The Patient Protection and Affordable Care Act imposes an excise tax of 2.3 percent on the sale of certain medical devices. Recently the IRS issued TD 9604 (here) which spell out more of the guidelines for the MDET.
We recommend that you consult with a tax professional on how (or if) this new regulation may apply to your company.
Some users of Sage 100 ERP (formerly known as MAS90 or MAS200) have asked how to best change their software to account to capture any required excise tax.
One solution which is on the horizon is from Avalara who is a provider of integrated sales tax computation and reporting services. Their solution integrates to Sage 100 ERP and computes taxes during the order entry and invoicing process. They also offer tax reporting and filing services to help make the process manageable.
We want to update you on the next release of AvaTax Calc, which includes changes to the AvaTax WSDL (Web Services Definition Language), enhancements to the user interface and support of the new Federal Medical Device Excise Tax. The AvaTax Calc SDK-DEV environment will be updated on December 12, 2012 from 5:00-9:00pm and to the production environment on December 27, 2012 from 5:00-9:00pm. These enhancements will not affect your product usage or ability to access AvaTax Calc.
Medical Device Excise Tax
We have updated AvaTax Calc to support the Federal Medical Device Excise Tax (MDET) going into effect as part of the Health Care and Education Reconciliation Act of 2010 in January 2013. In support of this, AvaTax Calc will allow you to calculate medical device excise taxes and generate a report to file the appropriate federal IRS tax forms.
We are introducing a new report and two new Entity Use Codes. The Entity Use Codes, used in combination with a Tax Code, will support the proper tax calculation.
Federal excise tax summary report
MED1 – calculates excise tax only (exempt sales and seller’s use tax)
MED2 – calculates excise tax in addition to sales and seller’s use tax (taxable sales and seller’s use)