Marc Gerson Comments on Proposed Medical Device Excise Tax Regulations in Tax Analysts

"Medical Device Tax Regs Narrow Definition, Create Facts and Circumstances Test"
Tax Analysts

Marc Gerson discusses the proposed medical device excise tax regulations issued by the Treasury Department on February 3, 2012. The regulations adopt a facts and circumstances test for the retail exemption. Gerson said he was encouraged that the Treasury Department acknowledged the challenges that a facts and circumstances test poses for medical device manufacturers. He said he was pleased that the government is open to considering additional factors, examples, or safe harbors.

However, timing will be a significant issue, Gerson said. "Even if they had certainty now, taxpayers would be very pressed to implement the excise tax regime into their processes and systems" in time for the January 1, 2013, effective date, he said. "Hopefully, the Service will consider providing some type of relief in that area."

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