HME will escape device tax

Thursday, December 6, 2012

WASHINGTON – Most home medical equipment will be excluded from the Affordable Care Act’s medical device excise tax, industry stakeholders say.

The IRS on Dec. 5 issued final regulations for the 2.3% tax, which is scheduled to go into effect Jan. 1. Stakeholders believe the final regulations, unlike previous proposed regulations, are in HME’s favor.

“While AAHomecare continues to examine the impact of the guidance, it appears that the vast majority of home medical equipment devices will not be subject to the tax,” the association stated in a bulletin. 

Stakeholders have fought for the past year to exempt HME from the tax, arguing that it’s a “retail” item like glasses and hearing aids, which have been exempted from the tax from the get-go. 

To meet the IRS’s criteria, “retail” items must be regularly available for purchase and used by individuals who are not medical professionals. Additionally, they can’t be intended for use in a medical institution, office or by a medical professional. 

The IRS will officially publish a final rule in the Dec. 7 Federal Register. View the final regulations here.

See the HME Newswire on Monday for the full story.