The Medical Imaging and Technology Alliance (MITA) appealed to the Internal Revenue Service (IRS) at a May 16 hearing on proposed medical device excise tax regulations imposed by the Patient Protection and Affordable Care Act.
MITA has also submitted comments to the IRS on the proposed regulations, which are slated to go into effect in 2013.
The 2.3% tax will be levied on the sale of medical devices, including new medical imaging technologies fundamental to the diagnosis and treatment of disease, MITA said. The tax poses significant challenges for manufacturers, particularly global companies with production and distribution facilities located in the U.S. and overseas, the group claimed.
In a comment letter submitted to the IRS on May 7, MITA offered the following suggestions:
- Clarify the taxable manufacturer
- Provide an option for a single reporting entity for the U.S. corporate group
- Streamline registration for intragroup exempt sales
- Clarify that service contracts and replacement components are not taxable
- Clarify that software upgrades are not taxable
- Clarify that refurbished products are not taxable
- Ensure that the tax is prospective as Congress intended and would apply only to sales and leases entered into after December 31, 2012
- Provide transition relief for the first three quarters of 2013, due to administrative challenges faced by medical device manufacturers to prepare for implementation of the new tax
