NO DENTAL EXEMPTION FROM MEDICAL DEVICE TAX

In December 2012 the IRS issued final regulations for the new 2.3% medical device tax instigated to help pay for Obamacare.  Prior to the final decision, the ADA and numerous other dental organizations spent much of 2012 requesting some dental exemptions to the tax so that lab items, dental supplies, and dental equipment would not be included in the medical device category.  The IRS answer to these requests was “NO”. 

All dental paraphernalia listed under FDA regulations 21 CFR Part 872 will be taxed; and that includes virtually all dental instruments, supplies, and equipment.  Only toothbrushes, floss, toothpaste and other such consumer items also for sale in retail outlets will be exempt.  Finished lab items made by domestic labs will not be taxed, per se; however, raw materials used to produce dental devices will be taxed.  Therefore, expect the cost of the tax to be passed on to your practice from your dental lab.

To calculate approximately how much this tax will increase your overhead in 2013 and henceforth, multiply total annual costs for dental supplies and lab by 2.3%.  Suggestion:  include this factor when planning your annual fee increases.