Posted in: Health

Obamacare Medical Device Excise Tax Causes Small Business Confusion

Obamacare Medical Device Excise Tax Causes Small Business Confusion

Besides the Fiscal Cliff deal, January 1 also brought the medical device excise tax as part of Obamacare. Based upon the Affordable Care Act, manufacturers, producers, and importers are required to add an extra 2.3 percent manufacturers excise tax levied on the sale of medical devices. But it’s possible the implementation of this new tax may cause some confusion with some small businesses.

Many people supported Obamacare as “free” health care. But now the real price of this dramatic overhaul to America’s health care system is about to be felt by our wallets. According to the Boston Herald, “medical device makers have warned the tax could cost about 43,000 jobs nationwide.”

If you have purchased or installed any medical devices, you’ll probably have noticed an extra little tax added. Unfortunately, it appears that some businesses are not sure how to properly implement the rules generated by the IRS and are accidentally charging customers when they should not be.

Over on Facebook, I ran into one person who was complaining about being charged extra taxes for Obamacare by posting a picture of his receipt:

“OK…. Here comes some of those Obama care taxes on Jan 1, 2013. Soon every purchase you make, there will more taxes. On 103.98 I was charged 8.58 for Texas state taxes. And then Obama care medical tax another 2.39. So the more you spend , the more goes to the ‘so called free Obama care.'”

It wasn’t long before other people noticed that this might have been a mistake. According to Mondaq.com, this sale should have not been taxed extra:

“Items exempt from the tax include eyeglasses, contact lenses, hearing aids and other medical devices determined by the IRS to be generally purchased by the public at retail for individual use.”

Obamacare-Medical

The purchaser then posted this on Facebook:

“Looks like glasses, contacts and hearing aids are exempt from the tax. I’m no tax man but the store told me it was an Obama tax.”

It’s possible that some businesses are taking a “better safe than sorry” approach to implementing this new Obamacare tax. While some medical devices are specifically exempted from extra retail taxation, the guidelines are fairly specific that these new taxes only apply to medical professionals, according to Mondaq.com:

“Devices that are not covered by this safe harbor will be subject to a facts-and-circumstances test to determine if they meet the retail exception. The device must generally satisfy two requirements:

  1. The device is regularly available for purchase and use by individual consumers who are not medical professionals.

  2. The device’s design demonstrates that it is not primarily intended for use in a medical institution or office, or by medical professionals”

What do you think about Obamacare and the new medical device excise tax?

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Comments

39 Responses to “Obamacare Medical Device Excise Tax Causes Small Business Confusion”

  1. Camo Berns

    Obamacare Jan 1st, 2012.

    In the standoff over the fiscal cliff, all the discussion has been about the Bush tax cuts. There has been no discussion about the ObamaCare tax increases. That's a mistake.

    Five of the tax increases Americans will face on January 1 are new taxes created under the Affordable Care Act (ObamaCare). And they are not just for the very rich. Three of the five will hit people who are solidly middle class.

    The new ObamaCare taxes will hit everything from dividends and capital gains to day care and services for special needs children. They will increase the tax bill for those who have extraordinary medical expenses? at the very time when they can least afford to pay higher taxes. They will hike the tax burden for the chronically ill who have several thousand dollars of out-of-pocket prescription drug expenses every year. The taxes will fall on medical devices ranging from pacemakers and artificial hips to bedpans and stents.

    President Obama is the biggest spender of public funds in history, and he has shown absolutely no willingness to make any significant cuts in spending programs. The fiscal cliff, then, offers the GOP the unprecedented opportunity to cut spending, something that is otherwise impossible to do with President Obama through compromise.

    No matter how the fall over the cliff develops, the president will successfully use it to blame Republicans. The average American voter has not yet felt the impact of the ObamaCare tax increases that will be enacted Jan. 1, 2013, whether the cliff fall is averted or not. And more importantly, no matter how Mitt Romney tried to explain the negative effects of Obama's fiscal policies, the electorate voted for Obama. So the GOP needs to abandon the idea that they will be able to convince the electorate that Obama's policies will hurt working Americans.

    To provide all Americans with health insurance, premiums will have to rise to pay for it, Aetna CEO Mark Bertolini told CNBC's "Closing Bell" on Wednesday. Bertolini said that insurance premiums could double in some places just on the basis of what types of policies people buy today. He also said that when Obamacare is fully implemented, it won't start the way people had hoped and it won't be cheaper.

  2. Christopher Schuesler

    where do you get your facts because most of what you said is wrong! He has used the LEAST amount of funbds in AMERICAN HISTORY! This problem ws not created by him in anyway! Corporate profite are at its highest in history FACT Fact home prices have risen for the 1srt time in 10 years Fact No one can be denied health insurance Yes we all may pay more but so what1 fact taxes are all going down except for a pyroll tax increase of 2%. we fought two wars without asking anyone to sacrifice by paying for those wars! FACT the house and COngress blocked EVERY piece of Legislation that Obama wanted to implement to help the Recovery EVERY ONE!! and GOPS ONLY GOAL goal was to make OBAMA a one term president!! ALl verifable FACTS !!

  3. Bob Levine

    Yeah, you can all get Health Insurance because the Govt is funneling all these extra taxes from healthy people. The law doesn't say the Insurance companies will provide it for free though like most ignorant Democraps believe. Big fat illegal aliens will flock here from all corners of the earth.

  4. Kristie L Citraro

    This will raise the cost of medical supplies… NOTHING IS FREE…. Most medical supply companies – are small businesses. So let's see how much of a negative impact this has on our economy.

  5. Camo Berns

    You just had your chance to prove me wrong and you dropped the ball dummy. Judging by your grammar and spelling you must be illiterate and couldn't understand a fact if I were to nail it to your forehead with an Estwing Framing Hammer. Here are my sources beginning with a Forbes link published today dumb dumb:

    http://www.forbes.com/sites/gracemarieturner/2013/01/02/as-2013-begins-get-ready-for-an-obamacare-tax-onslaught/

    PS: Chris, you fell for this Community Organizer Liar hook, line and sinker dummy. It is no surprise you are oblivious to the truth you fool.

  6. David Carroll

    The importer or manufacturer may tack the tax on separately as a cost and the retailer may also recoup that cost from the consumer. States such as Texas have made it possible to pass the tax through in order to show the consumer the percentage of the tax in effect revealing a tax that is already in existence. This is sort of like those graphs at the fuel pump showing the consumer where the costs are going. Instead of showing a wheelchair at say 410 dollars the retailer shows it at 400 with the 10 dollars as a seperate line. Same difference, but with disclosure.

    The cabellas reciept was a point of sale bug.

  7. Curt Drum

    Do you honestly believe that the manufacturer of this equipment will not pass this burden along to the consumer? They are in business to make money and that is what they will continue to do

  8. D-Sue Browning

    The purchase was from cabela's for a ruger pistol attache and a folding 22? This had nothing to do with a medical devise as stated on IRS?

  9. Matt Efsic

    If you look up the UPC codes on the receipt, neither of the items are medical devices (and the tax should have not been applied). The items on the receipt are as follows:

    UPC number 51525400073:
    Butler Creek Stock Stainless Pistol Grip/Folding 10/22 FS10S.

    UPC number 26509274186:
    Ruger Embroidered Attache Case in Tan / Black.

    Cabela's is a sporting goods store and does not sell industrial medical devices and should not be charging this on any of their sales. If you are a customer that has had this tax inappropriately charged, go back and ask the store to be reimbursed.

  10. Jennifer Nash McCreary

    "Some Cabela's customers have since told us that the chain's cash registers did indeed manifest a glitch on 1 January 2013 that improperly imposed the Medical Devise Excise Tax surcharge on non-qualifying merchandise, but the issue has now been corrected and customers who were incorrectly charged can contact Cabela's Customer Service Department and request refunds for the overcharges."

  11. Jennifer Nash McCreary

    "Some Cabela's customers have since told us that the chain's cash registers did indeed manifest a glitch on 1 January 2013 that improperly imposed the Medical Devise Excise Tax surcharge on non-qualifying merchandise, but the issue has now been corrected and customers who were incorrectly charged can contact Cabela's Customer Service Department and request refunds for the overcharges."

  12. Keith Ramsey

    Christopher, you really need to check your facts… half of them are not correct… Home prices have risen for the first time in 10 year??? That definitely isn't a fact. Something needed to be done with the health care system… most everyone agreed on that… but this is gonna be so screwed up and hurt so many of us that it is insane.

  13. Chase Kreznor

    What's wrong with giving illegals free cheese? My ancestors worked 19 hr days to build America on minimum wage and never once asked for a handout. Isn't that fair? Not. It's a shame what this country has come to because of Democrats.

  14. Jett McBride

    Christopher Schuesler dude,financed wars? for what purpose were these wars? heroin,oil,a pipeline,shit that didn't attack me or you? come on man

  15. James Vaughn

    Well my opinion is obama needs to stop taxing some much, People are really have it hard now.I think he should think things over alot better. Instead of basically killing his people. People wake up before it is two late.

  16. Scott Petric

    Where do you get your made up facts from Chris…? http://www.jparsons.net/housingbubble/ housing prices up for the first time in 10 years??? Get off MSNBC and see the real world… do some research on the taxes that you started paying for January 1st due to Odumbercare… do some REAL research.

  17. Scott Petric

    Hey Lita… here's a short version of Business 101… taxes are an expense to a business, just like rent, heat, employee benefits, payroll, electricity, (this could go on for days, you have NO idea)… all these expenses are transferred to the consumer via pricing in the product… it's the only way to balance the books, other than cut this expense since that expense went up… taxes are passed to???? THE CONSUMER… the consumer pays the tax PERIOD….

  18. Scott Petric

    Correct, but to go further… who uses the medical supplies most? Doctors, Hospitals, etc…. the cost of healthcare in general is going up AND the cost of your insurance will follow suit…

  19. Mike Evans

    Taxes only went up on those making OVER 400k and 450K….I don't mind my payroll taxes going up 2%. It goes to Social Security…

  20. Tobie Brown

    You Obama voters just picked my pocket. I will not forget. Don't come through my door looking for a job.

  21. Tobie Brown

    You are mindless zombies! You just got screwed by Obama and you can't believe he could do that to you. Get over it. You were taken for a ride.

  22. Erik Stell

    Hey Christoper! If taxes are going DOWN then PLEASE explain to me why my paycheck is now $54 and some change LESS?!?! Check YOUR facts before you go spouting BS!

  23. Dale Anderson

    Christopher Schuesler, I am glad I do not read, listen to or watch where you get your information from. It is these falsehoods that so many believe that keep the ignorance growing in our nation.. Don't forget that pres obama had full control the first 2 years of his term and there was absolutely nothing the Republicans could do to stop anything. pres obama also submitted a couple of his own budgets and received 0 (ZERO) support. Yes, that would also include the democrat ran senate.

  24. Nathan Grubb

    Have any of you heard shit rolls down hill? Well guess what here it comes. Where do I start? Payroll taxes went up my wages did not! My property taxes go up , my house did not increase in value! My job does not provide insurance and I work for the government , and I can not afford to buy my own insurance, not with out damaging my credit by letting my house or vehicle go back! So let me ask all you so call political savy people out there , what does someone do that makes less than $35000 a year do? Because no one has any anwers , And one more thing who is to blame? I mean really who is? The President? No and much as it pains me to say that! We are to blame, we the people because we let the government have way to much power!

  25. Lita Kelley

    You seem to have a comprehension deficiency. Where, anywhere in the ACTUAL WORDS written, do I suggest anything contrary to this? Markup after the fact is irrelevant to what I stated, and is a separate discussion I didn't comment on, therefore, your conjecture is of your own interpretation, pulled out of your ass, because, you do not know ANYTHING about what I believe. I merely stated that the TAX is not levied directly on the retail level.

  26. Lita Kelley

    @Scott Petric, hey FUCKHEAD, read what I wrote instead of conjuring BULLSHIT. I don't give one flying fuck about your semantics and particulars, you fucking imbecile

  27. Lita Kelley

    Friggen comment on the TAX itself and mindless IDIOTS want to insinuate bullshit that has NOTHING to do with what I said. I said NOTHING ABOUT THE COST OF THE FUCKING PRODUCT, only of the TAX.

  28. Estella Bunny Howe

    Christopher, the typical rants of an ignorant left wing wacko liberal. Do you have a clue about which you speak?? I think not. You should educate yourself before you post!!!

  29. Henry Charles

    I am looking for opinions from individuals that are well educated in the medical device field.
    This 5 minute survey allows you to voice your opinion on the after effects of the medical device tax.
    In order to graduate this May, I must obtain 50+ survey responses, thanks for your participation.

    Below is the link to the survey.

    http://www.instant.ly/s/rX6BN

  30. Costa Rica's Call Center

    OBAMACARE should increase outsourcing in Central America. Enacted in July 2010, The U.S. healthcare reform (“Obama Care” or the “Patient Protection and Affordable Care Act”) is intended to pressure large and small employers through force and taxation. The end result will show North American companies deciding to send customer support, sales, lead generation and appointment setting jobs offshore to stay competitive or risk going out of business. Many business owners will hire a dedicated bilingual employee nearshore who is 100% committed to their project. ESL call center employees in Costa Rica are just as or more effective than transitional in-house staff for half of the cost. Finally, giving small to medium sized companies the freedom to scale up their BPO staff without getting caught in the Obamacare challenge in 2014.

    http://www.obamacareoutsourcing.com/