On February 3, 2012, the Internal Revenue Service (IRS) and Department of the Treasury (Treasury) released a Notice of Proposed Rulemaking (NPRM) on the 2.3 percent excise tax imposed on the sale of certain medical devices, enacted by the Health Care and Education Reconciliation Act of 2010 (HCERA) in conjunction with the Patient Protection and Affordable Care Act (ACA), under section 4191 of the Internal Revenue Code (IRC).
The proposal excludes O&P from the tax under the retail exemption. Further, under the safe harbor, “prosthetic and orthotic devices” and “therapeutic shoes” are a few of the mentioned types of devices that would also fall within the retail exemption. The definitions for these three categories are defined by the Code of Federal Regulations (CFR) at 42 CFR 414.202 and 42 CFR 414.228(c), respectively.
The IRS is seeking written or electronic comments to this proposed regulation, which must be received by May 7, 2012.