusetts and New York Bars, has a J.D. cum laude from Boston University School of Law, an M.A. from Syracuse University, and a B.A. from Nanjing University (China). She is fluent in Chinese.
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