Tax & Accounting Blog

DID YOU MISS THE FIRST MEDICAL DEVICE EXCISE TAX SEMI-MONTHLY DEPOSIT?

Indirect Tax, ONESOURCE, Sales and Use Tax February 8, 2013

INDIRECT_TAX_MDET_CSThe new Medical Device Excise Tax went into effect on January 1, 2013.  The tax applies to sales of taxable medical devices by the manufacturer or importer and is reported on Form 720.  Form 720 is also where the Indoor Tanning Services Tax (aka “Snookie Tax”) is reported.

Form 720 is filed quarterly and the first return to report the medical device excise tax is due by April 30, 2013.  It is nice to think that you have some time to get adjusted to the new tax until you read a bit further and find out that semi-monthly deposits may be required if tax liability exceeds $2,500 for the quarter.  The first deposit snuck up fast and was due on January 29, 2013 which covered the first 15 days of January.  Don’t fret too much if you missed the payment.  The IRS is allowing for transition relief from deposit penalties during the first three quarters of this year as explained in Notice 2012-77.

IRS Notice 2012-77          
http://www.irs.gov/pub/irs-drop/n-12-77.pdf     
IRS Medical Device Excise Tax: Frequently Asked Questions 
http://www.irs.gov/uac/Medical-Device-Excise-Tax:-Frequently-Asked-Questions