2018 Update on the ACA Medical Device Excise Tax

In 2013, as part of the Affordable Care Act, the medical device excise tax imposed a 2.3% tax on the sale, use, or lease of certain medical devices in the United States. This medical device excise tax was one of the several taxes and fees included in the Affordable Care Act to help pay for expanded health insurance.

A two-year delay on the application of the medical device excise tax was imposed in December 2015. Therefore, the excise tax did not apply to sales of taxable medical devices between January 1, 2016 to December 31, 2017. Manufacturers and importers of medical devices sold during this time did not have to make semi-monthly deposits of the excise tax. When the moratorium expired at the end of 2017, it was expected that the tax would become effective for sales beginning January 1, 2018.

However, on January 22, 2018, the moratorium on the medical device excise tax was retroactively extended another two years and will now go into effect on January 1, 2020.

So, what does this mean for you?

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