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nitrogen wrote:My initial bet is that they probably screwed up on the item category in their register system, mislabeling what tax it should be under.

http://www.irs.gov/uac/Medical-Device-E ... -Questions
Q4. Who is responsible for reporting and paying the medical device excise tax?

A4. Generally, the manufacturer or importer of a taxable medical device is responsible for filing Form 720, Quarterly Federal Excise Tax Return, and paying the tax to the IRS.

Q5. Will individual consumers be subject to any reporting or recordkeeping requirements?

A5. Generally, no action is required by individual consumers. Because the tax is imposed upon the sale of a taxable medical device by the manufacturer or importer, the manufacturer or importer is responsible for reporting and paying the tax.

Q6. Who is the manufacturer for purposes of the medical device excise tax?

A6. Generally, with regard to the medical device excise tax, the manufacturer is the person who produces a taxable medical device from scrap, salvage or junk material, or from new or raw material, by processing, manipulating or changing the form of a device or by combining or assembling two or more devices.

Q7. Who is the importer for purposes of the medical device excise tax?

A7. Generally, with regard to the medical device excise tax, the importer of a taxable medical device is the person who brings the device into the United States from a source outside the United States, or withdraws the device from a customs-bonded warehouse for sale or use in the United States.

RoyGBiv wrote:I'm pretty confused why a line-item tax would ever be presented to the end user... I was under the impression (apparently mistaken) that the tax was to be paid by the manufacturer or importer upon initial sale into the distribution channel. The only way an end retail buyer would be subject to the tax is if every entity in between the maker/importer and the end buyer was holding/forwarding the good "on consignment" for the maker/importer. The maker/importer consigns the goods to the distributor and the distributor consigns to the retailer (simplified)... etc. so that the first "payment" or "purchase" is at the retail location... This is NOT my understanding of how the world works..

texanjoker wrote:Very interested in this...I wonder if some new NObama care tax quietly went into effect Jan 1

Internal Revenue Code – Section 4191
Sec. 4191. Medical devices

-STATUTE-

(a) In general There is hereby imposed on the sale of any taxable medical device by the manufacturer, producer, or importer a tax equal to 2.3 percent of the price for which so sold.
(b) Taxable medical device For purposes of this section -
(1) In general The term "taxable medical device" means any device (as defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act) intended for humans.
(2) Exemptions Such term shall not include -
(A) eyeglasses,
(B) contact lenses,
(C) hearing aids, and
(D) any other medical device determined by the Secretary to be of a type which is generally purchased by the general public at retail for individual use.

-SOURCE-

(Added Pub. L. 111-152, title I, Sec. 1405(a)(1), Mar. 30, 2010, 124 Stat. 1064.)

-REFTEXT-

REFERENCES IN TEXT

Section 201(h) of the Federal Food, Drug, and Cosmetic Act, referred to in subsec. (b)(1), is classified to section 321(h) of Title 21, Food and Drugs.

-MISC1-

PRIOR PROVISIONS

For prior sections 4191, 4192, 4201, and 4211, see Prior Provisions note set out preceding this section.


EFFECTIVE DATE

Pub. L. 111-152, title I, Sec. 1405(c), Mar. 30, 2010, 124 Stat.
1065, provided that: "The amendments made by this section [enacting this section and amending sections 4221 and 6416 of this title] shall apply to sales after December 31, 2012."

chasfm11 wrote:

RoyGBiv wrote:I'm pretty confused why a line-item tax would ever be presented to the end user... I was under the impression (apparently mistaken) that the tax was to be paid by the manufacturer or importer upon initial sale into the distribution channel. The only way an end retail buyer would be subject to the tax is if every entity in between the maker/importer and the end buyer was holding/forwarding the good "on consignment" for the maker/importer. The maker/importer consigns the goods to the distributor and the distributor consigns to the retailer (simplified)... etc. so that the first "payment" or "purchase" is at the retail location... This is NOT my understanding of how the world works..

The answer is likely very simple. Computer programmers (the ones responsible for making sure that the point of sale (POS) terminal performs correctly) are often left in limbo about specifics. Typically, there would be a business analyst who should be in touch with a tax law specialist about how the programming is to be done and a detailed list of requirements and maybe even "use cases" (specific scenarios to test whether the requirements have been met) are provided. Given the maze of new regulations and taxes that kicked in on January 1st, it isn't surprising to me that one or more programmers didn't get the detailed information needed and have been left to interpret the laws on their own. More than half the time when that happens, the programming doesn't follow the law.

About 80% of the buying public apparently trusts whatever the POS machine spits out to be correct. As one who developed POS solutions in my business career, I can tell you that the trust is sometimes unwarranted.

We would all do well to verify every purchase. I suspect that errors will abound.

geekwagun wrote:

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dave_in_austin wrote:I purchased some reloading supplies and other stuff at Cabella's in Buda yesterday and I noticed on the receipt that they have charged a 2.3% medical excise tax on the merchandise total. Has anybody else seen this anywhere? As far as i can tell from reading the IRS publications, they should not be doing this as what they sell should not fall under section 510(j) FDA rules as medical devices and even if does, it should be exempted under the retail sale rule.

(2) Exemptions
Such term shall not include -
(A) eyeglasses,
(B) contact lenses,
(C) hearing aids, and
(D) any other medical device determined by the Secretary to be of a type which is generally purchased by the general public at retail for individual use.