Warren Rogers Addresses the New Excise Tax
There have been few editorials on the Medical Device Excise Tax (MDT) in dental publications this year. However, there has been a great deal of behind-the-scene activities attempting to have the dental devices exempted from the tax, or repealed entirely.
The new Federal tax (2.3%) is an instrument of the current administrations funding for the Patient Protection and Affordable Care Act, sometimes referred to as "Obama care". Although eyeglasses, contact lenses and hearing aids are exempt, dental devices are subject to the tax.
In my role this year as President of the National Association of Dental Laboratories (NADL), we have worked hard on behalf of our dentist community to seek repeal of the tax. Both the NADL and ADA, along with several other allied dental organizations in a coalition, have presented to the IRS on the inequitable elements to the tax as it relates to the dental industry. Unfortunately, the IRS denied our request for dental device exemption in a public hearing in June 2012.
After strong efforts by ADA, state dental associations and the Dental Trade Alliance, the US House of Representatives passed House Resolution HR 436, which would repeal the medical device excise tax, by a vote of 270-146 in June 2012. Unfortunately, the US Senate has not taken up the bill and it does not appear that there will be enough votes to force a hearing.
Effectively, Knight will comply with this statute and start collecting a 2.3% Federal tax on all sales of dental devices after December 31, 2012. The tax will be visible on future invoices as "Medical Devise Excise Tax".
Depending on the outcome of the November 6th elections, and if a new republican administration is installed, there could be a repeal of the bill in its entirety and therefore an end to the tax.
If you have any questions relative to the above, I would encourage you to contact your local state association's regulatory branch to learn more about the tax and other Federal initiatives such as the Physicians Payment Sunshine Act.
Warren H. Rogers