Dentists are anxiously waiting for new IRS regulations regarding the 2.3% medical device excise tax that is set to begin on Jan. 1, 2013 as part of the Affordable Care Act.

There has been quite a bit of confusion as to what constitutes a “taxable medical device.”

The IRS has defined it as “a device approved by the Food and Drug Administration for human use,” which means the tax includes dental devices.

According to the American Dental Association, the medical device excise tax is a manufacturer’s excise tax, and the manufacturer or importer of a taxable medical device is responsible for reporting and paying the tax.

Dental laboratories are attempting to clear up the confusion by sending out letters to dentists explaining the excise tax and how it will be applied.

Dr. Daniel Collado and Dr. John Reitz told the ADA News that “Each lab has the option of including the MDT in their charge to the dentist or separately itemizing the MDT on their invoice to the dentist.”

From the ADA website –

The proposed rule appears to indicate that dental equipment, material and supply purchased by a dentist for use in the office will be subject to the tax, such as restorative materials, hand instruments, surgical instruments and endodontic filling materials, the ADA Washington Office said. It appears that completed dental prosthetics will not be taxed but the materials that are used to make dental prosthetics will be subject to the tax.

While the completed crown or denture may not be taxed, according to this interpretation of the proposed rule, the materials used to make the crown or denture such as the metal alloys, acrylic and porcelains will be taxed. But these interpretations await clarification from the Internal Revenue Service.

The tax is expected to cost the medical device industry an estimated $20 billion dollars.

Dentists, what are your thoughts on the 2.3% excise tax?

For more on this story see: Dentists Await IRS Device Tax Rules