Phillip Brown

On Jan. 1, 2013, the medical device excise tax (MDET) became effective for many manufacturers of medical devices as required by Section 4191 of the Internal Revenue Code. Recent guidance suggests that the view of the U.S. Department of Treasury is that it doesn’t care when the devices were manufactured—even prior to Dec. 31, 2012. As far as the tax goes, the date of sale determines when the application of the tax takes effect. The significance to medical device manufacturers is that prior inventories and production builds on the books as of December 2012 are not exempt from the tax. If you sold a product after Dec. 31, 2012, it is taxable.