New Medical Excise Tax Could Benefit O&P Industry

The Internal Revenue Service and the Department of Treasury have posted the first proposed rules on the plans for the enforcement of the new Medical Device Excise Tax. This is the first step in establishing the final interpretation of the applicable rules, and it is available for public comment.

According to a statement from the American Orthotic & Prosthetic Association, the text that has been published is likely to benefit the O&P industry. Under the new rule, an exemption applies to devices “of a type generally purchased by the general public at retail for individual use.” AOPA representatives worked with the IRS and the Treasury to establish that O&P devices fit into this category.

“Some further analysis will be required of all the specific sections of law and rules cited, but we can say very tentatively that it appears that the Department of Treasury/IRS has carved out a safe harbor for O&P devices as falling under the retail exemption — as AOPA has requested last February — and so the be exempt from the tax,” AOPA said in the statement.

The target deadline to submit comments is May 7. AOPA is planning to solicit comments, as well as give testimony at a May 16 hearing, and it advises AOPA members to also submit individual comments.

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