Class I and II Hearing Aids Exempted After HIA-led Lobbying Effort.
The Internal Revenue Services (IRS) issued its final rule today implementing the Medical Device Tax (MDT) which goes into effect on January 1, 2013. As previously reported, the MDT was enacted in 2010 as part of the Affordable Care Act (ACA), and it imposes a 2.3% tax on gross medical device sales. Thanks to the efforts of Congressional hearing health champions and an effective lobbying campaign organized by HIA with the help of hearing consumer and professional groups, both FDA Class I and II hearing aids are specifically exempted from the tax as confirmed in the rule. The only other excluded devices are those sold at “retail” as well as eyeglasses and contact lenses. After a long period of comment and analysis, the final rule establishes the definition of “retail” as applied to the MDT. IRS has also released a Frequently Asked Questions document which also refers to the hearing aid exemption, and an Administrative Guidance Document to determine price calculations necessary to calculate the tax.
Rep. Carolyn McCarthy (D-NY), leading champion of the Hearing Aid Tax Credit, organized much of the opposition to a hearing aid tax with support from HIA and others. In addition, every Representative who attended an HIA-sponsored local AG Bell/HLAA/IHS event since 2007 in support of the tax credit championed a hearing aid tax exclusion, including Reps Shelley Berkley (D-NV); Dave Camp (R-MI); Ron Kind (D-WI); Allyson Schwartz (D-PA); Mike Thompson (D-CA); Dina Titus (D-NV); and Chris Van Hollen (D-MD). This exemption dramatically demonstrates the effectiveness of hearing health organizations working together both in Washington and across the country. The specific MDT exemption prevents the imposition of an estimated $43 million annual tax on hearing aids.
