The Medical Device Tax Quagmire

In 2010, the NADL’s analysis of the new healthcare legislation revealed that a 2.3% excise tax would be applicable to the selling price of completed dental restorations beginning in 2013.

Vague terminology in the legislation indicated that the 2.3% tax would be payable by the manufacturer, producer or importer but didn’t specifically define those terms. Given the FDA’s previous classification of dental laboratories as medical device manufacturers, the conclusion was that the tax would apply.

The news generated a growing alarm over the next several months as laboratory owners sought clarification on what the tax would mean to them. Despite the efforts of the NADL, ADA and nearly a dozen other allied dental organizations to have dental devices excluded from the tax, the IRS denied the request at a public hearing in Washington D.C. in May 2012.